Kenya Soft Drinks Country Market: Marketing Plan

Executive Summary

The Kenya’s soft drink market has been experiencing growth in the recent past. APMC is, therefore, coming into an industry that is well established and has players that have been in the industry for a long time. Although the size of the market is relatively big, entering this market needs a proper strategy that will help this firm acquire 25% market share. APMC will need to develop market proposition that will make its products uniquely popular in the market.

This is because the current competitors in this market has developed strong loyalty with the customers. This firm will be going to this market with the aim of attracting these loyal customers of other firms to its products. This would mean that thus firm must ensure that it convinces its customers that its products are of better quality and the pricing is fair. The firm will also need to develop a strong relationship with its customers through effective communication and satisfaction of their needs.

Market Analysis (Covered in assignment 1)

Kenya’s Soft Drinks Market Analysis

Business Markets and Customer Relationship Management

The underlying factors that influence the demand for the product bought by business customers

Derived demand

Demand for business customers is derived demand. It is influenced by the final consumer’s demand. APMC customers are the industries which manufacture soft drinks for the aim of serving Kenya’s market consumers. Increase or decrease of consumers demand ultimately has major impact on demand for the APMC’s products. For instance, Kenya’s soft drink market is dominated by bottled water, carbonates, concentrates, fruit/vegetable juice and sports & energy drinks, so change in demand for these products will affect the demand for APMC’s commodities.

Stimulating demand

The word of mouth promotion of the product often exerts influence on demand for product. Either positive or negative effect is expected. For example, if the APMC products for wrapping cargo were positively recommend, it would accelerate the need for Kenya’s soft drinks producers to want these products, and vice versa. Therefore, third party’s involvment in promoting company product is a stimulus for demand for the particular product.

The nature of buyer seller relationships in the country supply chain

The relationship between APMC and its suppliers of raw materials for its manufactured products is shown in the figure y below. The nature of relationship changes from business marketing to consumer marketing as represented in figure y. However, along the supply chain good relationship between APMC and its customers is very important for the business well-being.

The Supply Chain
Figure. Y the Supply Chain.

The types of customers in B2B markets

Basically there are three types of business to business markets which are commercial customers, institutional customers and governmental customers. Each of this type of market has unique dimensions. APMC could target the commercial customer’s category. In Kenya’s market, this category encompasses industries which produce soft drinks.

Example of soft drinks producers in Kenya are the Coca-Cola company, Crown foods ltd, Excel chemicals, Fresh del Monte produce inc, Glaxosmithklineplc, etc. Likewise, the logistics companies in Kenya’s market are other key customers because these are the distributors of soft drinks produced by industries. Some of these distributors are: East Kenya bottlers, Flamingo bottlers, Kawsar distributors and Coastal bottlers’ ltd.

The basic characteristics of the product and service

The APMC’s core business is to manufacture the equipments and consumable plastic “film” for the aim of selling. These commodities are used to wrap products for storage and transportation. The equipments are characterised as assets, while consumableplastic film is operating supplies. Generally, the equipments/machineries are costly than operating supplies and the customers’ buying procedures are often complicated. Normally, the use offormal advertising and negotiated contractsis common. Customer’s purchase the equipments once, i.e. one off purchase.

Consumable plastic films are bought routinely, thus classified as a transactional purchase. Bids are used to solicit products especially equipment. The decision criteria for open bids are to select the lowest quoted price or the next lowest in case the lowest bidder cannot deliver for justifiable reasons. Thus, APMC needs to devise strategy to enter these markets considering that competition in Kenya’s market is stiff evidenced by many enterprises doing business in soft drinks product line. It implies that there are other suppliers for similar or substitute products to the ones that APMC is trading.

The nature of buyer-seller relationships in the market

In business market, the relationship is often close and long lasting. In order to maintain enduring relationship, building one to one relationship with customers is of utmost importance. Because the Kenya’s soft drink market is performing well, it implies already there are other competitors with stronger ties to the business community. APMC must strive to win the competition by undertaking aggressive marketing, and, if possible, introducing incentives to its customers.

For example, through extending credit period for payments; offering attractive after-sale service especially for equipment purchases; efficient delivery schedules, etc. So as to convince industries, such as Coca-Cola Company; Crown foods ltd; Excel chemicals; Fresh del Monte produce Inc.; GlaxoSmithKline plc. Likewise, APMC must gain intimate pieces of knowledge of the customer’s operations and strive to contribute unique value to its business in order to win existing competitive markets.

The factors that influence customer profitability

In order to influence customer profitability, the following factors must be observed, these are: customers should be considered as valuable assets to business, emphasising that business should have profit focus and whenever possible join forces with others (i.e. partnering) for enhanced value. The APMC’s case can be explained by fig. x.

For maintaining profitability, customers can be grouped either passive or aggressive; the equipment and consumables purchases fall into passive category while hand stretch film and shrink wrap are referred to as aggressive. In Kenya’s market, the passive customers could be those market leaders, for example, Coca-Cola Company; Crown foods ltd, etc.

These customers are able to buy equipments and place big orders worth billion dollars. Since the machineries are costly, the buyers deserve specialised service that is expensive but will earn great profits to APMC. While the shrink and stretch film which are bought by APMC for re-sale are complementary but are essentials for functionality of the machines. They are relatively cheap and can be customised. These are in aggressive category. As APMC is embarking into new market, it should carefully study business environment and take appropriate action for market entry in the Kenya’s soft drinks market.

Customer Profitability
Figure X Customer Profitability.

The Organisational Buyer and Organisational Buying Behaviour

The nature and central characteristics of the market sector

Kenya’s soft drinks market is experiencing steady growth. This has been caused by several factors including inadequate supply of hygienic water in urban areas that has necessitated consumers to demand for bottled water.

However, high inflation rate and tough economic climate to final consumers have impact on disposable incomes (Soft drinks in Kenya 2013) and increasing health consciousness which resulted in decrease in carbonates products has decreased the growth pace of soft drinks; but in turn has increased the demand for other categories, such as bottled water and fruit/vegetable juice. According to the Decision Analyst (2011) & Soft drinks in Kenya (2013), the soft drinks market is faring well as compared to that in other developing economies (i.e. third world countries).

How the purchasing function is organised in the sector

The purchasing function for organisations is a process. It has multiple stages of critical decision making. At the initial stage is the problem recognition which needs to be solved; followed by general description of need; then product specifications; supplier search; acquisition and analysis of proposals; supplier selection; selection of order routine and performance review.

APMC’s based in Australia needs to strategically devise its procurement function in order to win the international purchasing function because Kenya’s market is in East Africa, and thus they have different time zones. However, Kenya’s soft drinks market is very attractive. APMC should consider total market in order to realise operating profit, i.e. APMC should be prepared to sell at promotional price for its machineries during the first years of supplying its commodities to the Kenya’s soft drinks market. The consumable plastic films sold at lower price will balance the position by selling in huge volumes.

The role that online purchasing assumes in the business market

The online procurements are used by large and well established organisations which have incorporated buying activities into their corporate strategy and streamlined the procurement process. Online purchasing has more operational complications as compared to offline purchasing; also it is more suitable for consumers’ markets than products markets are.

Furthermore, although it has been found that it is convenient in terms of time saving and administrative costs (Hutt & Spey 2013); it will be very difficult to effectively use online buying process in Kenya’s soft drink market because of underdeveloped infrastructures (i.e. in information communication technologies) and infrequent power supply. Therefore, APMC should opt for offline procurement which is suitable for business markets.

The decision process that organisational buyers apply in differing buying situations

The buying organisation defines different buying situations, for example, a new task, a modified rebuy and a straight rebuy. Except for a new task where the multiple stages of buying process are followed as outlined above; the rebuys’ situation often uses the existing selected suppliers. Because APMC is entering the Kenya’s soft drinks market for the first time, it has to follow a new task decision process. After successfully capturing a market share, all three options can be used depending on buying situations.

The variables that influence organisational buying decisions

Basically, organisational buying decisions are influenced by four variables classified as environmental factors, organisational factors, interpersonal/social factors and individual factors. While environmental forces dictate the demarcation of interaction, such as specifying the rate of technological changes, organisational forces determine the linkages between buying activities and the firm’s strategic priorities, and the purchasing function position within an organisation structure.

The interpersonal factors consider the roles and key influencers where individual factors deal with motivation, cognitive structures and personalities. All the four forces are equally important for efficient and effective buying decision making (Hutt & Spey 2013). Thus, APMC should strive to know Kenya’s market business buying influencers for competitive advantage.

Segmenting the Business Market and Segment demand

The bases of the segments in the product market

Product market can be categorically segmented into three major categories which are commercial enterprises, institutions and government. The commercial enterprises are suitable market for APMC’s products. Thus, the segmentation can be classified into two major groupings, macro-segmentation and micro-segmentation.

Firstly, Kenya’s commercial enterprises market can be segmented geographically which means macro-segmentation thereafter by organisation structure. For example, industries that can buy APMC’s commodities less than 5000 tonnes and over 5000 tonnes per year can be segmented into two separate groups. Secondly, undertake the micro-segmentation by considering their structure of procurement. Kenya’s soft drinks is a potential market where its customers are first time buyers, they will have different perceptions towards APMC products, which means new task organisations.

Further, for products’ market, there are three types of buyers: programmed buyers, relationship buyer and bargain hunters. Commercial enterprises in Kenya are a part of competitive market for APMC lines of business because of mushrooming of business firms in soft drinks market; categorically, they will fall under bargain hunters.

As Kenya is a developing nation and already there are other suppliers serving that market niche, APMC should be prepared to allow bargaining from its potential customers in order to convince them that APMC is a valuable company for their machineries and consumables supplies. Also, APMC has to ensure its potential customers value for their money. Other two types of buyers are to be featured later on.

The forecasted demand in each product segment

Table A. Kenya: 2006-2011 Soft Drinks Demand Growth per Million Litres.

Category 2007 2008 2009 2010 2011 2012 %Growth
Bottled Water 189.2 212.7 223.0 234.3 246.2 259.4 33.0
Carbonates 261.4 269.2 277.2 285.5 294.5 303.9 18.2
Concentrates 1.0 1.1 1.1 1.2 1.1 1.1 5.5
Fruit/Vegetable Juice 3.0 3.1 3.1 3.2 3.3 3.4 16.7
Sports & Energy Drinks 8.9 9.2 9.6 9.9 10.3 10.7 21.1
Soft Drinks 463.5 495.3 514.0 534.1 555.4 578.5 24.8

Generally, soft drinks’ markets in Kenya have registered positive growth (Table A) for the past six years (i.e. 2007 – 2012). Despite the high rate of inflation and increases in electricity & water charges (Soft drinks in Kenya 2013); yet estimates for 2013 shows that the market is still registering growth rate with fruits/vegetable juice products recorded the highest growth of 8% (Table C). This is a good sign for APMC to strategically enter the Kenya’s soft drinks market for supplying its equipment and consumables.

Table B. Kenya: 2007-2012- Soft Drinks Demand Segment Market Leaders (Percentage).

Category Market leader 2007 2008 2009 2010 2011 2012
Soft Drinks Coca-Cola Co. 47.2 44.4 42.9 42.4 41.0 40.0
Bottled Water Crown Foods Ltd 30.0 27.6 26.9 25.7 24.9 23.8
Carbonates Coca-Cola Co. 66.8 64.3 61.6 61.7 60.4 59.5
Concentrates Excel Chemicals 38.0 37.8 36.4 35.2 36.3 36.9
Fresh Del Monte Produce Inc 34.4 37.7 37.9 37.9 34.4 34.3
Sports & Energy Drinks GlaxoSmithKline Plc 28.7 28.4 27.9 28.4 27.8 28.4

Kenya’s soft drinks market has experienced immense growth in recent years. More than 16 enterprises are actively trading (Soft drinks in Kenya 2013). But there are few market leaders; for exampleCoca-Cola Company; Crown foods ltd; Excel chemicals; Fresh del Monte produce Inc. and GlaxoSmithKline plc (Table B), of which APMC has to commence trading with.

Kenya Soft Drinks Market: Forecast Demand 2013

Forecast for 2013 takes into consideration the following factors: consumers’ awareness on healthier products; low availability of hygienic drinking water; establishment of PepsiCo plant off Thika road, and continuing stability of the government after democratic election which saw Hon. UhuruKenyata elected new President of Kenya. Overall the six major categories in soft drinks market expected to register growth, with a super growth for fruit/vegetable juice of 8% followed by bottled at 5.2%. However, soft drinks category are expected to register lower growth rate of 3.1 (Table C), because of consumers’ increasing awareness on the health risks of carbonates and their link with human obesity (Soft drinks in Kenya 2013).

Table C.

Category 2012
Soft Drinks 40.0 3.1 40.7
Bottled Water 23.8 5.2 17.7
Carbonates 59.5 1.3 21.1
Concentrates 36.9 0.3 0.1
Fruit/Vegetable Juice 34.3 8.0 0.4
Sports & Energy Drinks 28.4 2.6 1.3

Marketing Plan

Strategies for Market Entry

Market entry options

There are five main options of market entry for business to business markets. These are exporting, contracting, strategic alliances, joint venture or foreign direct investment. These options differ in terms of firm’s involvement and complexity. Initially, APMC will use joint venture mode to enter Kenya’s soft drinks market.

Though export mode is the easiest mode of entry in a foreign market, it has low involvement, less complexity and low risk, but we are determined to get more involved in Kenya’s soft drink market. Thereafter, we will consider investing more through foreign direct investment by setting a manufacturing plant in Nairobi. Other modes of entry are not appropriate for us because they will delay our strategy of capturing 25 per cent market share in the first year (Hutt & Speh 2013, p. 157).

We expect that local companies or other multinationals based in Kenya will be willing to enter into joint venture with APMC for two main reasons. First, APMC’s promising performance trend in other markets with many years of experience and second, the Australia’s good economic trend.

Product Strategy

APMC is an experienced and giant company in Australia which manufactures shrink machines or ovens, stretch machines, hand held heat guns, and hand held stretch tools. It is also the market leader in selling these machines, and two types of consumables which are shrink bags and stretch film. The consumables are bought from local suppliers for resale. These products are used to wrap items for storage and transportation on pallets.

APMC has been dealing in the above product for decades which signify that our products are at mature stage in the market, thus classified under the modified re-buy (Hutt & Speh 2013, p. 14). Through leveraging experience and expertise in the machineries manufacturing field, we are able to manufacture customised products of high quality at economical cost. The products manufactured range from the cheaper, hand held heat guns costing AUD. 500, to expensive automated shrink machines or ovens, costing several hundred thousand dollars.

Our strategy is the best in the market, we will supply all four products lines in the Kenya’s soft drinks market because in so doing APMC will be able to target small, medium and large business customers. For example, hand held heat guns, and hand held stretch tools will be targeted to customers buying less than 5000 tonnes per year.

Stretch machines film targeted to customers purchasing between 5000 – 100,000 tonnes. Customers buying over 100,000 tonnes will be targeted with shrink machines film. APMC buys shrink bags and stretch film for resale. These consumables form core component of our business. We will develop special sales strategy for these two fast moving products which are bought from local suppliers at procurement prices as shown in table 1 below:

Table 1: cost per pallet.

Product Cost per roll
Quantity per roll Cost per pallet
Shrink wrap film 200.00 100 bags 2.00
Machine stretch film 100.00 3,000 metres 0.50
Hand stretch films 100.00 1,500 metres 1.00

APMC will add 20 percent mark-up for these consumables for Kenya’s soft drinks markets in order to compensate the acquisition costs.

Building a strong business-to-business (B2B) brand

Business brand is an intangible asset which adds value to company’s products. Business to business market place identity is determined through its brand and products or services offered (Hutt & Speh 2013, p. 98). Keller (1993, p. 1) defined brand equity as:

The marketing effects uniquely attributable to the brand for example, when certain outcomes result from the marketing of a product or service because of its brand name that would not occur if the same product or service did not have that name.

Our company is the leader in the manufacture of shrink & stretch film machines and equipment in Australia, therefore, we have customers’ loyalty in other markets. We will capitalise on experience gained for many decades in other markets to offer Kenya’s market quality products, customised services and customer-based products in order to add value to our customers.

Using customer-based brand equity pyramid (Hutt& Speh 2013, p.175), APMC will take advantage of its established business good name to win Kenya’s soft drink manufacturers by creating customers’ awareness through intensive marketing programme, offering products as per customers’ requirements, creating good relationship with its customers and using similar market customer’s feedback to offer unique after sale service to this new potential market (Appendix 1).

Providing competitively superior value to customers

Through introducing all product lines at once and segmenting the Kenya’s market according to small, medium and large customers, we will be able to serve better each segment through a more focused brand communication strategy. For example, we will offer 10 per cent discount for product purchased over AUD. 50,000, also any purchased commodity exceeding AUD. 100,000 at a time, we will offer 20 per cent discount. Moreover, APMC will guarantee timely supply of commodities and consumables sold to customers using fastest delivery means within five to seven days after concluding the sale agreements.

We will use the immediate available air transport for light machines to Jomo Kenyatta International Airport and the earliest cargo ship to transport heavy machines & equipment. We will also offer extended warrantees of six to eight months to all our products (except consumables) for commodities sold valued over AUD 50,000. We expect these incentives will induce our Kenya’s soft drinks customers to opt for our products (Appendix 2).

Constituents of Value in Business Markets.
Fig 1: Constituents of Value in Business Markets.

The type of product lines and product positioning

There are four types of product lines in business to business market. These are proprietary or catalog products, custom-built products, custom-designed products and industrial services (Keller 1993, p. 1). Our product line for Kenya’s market is the custom-designed products.

Because, APMC’s products occupy a higher position in the shrink & stretch film machines and equipments in other markets, leveraging its marketing experience and expertise in the industrial products, we will position our products in the middle of pricing range spectrum by applying balanced approach taking into consideration the Kenya’s stiff competitive market situation through observing the six steps process in product positioning (Appendix 3).

Steps in Product Positioning
Figure 2: Steps in Product Positioning (Hutt & Speh 2013).

We are determined to capture 25 per cent market share in the first year, and there after occupy higher position in Kenya’s market. This will be achieved through strategic product planning and undertaking thorough product positioning analysis in order to measure industrial buyers’ perceptions and preferences in Kenya’s market. In so doing we will beat our competitors in that market.

Managing Services for Business Markets

The role of services, service quality, customer satisfaction and loyalty and monitoring the customer experience

Services play an important role in business markets. In Kenya’s soft drinks market there are more than fifteen industrial customers (Euro-monitor international 2012) which imply that there is high competition. But we will launch aggressive marketing using different channels, our message will be uniform, simple and clear.

For example, our brief performance trend which insight customers that our services are reliable, timely attend to customers problems, we have vast experience in dealing with all classes of customers (i.e. small, medium and large), for us customer is not only a queen but a valuable stakeholder. APMC has incorporated the special service programme in its marketing communication strategy. For example, we will inform our potential customers that our products delivery schedule is within 5 to 7 days, and keep to our promise.

The delivery is also timely according to our promises. Furthermore, APMC will offers its customers other after sale services, for instance technical advice on installation for machine buyers, extended warrantees, and in-house training for medium and large customers. It is possible for APMC to offer these services for Kenya’s market because we have been offering it in other acquired markets for many years and it is our culture to timely respond to customer’s requests, complaints and learn from their experiences.

Our exemplary services have managed to instil customers’ royalty and created long standing relationship. At APMC, we are closely monitoring customers experience by following the eight steps of understanding the customer as illustrated in Appendix 4B in order to retain our valuable customers.

Stages of Understanding Customer’s Experience.
Figure 3: Stages of Understanding Customer’s Experience.

We view Kenya’s soft drinks market as very important market that has potentials for faster growth. We will align our personnel, facilities and employ state of the art ICT to meet our promises. Through offering the excellent customised service to our customers, we will stand a better chance of winning the 25 per cent market share and thereafter retaining our customers.

The significant factors of the service marketing strategy

APMC marketing strategy is to provide hybrid offerings. We will offer to the market three products and two consumables and more than three services as stated in 2.3.1 above. APMC believes that undertaking hybrid offerings will add value to our brand; hence we will manage to convince our potential customers to seek our products.

According to Ulaga and Reinartz (2011, p. 67), who examined critical factors which leads to success in B2B, there are five factors which if properly managed, have influence on manufacturer’s products positioning in terms of product’s differentiation and cost leadership. These factors are service-related data processing & interpretation capability, execution risk assessment & mitigation capability, design to service capability, hybrid offering sales capability, and hybrid offering deployment capability.

Through customer’s experience from other markets, offering hybrid products and services will maximise our chances of winning the market because customers will have wide range of choice. APMC being a leading company in Australia, has unique resources which it can leverage its vibrant product sales force, effective distribution network, and efficient field service organisation (Hutt & Speh 2013, p.224). APMC is determined and has capabilities to capture the Kenya’s soft drinks market, and within three years be the market leader in our product lines.

Marketing Channels and Supply Chain Management

The efficient and effective delivery of commodities to consumers is accomplished through a distribution channel. Basically there are two categories of channels which are direct and indirect channels (Hutt & Speh 2013, p. 254). While direct channels are targeted to big customers, the indirect channels make use of intermediaries in delivering products to customers, normally targeting medium and small customers.

Choice of paths to customers

APMC will use both direct and indirect channel to distribute its products to Kenya’s soft drinks market. This option is known as integrated multichannel models. Our purpose is to coordinate many channels to serve this potential market. For example, we will establish our own sales force, headed by country manager who will be stationed in Nairobi, Kenya. Sales force will target large and medium customers such as Coca-Cola Company, Crown Foods Ltd, Excel Chemicals, Fresh Del Monte Produce Inc., and GlaxoSmithKline Plc (Kenya Trade Show 2012). We will also use one distributor to handle our products for medium and small customers according to the level of procurement made by the target customer.

APMC is entering a new soft drinks market. In order to effectively acquire our target 25 percent market share we will efficiently follows the six staged designing process as per Hutt & Speh (2013, p. 264) which are: defining customer segments, identifying and prioritising customers’ channel requirements, assess the firm’s capabilities to meet customers’ requirements, benchmarking channel offerings of key competitors, creating channel solutions to customers’ latent needs and evaluating and selecting channel options.

APMC’s Supply Chain.
Fig. 4 APMC’s Supply Chain.

The role of distributors and manufacturers’ representatives in marketing channels

Industrial distributors

Distributors are important intermediaries to manufacturers. They take full service responsibilities of parent firm’s products to serve specific geographic market. APMC will employ one distributor to serve the soft drinks market in Kenya. Because the market segments are mainly located in urban areas of Nairobi and the city port Mombasa, it will be cost effective to appoint one competent distributor.

In Kenya’s market the distributors’ responsibility will be to ensure timely availability of products when needed by customers in order to avoid stock outs which cause devastating effect on customers’ faith (Ellis 2010, p. 68). APMC needs to capture and win this market, and become market leader within three to five years.

For this reason, stock-outs are highly discouraged. We will maintain buffer stock that will be held in two hired warehouses, one in Mombasa and the other in Nairobi. Moreover, the distributor will have other basic responsibilities which includes being a contact person to our customers, ensure timely availability of products, and to undertake repairs and assembly (Hutt & Speh 2013, p.259).

Manufacturers’ representatives

Manufacturers’ representatives are intermediaries under indirect channel who represent the parent firm. These are independent salespeople who sell noncompeting but complementary products. Unlike distributors, representatives don’t take title to property. They work within specified geographical area. Because representatives do not own property but work closely to the business marketer, it is a more controlling position to the manufacturer who own title and possession of the commodities.

Considering geographic location of Kenya’s market with different time zone but a potential market, we will efficiently and effectives deploy representatives to serve Kenya’s market. APMC will hire two competent and vigilant representatives, one stationed in Nairobi and the other in Mombasa in order to augment our sales force.

Pricing Strategy for Business Markets

Price is a marketing mix element that ensures business continuity and success. While the other three elements of marketing mix (product, promotion and place/distribution) are primarily concerned with cash outflow, price is the only element that causes cash inflow. APMC is sensitive to pricing issue particularly when there is stiff competition in our business lines.

Hutt and Speh (2013, p. 300) argue that price setting is a complex exercise taking into account several items involved. For example, demand for the product, acquisition or production costs, competitive forces, profit relationship, and customer’s usage trend. These factors have to be taken into consideration in setting price.

The approach used for pricing and price setting

APMC will follow the five key elements in setting the price as recommended by Hutt and Speh (2013, p. 301). This includes setting strategic pricing objectives, estimating demand and the price elasticity of demand, determining cost and their relationship to volume, and examining competitors’ prices and strategies, and setting the price level (Table 2 & Appendix 7). Our price setting policy dictates that:

  1. Consumables which are bought for resale we price at market going rates (Table 3).
  2. Our manufactured products we will use the Dow Chemical’s approach, thus mark-up of 20 percent on total cost. By setting low profit margin of 20 percent on cost while maintaining high quality product, we will manage to attract customers in this highly competitive market in line with our prime objective of achieving a 25 per cent market share in the first year. The following table summarises the key components and pricing objectives.

Table 2: APMC Key pricing components with pricing objectives.

Key components include the following Pricing objective(s) include the following:
  • Setting strategic pricing objectives
  • Maximising long run profits
  • Estimating demand and the price elasticity of demand
  • Increasing sales volume
  • Capture 25 % market share in first year
  • Determining cost and their relationship to volume
  • Improving market share in succeeding years
  • Examining competitors’ prices & strategies
  • Matching competitors’ prices
  • Gain competitive advantage
  • Setting the price level
  • 20 percent mark-up price

Table 3: Price per Pallet.

Product Cost per roll
Quantity per roll Cost per pallet
Going rate($A) per pallet- 20%
Shrink wrap film 200.00 100 bags 2.00 10.00
Machine stretch film 100.00 3,000 metres 0.50 2.50
Hand stretch films 100.00 1,500 metres 1.00 5.00
Key Steps for Pricing for Business Markets.
Figure: 5 Key Steps for Pricing for Business Markets.

Business Marketing Communications

Communicating the firm’s products to existing and potential customers is central to business marketing success. Hutt and Speh (2013, p. 324) argue that in order to sell any product, one needs make it known to the people who influences the buying decision. The biggest question will then be how to make the product known.

The above two scholars says that it is through effective marketing communication.There are several marketing communication channels available to businesses. Among the commonly used channels of communication are advertising and promotion.

The role of Advertising and promotion in APMC’s marketing strategy

APMC’s marketing communication strategy is to use integrated marketing communication because advertising and promotion will be effectively intertwined with other communication channels. Advertising by itself does not yield promising outcome. According to Thomas (2007), it is difficult to measure effectiveness of advertising campaign in relation to consumer’s behavioural change or brand choice because most adverts are not tested among consumers, too much noise in the channel limits meaningful feedback.

These factors justify our decision to use integrated marketing communications. In Kenya’s soft drinks market, we will use a combination of three channels which are: advertising using local print media such as Kenya Daily Nation, our website, sales promotion, and personal selling.

Sales promotion

We will use trade shows to promote our products and services. In Kenya trade shows which are known as International Trade Exhibition are very popular. For example, the Kenya’s trade show for 2013 will be held in Nairobi, from 14 – 16 September 2013. APMC will participate and our core products and consumables will be demonstrated. Potential customers will be contacted by our marketing people for further dealings. Trade shows aim to make our products known and promote our brand to potential consumers in Kenya’s Soft Drinks Market.

Through blending these channels, we expect to make our products known to potential customers in Kenya’s soft drinks market, thus convince them to seek our products. This will add value to our product offerings (shrink machines/ovens, stretch machines, hand held heat guns, and hand held stretch tools) in the market. Moreover, the effective use of advertising and sales promotion campaigns will add value to our brand. We have created feedback mechanism from our customers, and APMC will customise our products offerings as per buyer requirements.

Business Marketing Communications Personal Selling

The structure of the sales force and personal selling in business marketing strategy

Sales force plays instrumental role in business to business marketing. Through the sales people, relationship between the business firm and its customers is developed (Hutt & Speh 2013, p. 350). In order to optimise the direct sales function, efficient management and integration of selling function into marketing mix is inevitable. APMC’s marketing strategy is to employ vibrant sales force stationed in Nairobi Kenya, so as to offer personalised service to the medium and large customers in Kenya’s soft drinks market.

The skills and characteristics of sales people

Sales person is a ladder that links market place and specified customers, he/she is expected to have better knowledge of market environment, the firm in general and competitors’ products. Also, sales person is required to express higher level of intelligence in promoting his/her agents’ offerings.

APMC will employ twenty best people who have thorough knowledge of business to business in Kenya’s soft drinks market. This team will be under the supervision of the Country Manager, who will be based in Nairobi. However, the sales people will serve the entire Kenya’s soft drinks market.

Managing the sales force

APMC will set clear and elaborative roles for each sales person. For example, each sales person will be assigned one potential customers (refer Appendix 4A, i.e. 1 sales person * 15 customers). Each of key customers will be contacted at two calls per month at two hours per call. Our selling efforts requires 150 days a year at six productive hours each day.

We will also undertake intensive orientation programme and tailor made training to our sales people for Kenya’s soft drinks market in order to equip them with thorough knowledge of our firm, what they are expected to deliver, our product offerings, specific targets and our business culture.

Moreover, we will create incentives, for example, 10 to 15 percent commission for sales worth over $ 200,000. Furthermore, we will institute very efficient monitoring mechanism in order to identify hurdles in the sales force operations and assess their overall profitability for managerial prompt action. For instance, if a sales person fails to meet his or her sales target for three months consecutively; he or she will be terminated from our service.

E-Commerce Strategies for Business Markets

E-Commerce in APMC’s product market strategy

APMC’s website is user friendly and interactive. Because most of its markets are vastly located, Kenya’s soft drinks being one of the many markets; our website has features which enable our existing and potential customer to undertake online business transactions. This includes down-loading brochures, providing their opinions on our offerings, making payments online using credit cards or visa cards, amongst other transactions.

Managing Performance Measurement

Performance measures

APMC is determined to develop a strict monitoring and control mechanism to all its acquired markets by introducing the marketing performance measurement system. In the process, we will establish regional manager’s position to handle different geographical markets. Our Eastern Africa regional manager will oversee the effectiveness of Kenya’s soft drinks market.

He or she will be responsible for coordinating the entire distribution channel which comprises of distributors and sales people in that region. He or she will be responsible for monitoring and controlling the marketing strategy’s performance in the Kenyan market. There will also be a hired local country manager who will be stationed in Nairobi, Kenya.

His or her role will be to make a close follow up on daily marketing and sales operations, timely respond to customer’s requests and concerns, monitor the daily performance of sales people. In turn he or she will report on the progress to the regional manager in Australia on a weekly basis. The regional manager will compile the weekly reports for monthly reporting to APMC’s management team.

The Chief Executive Officer and management team will deliberate on the report and give appropriate guidance to the regional manager. APMC believe by close monitoring and evaluating our marketing strategy performance, we will win the Kenya’s Soft drinks customers, thus manage to capture 25 per cent of market share in the first year.

Conclusion & Recommendations

APMC aims at establishing itself in the new market by supplying all four products lines in order to target small, medium and large business customers.The company aims at capitalising on its past experience and offer quality products, customised services at affordable price to customers. The primary objective of the company is to create awareness among customers through intensive marketing strategies, establishing good relationship with its customers and using customer’s feedback to improve.

APMC has decided to position itself competitively in the market by offering consumable products at market price and manufactured items at a mark-up of 20 percent, while making no compromise at the quality offered to the customers. The company has decided to offer hybrid products and services which will maximise chances of winning the market because customers will have wide range of products to choose from. APMC appreciates the fact that the Kenyan market is very competitive as there are already some players in the industry.

However, given the experience and reputation of this firm, it is strongly believed that success will be achieved within the desired period. The system that will be put in place to manage the operations will help this firm expand its market share beyond the 25 percent market after the second year. In this new market, the firm will offer value and satisfaction in a way that other market competitors have not been able to in the past years. In order to enhance this success, the management of this firm should consider the following recommendations.


The Kenyan market is very competitive, but the management must ensure that it does all within its capacity to ensure that it succeeds in this new market. The following recommendations should be considered when entering this market.

  • The management should focus on targeting one segment of customers at every time. The three categories (small, medium or large) should be given focus at different times in order to ensure that a uniform strategy can be applied to all the customers in this category.
  • The management should concentrate on supplying good quality products to the market at all the times. Quality products will make customers attracted to the firm and its brand. This is one of the best ways of marketing this firm, and defininign its products proposition.
  • It is important to ensure that pricing strategy of this firm is fair. It is always not a good strategy to charge lower prices as a way of gaining a competitive advantage in the market, because consumers may consider the product to be of low value. However, the price should be fair to the customers.
  • The customer care unit should pay great deal of attention to customer feedback. The feedback should be put into consideration when formulating new policies.
  • The sales team should provide adequate product knowledge through company website and make provisions for customer query handling online
  • The firm should also provide prompt and quality after sale services to its customers
  • The firm should adopt aggressive marketing techniques to create a positive impression to the target market.


Ellis, N 2010, Business-to-business marketing: Relationships, networks and strategies, Oxford University Press, Oxford.

Soft drinks in Kenya 2013. Web.

Hutt, M & Speh, T 2013, Business Marketing Management, B2B, South- Western Learning, New York.

Keller, KL 1993, “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity”, Journal of Marketing, vol. 57, no. 1, pp. 1-22. Web.

Kenya Trade Show 2012, “International Trade Exhibition”. Web.

Thomas, J 2007, “Advertising Effectiveness”, Decision Analyst. Web.

Ulaga, W & Reinartz, W 2011, “Hybrid Offerings: How Manufacturing Firms Combine Goods and Services Successfully” Journal of Marketing, vol. 75, no. 6, pp. 5-23. Web.


Appendix 1: Features of Customer-Based Brand Equity (Hutt &Speh 2013)

Features of Customer-Based Brand Equity

Appendix 2: Constituents of Value in Business Markets (Hutt & Speh 2013)

Formulating Business Marketing Strategy

Appendix 3: Steps in Product Positioning (Hutt & Speh 2013)

Steps in Product Positioning

Appendix 4A: Kenya’s Soft drinks Potential Customers (Soft drinks in Kenya 2013)

2007 2008 2009 2010 2011 2012
Coca Cola Company 47.2 44.4 42.9 42.4 41.0 40.0
Crown Foods Ltd 12.6 12.1 12.0 11.5 11.3 10.9
Aquamist Ltd 7.4 7.4 8.1 7.9 7.8 7.6
Grange Park Ltd 1.3 1.1 1.1 1.0 0.9 0.9
Highlands Sppring Ltd 1.2 1.0 1.0 0.9 0.9 0.7
Kuguru Foods 0.7 0.6 0.6 0.6 0.6 0.6
GlaxoSmithcline Plc 0.5 0.5 0.5 0.5 0.5 0.5
Creative Deesigns Ltd 0.2 0.2 0.2 0.2 0.2 0.2
Fresh Delmonte produce Inc. 0.2 0.2 0.2 0.2 0.2 0.2
Pioneer Food Group Ltd 0.2 0.2 0.2 0.2 0.2 0.2
Red Bull gmbH 0.2 0.2 0.2 0.2 0.2 0.2
Kevian Kenya Ltd 0.1 0.1 0.1 0.1 0.1 0.1
Excel Chemicals 0.1 0.1 0.1 0.1 0.1 0.1
Premier food IIndustries 0.0 0.0 0.0 0.0 0.0 0.0
Jetlack Foods Ltd 0.0 0.0 0.0 0.0 0.0 0.0
Cares Fruit Juice (Pty)
Cirio Del Monte Group
Others 28.0 31.7 32.9 34.2 36.0 37.7
Total 100 100 100 100 100 100

Appendix 4B: Stages of Understanding Customer’s Experience (Based on Hutt & Speh 2013, p. 227.)

Stages of Understanding Customer’s Experience

Appendix 5: Categories of Distribution Channel for Business Markets (Hutt & Speh 2013)

Categories of Distribution Channel for Business Markets

Appendix 6: Key Steps for Pricing for Business Markets (Hutt & Speh 2013)

Key Steps for Pricing for Business Markets

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