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

Cyprus
 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 According to Fifield and Gilligan (2000), marketing planning
liquid food packaging industry. The company was established is a process of:
● analysing environmental, competitive and business factors
in the early 1980s and the purpose of its business is to provide
affecting business units and forecasting future trends in
marketing and after-sales services of its products to local business areas of interest to the enterprise;
liquid food manufacturers in Cyprus. As the company ● participating in setting business objectives and formulating
promotes and sells carton packaging and filling equipment corporate and business unit strategy;
for liquid food, its success depends partially on how well it ● selecting target market strategies for the product-markets
provides its services. In this context, marketing activities are in each business unit;
viewed as an important element in achieving the objectives of ● establishing marketing objectives; and
the company. ● developing, implementing and managing program
The development of this case is based on a number of positioning strategies for meeting target market needs.
assumptions, which are summarised in Table I. This process is illustrated in Figure 1.

The current issue and full text archive of this journal is available at
Situation analysis – environmental scanning
www.emeraldinsight.com/0885-8624.htm
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
Journal of Business & Industrial Marketing
21/4 (2006) 250– 261
q Emerald Group Publishing Limited [ISSN 0885-8624] A teaching note is available from Dr Vrontis Demetris at:
[DOI 10.1108/08858620610672623] vrontis.d@intercollege.ac.cy

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 Strategic marketing planning Journal of Business & Industrial Marketing
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

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
firstly analysing the environment in which the company critically important to identify opportunities and threats when
operates” (Vignali et al., 2003, p. 15). It is suggested that formulating strategy for the purpose of gaining competitive
environmental scanning of both the external and internal advantage.
environments is a necessary prerequisite stage to strategic
formulation (Vignali and Vrontis, 2004). The factors that Microenvironment political, economic, social,
should be analysed in an internal and external audit are technological (PEST) analysis
illustrated in Figure 2. Political factors include:
● new laws to promote an open-market economy that
External analysis encourages competition;
● the accession of Cyprus to the European Union in May
The external environment is made up of forces over which
2004 aligned many laws with those of the EU; and
a company has limited, if any, control and covers both the
● a possible political solution to the division of Cyprus will
macro-environment and the micro-environment. The macro-
enable free movement of people and goods and thus
environment consists of forces such as social, legal, economic,
increase trade.
political and technological (SLEPT) factors – within this are
included factors such as demographics, green issues and As regards economic factors, Cyprus is considered an
larger societal forces. The micro-environment includes industrialised economy with GDP growth (see Table II).
Table II GDP growth (millions of CYP) 1999 2000 2001 2002

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

GDP (at constant prices) 4,601 4,838 5,039 5,151 consumption of 42 litres, compared to an average of 63
Rate of growth (per cent) 5.0 5.2 4.1 2.2 litres per capita in Greece, 96 litres per capita in Portugal, and
Source: Hellenic Bank (2002) 115 litres per capita in Spain. The country’s entry into the
European Union and the changing lifestyle of Cypriots
indicate an increase in the consumption of milk drinks,
Social factors include: possibly to the level of other Western European nations.
● increasing awareness of health and fitness issues;
● a change in legislation to increase child allowances (see Dairy industry players (customer and prospects)
Table III); The Cypriot dairy industry is dominated by three large
● the birth rate has been falling steadily in the last 15 years; manufacturers of dairy products. Table V shows the products
and offered by the three companies (for reasons of confidentiality,
● increased awareness of environmental issues will support the names of the three dairies have been withheld). As can be
the carton against less environmentally friendly packages, seen in Table V, the three players operating in the dairy
such as plastic, glass and cans. industry have focused on short life products, mainly in family
packaging (one-litre size). The competition in this market
Technological factors include:
segment is quite fierce. In contrast, the portion pack segment
● information technology continues to become cheaper and
has been left with only a few product offerings (mainly
has more practical applications; and
flavoured milk).
● the internet is becoming accessible to more Cypriot
households.
Market share total revenue
Market trends and dominant market segments of the Table VI shows how the market share of the three dairies has
industry changed between 2002 and 2004. From Table VI, we can
The Cypriot consumer is turning away from less healthy assume that the market is going through significant
drinks, such as beer and carbonated soft drinks, and towards competitive change despite the oligopolistic characteristics
drinks that are perceived to be more healthy, such as milk, of the industry. Considering that competition is fierce in the
juice and water. This trend supports the increasing health and family pack market, the carton is facing strong pressure from
fitness awareness of Cypriots identified in our PEST analysis. the plastic bottle. Driving plastic bottle growth is its recent
The dominant market segments in the liquid food industry in launch (in 2001), its convenience of opening and its
Cyprus are shown in Table IV. differentiating characteristics compared to the long
established carton.
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

One child 200 fat 4 £ £ £

Two children 400 Fresh pasteurised white milk,
Three children 1,200 semi-skimmed 4 £ £ £
Four children 1,600 Fresh pasteurised white milk,
Five children 2,000 skimmed 4 £ £ £
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
Description 2001 2002 2003 Chocholate milk 60 £ £
Juice/soft drinks/nectarsa 30 31 32 Banana milk 60 £
Milk/dairy based drinksa 61 63 65
Bottled water 42 45 49
Beer 39 41 40 Table VI Market share (per cent) of the three dairies
Soft drinks (carbonated) 56 55 54
Coffee drinks 6 7 8 2002 2003 2004

Source: RAI Consulting Services (2003) Dairy 1 27 26 23

Note: a The company investigated in this case is active in these segments Dairy 2 52 45 48
only Dairy 3 20 27 27
Others 1 2 2
The company’s competitors The battle to capture market share is between three players

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

(the names of the companies have been withheld for reasons of a local office have raised barriers to entry. The threat is
of confidentiality): the company under investigation (offering considered low at present.
the products of its corporate parent) and Competitor 1, both
of which supply cartons, and Competitor 2, which supplies Industry rivalry
plastic bottles. Table VII compares the global turnover and Rivalry is considered medium because the overall market is
operating profits of the three companies over the period growing at a pace that means focus is on gaining new market
2000- 2001. The company’s corporate parent is one of the share rather than taking market share from competitors.
biggest companies competing in the juice and milk markets However, when the life cycle of white milk products reaches
in Cyprus. the maturity stage, competition will intensify. For Dairy 1, the
customer of the company investigated in this paper, industry
Porter’s five forces rivalry is fierce in the litre package size.
It is now important to identify the competitive forces for the Suppliers
company through a structural analysis of the industry. This The company under investigation gets its supplies from its
can be illustrated through Porter’s (1985) five competitive corporate parent. The local company has no influence or
forces illustrated in Figure 3. negotiating power on purchases as these are set centrally
irrespective of local conditions. Therefore, the strength of the
Threat of new entrants supplier is considered high and it is anticipated that it will
For the moment, the relatively small size of the milk market as remain so in the future.
compared to other European countries and the establishment
Substitutes
The plastic bottle is the main substitute to the carton in the
Table VII 8 The company’s competitors milk beverage market. The ability to see the product and the
2001 2000 % convenience offered has gained favour with many consumers.
However, with environmental issues gaining in importance
Corporate parent: based in Sweden/Switzerland and the difficulty in recycling plastic, this threat may
Turnover (e, millions) 7,650 7,505 þ5 deteriorate in the future.
The company investigated in this paper is the local sales office and
supplies Dairy 1 Customers
With only one customer in the dairy industry buying cartons
from the company investigated in this paper, high switching
Competitor 1: based in Norway
costs have created a lock-in situation. This will remain the
Turnover (e, millions) 528 505 þ5
same over the next four to six years, until the equipment is
Operating profit 34 214
fully depreciated.
No sales or support office in Cyprus; supplies Dairy 2
Currently, the overall market attractiveness is rated as
medium, but it is anticipated that this trend will move towards
Competitor 2: based in France medium/high in the future.
Turnover (e, millions) 933 1,025 29
No sales and support office located in Cyprus, but there is a
representative
Internal analysis
“The internal audit examines the company’s own resources
and supplies suggestions as to the company’s strengths and
Figure 3 Five forces model 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:
Figure 4 Level of customer loyalty and satisfaction

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

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
● trust from top management;
Deriving from the internal and external environmental
● trust between technical and sales departments;
scanning, the company should highly consider the
● partnership and cooperation instead of a supplier/buyer
development of the strengths, weaknesses, opportunities and
relationship; threats (SWOT) analysis. As can be seen in Vrontis (1999),
● mutual dependence and satisfaction; and this is vital if companies want to capitalise on their strengths,
● a high level of information exchange. minimise any weaknesses, exploit market opportunities as
they arise and avoid, as far as possible, any threats.
Further, it is advisable to the company to utilise the SWOT
Marketing mix
analysis to its benefit. Marketers should convert weaknesses
Given the small size of the company and the small number of
into strengths, threats into opportunities, and understand that
employees, little attention is paid to this function, which can
be considered a serious weakness. The market manager
makes all marketing decisions on an ad hoc basis. In terms of Figure 6 Portion package portfolio matrix
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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Figure 7 Product lifecycle of the four products

Figure 8 Boston Consulting Group matrix: portion packs Figure 10 SWOT analysis

Figure 9 The company’s route to market

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
strengths are only meaningful when used to capitalise upon activities in the value chain will allow, through its customer, to
opportunities. This is illustrated in Figure 10. motivate changes in the entire value chain.
On the balance of issues, the company’s strengths outweigh To avoid increasing competition from plastic bottles and
its weaknesses and can take advantage of the opportunities in other carton suppliers, the company needs to exploit the
the market whislt avoiding the threats to it. To achieve this, environmental friendliness of the carton and link this to
the company needs to gain valuable marketing experience by consumer trends in health and fitness needs of consumers.
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 on the markets in which the organisation will operate, the
an overall increase in milk consumption, its impact on the type of products/services it will offer and the basis of the
industry will not be felt for at least two to three years, when competitive stance. Marketing strategies are the means by
children start to consume fresh milk as opposed to powdered which objectives will be achieved. They reflect the company’s
milk. best opinion as to how it can most profitably apply its skills
and resources in the marketplace and they are inevitably
Business objectives broad in scope.
The Ansoff matrix (see Figure 11) helps to identify the
The business objectives set by the company are as follows:
company’s product and market growth strategy. The company
● to grow packaging material by 15 per cent in two years;
is looking to grow through “market penetration”, i.e. to
and
expand sales with existing packaging solutions for “value
● to score a 4.5 in the customer satisfaction (CS)
added” liquid foods in the dairy market, thereby taking
programme in 2004 and 4.7 in 2005, where 1 is
advantage of the increasing awarness of health and social
defector/terrorist and 5 is apostle/loyal (see Figure 4).
issues identified in the PEST analysis. Market penetration
Further information on the company’s customer satisfaction carries the lowest risk for the company, as the focus in on
programme for 2003 follows in the next section. current products in current markets, where knowledge and
experience is the highest. But which product portfolio is
Customer Satisfaction (CS) programme setting the optimal option for the company?
Customer Satisfaction is a programmme initiated by the In order to target the “value added” milk segment in
company’s corporate parent in order to determine how portion pakcages the company will need to offer a “premium
satisfied customers are with the company’s products and package” and, according to the package portfolio analysis, this
services. It is implemented in all European market companies. means promoting Product A’s package, which is the
Selected customers are chosen for the programme and company’s premium portion package. Further investment
interviews with five or six top/middle managers are should take place in Product C as well. Investment for both
undertaken by independent consultants. Each manager products (A and C) should arrive from profits made by
interview will score from 1 to 5 (with 1 being the lowest Product B, which is currently a very profitable cash cow. It
and 5 being the highest scores) in the business areas shown in follows from the BCG matrix examined above (see Figure 8)
Table VIII. that an opportunity exists to move Products A and C from the
question mark quadrant through the star in the short term
Marketing objectives and eventually to the cash cow quadrant in the medium term.
According to Porter’s three generic strategies model (see
The marketing objectives set by the company are as follows: Figure 12), the company currently pursues a “broad
● to introduce one premium portion package in 2004; differentiating” strategy, where Product B’s packages achieve
● to increase sales of portion packages by 20 per cent over superior value to the market as a whole. By promoting
two years; and
● to score at least 4.5 and 4.7 in the marketing support
Figure 11 Ansoff product/market matrix
activity on the customer satisfaction programme in 2004
and 2005, respectively.

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 service a
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

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

Figure 13 Segmentation model

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-
Product profile brand with clear links to the core brand as a way of
Below is a suggested profile for a “value added” product that differentiating Dairy 1’s product portfolio. In time, all the
could be suited to Dairy 1’s target consumers. However, this elements of the marketing mix will work together in a
needs to be validated through consumer tests. coherent pattern to create its own brand equity and identity.
(1) Product description and ingredients:
● milk and juice blend enriched with calcium and Promotion
vitamins; The development of a sub-brand will require individualised
● light but pleasant flavour; promotion to position and strengthen it. To achieve this,
● light colour; Dairy 1 will need to part with the generic advertising/
● good taste and after taste; and promotion campaigns of the past and undertake to
● not too sweet. communicate the need for the product as follows:
(2) Positioning: ● healthy start to every day;
● new drink generation (breaking new ground); ● convenience, easy to open and quick to consume;
● new sub-brand; and ● understand the health benefit; and
● modern, healthy and convenient alternative. ● trust the brand.
(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);
● during or after sport activities; and In order to achieve this, the company must concentrate on the
● mid-morning pick-up. following areas:
(5) Packaging: ● advertising – television commercials, cinema spots,
● new modern shape; newspapers/recipies and health guides, teenager/adult
● easy opening and straw for convenience; and magazines, bill boards, leaflets;
● environmentally friendly. ● sales promotion – key supermarket sampling, point of
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
that the new products offered are even healthier than plain Advertising and product sampling are considered to be very
white milk. effective in going through the AIDA stages.
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
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:
Place ● consistent marketing mix;
Dairy 1 covers the following points of sale: ● good co-operation and communications between key
● 100 per cent of large supermarkets; stakeholders;
● 90 per cent of small/medium supermarkets; ● buy-in of key stakeholders; and
● 70 per cent of small village shops; ● project sponsor commitment.
● 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

Table X Budget plan
Activity Responsibility Year 1 Year 2 Total
Company research pre-launch Marketing manager a
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,

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
need to be decided. Some of these reasons, together with more market/consumer orientation process than before and
possible corrective actions, are shown in Table XI. hereafter will contribute to bridging the gap between strategic
change and industrial complexity and instability.

Conclusion Application questions

This paper has focused on conducting a strategic review of the ● Assess and evaluate the company’s strategic direction.
marketing function for a Cypriot company operating in the What are your strategic recommendations in order for the
liquid food packaging industry and has shown that the company to achieve its objectives and be more successful
and profitable in the future?
company can improve significantly on its current 23 per cent
● Prepare a proposal illustrating how the company should
market share by concentrating on its marketing function.
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
 Strategic marketing planning Journal of Business & Industrial Marketing
Demetris Vrontis et al. Volume 21 · Number 4 · 2006 · 250 – 261

market opportunities. Your response should be given on a University (MMU), a PGCE (HE) from MMU, a VTC from
tactical level (marketing mix elements). Henley Management College, an MBA (Distinction) from
● Design a detailed promotional approach for the company. the University of Hull and a PhD in International Marketing
● A clear strong brand positioning creates strong customer from MMU. From 1997 to 2003 he worked at the
loyalty and a clear differentiated position in the market Manchester Metropolitan University Business School
segment. What issues should the company consider when (MMUBS) in the UK, where he led and directed two of the
developing a positioning strategy for the brand whilst University’s postgraduate programmes. Currently, Demetris is
trying to grow in the market? the Head of Marketing Department at Intercollege
● The company faces many challenges in the market University in Cyprus and Director of the Institute for Retail
environment. Identify and discuss the marketing Studies. Demetris is a founder member of CIRCLE – the
concepts, tools and issues it will need to use to address
Centre for International Research for Consumers and
the end user segment and develop itself in the market
Location and their Environments (a strategic alliance made
place.
by seven Universities from different countries). The aim of
the alliance is for its members to collaborate and cooperate
References
in publications and research grants, undertake research and
Ansoff, I. (1957), “Strategies for diversification”, Harvard provide consultation to a number of national and
Business Review, September/October, p. 114. international companies in both consumer and trade
Fifield, P. and Gilligan, C. (2000), Strategic Marketing markets. Other activities include being an external examiner
Management, Planning & Control and Analysis & Decision, and moderator for Nottingham Trent University (in its
The Chartered Institute of Marketing, Butterworth- cooperation with a number of Greek Business Schools in
Heinemann, OXford. Athens, Thessalonica and Heraklion) and a visiting professor
Hellenic Bank (2002), Cyprus in Figures, Hellenic Bank, at a number of universities around the world. Currently he
Nicosia.
is an associated faculty for Henley Management College, a
Heskett, J.L., Jones, T.O., Loveman, G.W., Sasser, W.E. Jr
Visiting Professor for Vorarlberg University in Austria
and Schlesinger, L.A. (1994), “Putting the service profit
(Master’s level) and a Visiting Fellow at Leeds Metropolitan
chain to work”, Harvard Business Review, March/April.
McDonald, M., Rogers, B. and Woodburn, D. (2000), Key University in the UK. Demetris teaches marketing and
Customers – How to Manage Them Profitably, Butterworth- international marketing at both undergraduate and
Heinemann, OXford. postgraduate level and supervises undergraduate and
Porter, M. (1985), Competitive Advantage: Creating and postgraduate research students, both in Cyprus and abroad.
Sustaining Superior Performance, The Free Press, New His prime research interest is on international marketing
York, NY. planning and marketing strategy, areas that he has published
RAI Consulting Services (2003), Services Retail Audit Report, widely on in refereed journal articles and presented papers to
RAI Consulting Services, Richardson, TX. conferences around the world. He is also the author of seven
Vignali, C. and Vrontis, D. (2004), Global Marketing and books in international/global marketing and strategic
Export Management, FoXwell and Davies, London. marketing planning and the editor of the EuroMed Journal of
Vignali, C., Vrontis, D. and Vranecevic, T. (2003), Marketing Business (EMJB).
Planning. Analysis, Strategy and Tactics, FoXwell and Davies, Harry Kogetsidis was a Lecturer in Business Systems at the
London. University of Luton in the UK between 1994 and 2002. In
Vrontis, D. (1999), “Bass plc – an assessment, evaluation and 2002 he joined Intercollege University in Cyprus, where he is
recommendations of their strategic approach in entering an Assistant Professor at the Department of Management and
foreign beer markets”, International Marketing Review, MIS. His prime teaching and research interests are in
Vol. 16 Nos 4/5, pp. 391-405. management and business forecasting. Harry has written and
Vrontis, D. (2003), “McDonald’s – the impact of the external delivered forecasting courses at both undergraduate and
environment on its international marketing operations – postgraduate level, trained UK managers in forecasting
standardisation, adaptation or adaptstandation?”, methods and taught in a number of MBA programmes in
International Journal of Management Cases, Vol. 6 No. 2,
Europe. His interests also include developing distance
pp. 30-40.
learning material on forecasting. He has published a
Vrontis, D. and Vignali, C. (1999), “An entry strategy report
for Dairy Crest in Germany: a theoretical application of number of papers on management and management science
matrix marketing”, British Food Journal, pp. 393-408. 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
About the authors
Operational Research Society.
Demetris Vrontis studied in the UK and obtained a BSc Andrew Stavrou is an MBA Student at Henley
(Hons) degree in Business from the Manchester Metropolitan Management College, Henley-on-Thames, UK.

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