Product Lifecycle, SWOT and Tactics

Choose a product of your choice and do a product life cycle with the right explanation.

Product
Mineral water

Brand
AQUA

AQUA was established since 1973 by PT AQUA Golden Mississippi. At the first it distributed to the market, the sales of AQUA was steadily rose and the brand was steadily known by local people. Then in 1998, after DANONE group merged with AQUA, it caused AQUA brand became more booming in Indonesia. The growth then doubled and became “Star” in Indonesia market. Today, AQUA has already reached 45% of market share and becomes market leader.

Though it has many competitors now, such as ADES (main competitor), AQUA still becomes number one mineral water in Indonesia. We can say that, it is already at Cash Cow position in BCG or maturity position in PLC, where it has many loyal consumers and the positioning in the market is also strong.

Milestone
1973
PT AQUA Golden Mississippi was established as a pioneer in the bottled mineral water industry in Indonesia. The first factory was built in Bekasi.

1974
AQUA’s first product was launched in the form of 950 ml glass bottles from its Bekasi factory at a price of Rp.75 per bottle.

1984
AQUA’s second factory was established in Pandaan, East Java, as an effort to get closer to its customers in that area.

1985
AQUA developed 220 ml PET packaging for its bottled water, making AQUA products better quality and safer for consumption.

1993
Introduced the AQUA Peduli (AQUA Cares) program as a step toward recycling plastic AQUA bottles for reutilization.

1995
AQUA became the first mineral water producer to apply the in-line production system at its Mekarsari factory. This process allowed the simultaneous production of AQUA water processing and packaging. This system results in the direct filling of newly produced bottles, so that the production process is more hygienic.

1998
The merging of the AQUA and DANONE groups on September 4, 1998, constituted an important step toward improving the quality of AQUA products and has placed AQUA in the position of the largest bottled mineral water producer in Indonesia.

2000
Right at the change of the millennium, AQUA launched its AQUA-DANONE product label.

2001
On March 21, DANONE raised the number of its shares in PT. Tirta Investama from 40% to 74%, and became the majority shareholder of AQUA group. On November 1, AQUA launched a new design for the 380 ml glass bottle.

2002
AQUA was awarded “The Indonesian Best Brand Award”. 0n June 1, AQUA started implementing The “Kesepakatan Kerja Bersama” (KKB 2002-2004) program.

2003
AQUA increased its production capacity by establishing a new factory in Klaten. AQUA also started implementing the System Application System and Products (SAP) for data processing and the Human Resources Information System (HRIS), which allow for better integration of the company’s work process.

2004
AQUA launched a new logo. AQUA also launched its new product, AQUA Splash of Fruit with the essences of strawberry and orange-mango flavors in it. The launching of AQUA Splash of Fruit helped strengthen AQUA’s position in the beverage category.

2005
Danone AQUA lent a hand to tsunami victims in Aceh. AQUA initiated the first production of MIZONE, a nutritional drink from DANONE, which comes in orange, lime and passion fruit flavors, on September 27.

Do a SWOT analysis for the chosen product

1. Strength
· Strong positioning in the market (Aqua has strong brand power)
· Aqua is a market leader in this business (it dominates more than 45% market share)
· To sell Aqua product is not difficult, because it is a daily consumption product and customers know about its quality.
· Aqua is available in various size and packaging but still with competitive prices (which means people from all segments can buy Aqua)

2. Weakness
· Aqua is only a pure water (there is no variant favors)

3. Opportunities
· Large market of distribution
· Majority of the public know AQUA
· Many events that can be sponsored by AQUA as the media promotions

4. Threat
· Lack of clean water resources
· Tight competition
· Aqua is sabotaged (reproduced or distributed by unauthorized people)
· Refill water depots in local area that offer cheaper price
· Economy Crisis
· Natural Disasters

Choose one strategy that you would do for the next one year on your chosen product

Strategy
Become the most qualified mineral water in Indonesia, which means qualified in cleanness, composition, and safety.

With Marketing Mix of your choice, what are the tactics to achieve the strategy

1. Physical evidence
· Create a new seal which is safer and difficult to be harmed.
· Adding hologram on the packaging and seal to show the genuine product.

2. Price
· Prices should be competitive
· For supplier or partner we cooperate with, we will give special price in charge they only sell AQUA

3. Process
· Tighten the security in production, packaging, and distributions to avoid the product imitations (sabotage).
· Allow factory visit by public who wants to see the process of AQUA production. It can proof to the public that AQUA is safe to be consumed and can be trusted.

4. Promotion
· Promote the new packaging of AQUA by any promotion tools.
· Sponsor sports events
· Hold special program, like our current program which is “AQUA untuk anak Indonesia” where for every 1 liter of AQUA from the specially labeled 600 ml and 1500 ml products sold, AQUA will help to provide 10 liters of clean water that can be used for cooking, bathing etc. Additionally this program will also be complemented with hygiene promotion and capacity building activities aimed at empowering communities.

5. People
· Hired qualified and responsible people as the employees
· Use expert endorsement to educate public about the advantages of consuming AQUA
· Provide hotline customers services
· Improve the quality of management through training and seminar

6. Place
· Must be available at every kind of location, such as school, hospital, café, gym, etc
· Especially for particular program (like “AQUA untuk anak Indonesia”), it should reached villages, like NTT and Irian Jaya which have problem in water supply.

7. Product
· Change the main function of product. We can produce AQUA for different needs with different quality, such as for consumption and beauty care we provide high quality, for washing rice, vegetable or fruit we provide standard quality, and for washing clothes and dish we provide clean quality.

Competitive Advantages

Marketing; Lecturer: Mr. Silih A Wasesa


Competitive Advantage

advantage from a lower cost structure: an advantage enjoyed by a company with lower costs than a rival, enabling it to sell for less or make greater profits at the same price as its rival.

Keuntungan yang di nikmati oleh sebuah perusahaan yang dimana perusahaan mengeluarkan cost yang lebih rendah daripada rivalnya, yang dapat membuat rival kalah dalam penjualan (market share) atau membuat keuntungan lebih dengan harga yang sama dengan rival.

Encarta

A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). Thus, a competitive advantage enables the firm to create superior value for its customers and superior profits for itself.

Cost and differentiation advantages are known as positional advantages since they describe the firm's position in the industry as a leader in either cost or differentiation.

A resource-based view emphasizes that a firm utilizes its resources and capabilities to create a competitive advantage that ultimately results in superior value creation. The following diagram combines the resource-based and positioning views to illustrate the concept of competitive advantage:

A Model of Competitive Advantage

Resources and Capabilities

According to the resource-based view, in order to develop a competitive advantage the firm must have resources and capabilities that are superior to those of its competitors. Without this superiority, the competitors simply could replicate what the firm was doing and any advantage quickly would disappear.

Resources are the firm-specific assets useful for creating a cost or differentiation advantage and that few competitors can acquire easily. The following are some examples of such resources:

* Patents and trademarks
* Proprietary know-how
* Installed customer base
* Reputation of the firm
* Brand equity

Capabilities refer to the firm's ability to utilize its resources effectively. An example of a capability is the ability to bring a product to market faster than competitors. Such capabilities are embedded in the routines of the organization and are not easily documented as procedures and thus are difficult for competitors to replicate.

The firm's resources and capabilities together form its distinctive competencies. These competencies enable innovation, efficiency, quality, and customer responsiveness, all of which can be leveraged to create a cost advantage or a differentiation advantage.


Cost Advantage and Differentiation Advantage

Competitive advantage is created by using resources and capabilities to achieve either a lower cost structure or a differentiated product. A firm positions itself in its industry through its choice of low cost or differentiation. This decision is a central component of the firm's competitive strategy.

Another important decision is how broad or narrow a market segment to target. Porter formed a matrix using cost advantage, differentiation advantage, and a broad or narrow focus to identify a set of generic strategies that the firm can pursue to create and sustain a competitive advantage.

Value Creation

The firm creates value by performing a series of activities that Porter identified as the value chain. In addition to the firm's own value-creating activities, the firm operates in a value system of vertical activities including those of upstream suppliers and downstream channel members.

To achieve a competitive advantage, the firm must perform one or more value creating activities in a way that creates more overall value than do competitors. Superior value is created through lower costs or superior benefits to the consumer (differentiation).

Sources: QuickMBA.com ; Encarta ; Indoskripsi.com

The example


Kecap ABC vs Kecap BANGO

Selama ini pasar kecap banyak didominasi oleh pemain pemain lokal maupun nasional, seperti kecap cap Bango dari Unilever, kecap ABC produksi Heinz ABC, dan kecap Indofood, dan baru-baru ini Wingsfood juga meluncurkan kecap yang bermerk Sedaap, yang merupakan strategi pemasaran dengan metode awareness pada produk sebelumnya yang pernah meng-gebrak market Indonesia (Mie Sedaap).

Sebagai contoh untuk competitive advantage, Kecap Manis cap Bango dengan rivalnya Kecap manis ABC. Kecap manis ABC lebih dulu in di Indonesia dibandingkan Kecap Bango yang masuk pada tahun 2001. Ketika Bango masuk ke Indonesia, ternyata yang terjadi adalah Konsumen menyambut produk tersebut dengan hangat, dan market share dari Kecap Bango mulai bertambah, bahkan hingga 2 kali lipat. Berdasarkan Indeks Loyalitas Konsumen Indonesia (Kategori Kecap) tahun 2005 dan 2006, ternyata Kecap Bango sudah menduduki peringkat loyalitas konsumen di atas ABC Heinz.

Ditinjau dari segi produk, kecap Bango lebih memposisikan sebagai kecap yang berkualitas tinggi dengan pengolahan yang khusus. Dimana bahan-bahan yang digunakan juga menggunakan bahan alami dan terpilih (pure and selected). Dari segi rasa kecap manis itu sendiri, Kecap Bango menggunakan yellow soy bean, yang menciptakan cita rasa kecap manis yang pas bagi orang Indonesia.

Maka secara garis besar dapat disimpulkan Kecap Bango dapat memberikan benefit yang lebih kepada konsumen dari pada ABC-Heinz. Baik dari kualitas dan positioning making, Bango secara langsung memberikan pengaruh terhadap decision making dalam memilih kecap.