WIIKANO ORCHARDS The case solution
Price
- The company was charging low prices from consumers.
- The price for wholesalers was $ 0.60 per unit because the company was offering discounts.
- The price for retailors was $2.99 per unit, which was also a low price
- Wiikano earns $0.52 per unit after subtracting the brokers’ and wholesalers' fees.
- The company’s minimum size order was low.
Promotion
- The company invest very less amount for consumer’s promotions.
- Tuwa does not have brand loyalty due to less investment in promotions.
- There was a need to redesign the website and also invest in promotions for consumer awareness.
Distribution
- Company offer discounts to wholesalers and retailers to attract their participation
- Wiikano was selling its product through wholesalers and retailers
- The distribution channel was very small and sorted.
- It has small on-site stores and it is independent on grocers.
Market Analysis
The Apple industry in the United States was based on 7500 apple producers, that produce several varieties of apple i.e. 100 varieties around 32 states in 2016. The industry generated $28.7 billion in revenue and nearly 3% annual growth. The juice producers in the United States generated a revenue of $12 billion the United States. The industry consists of several key groups i.e. farmers. The farmers used to ship their products to packaging groups for packaging and storage. The juice bottling industry was generating sales revenue of $922.45 million in the United States and the competition in the industry was also increased. Currently,the industry is facing drastic changes in the trends because consumers are now health-conscious and prefer natural and organic drinks rather than sugar-based and artificial essence drinks (Stivaros, 2020). Along with that, the marketing and distribution landscape is also changing. Industry’s sales revenues are declining due to these changing trends. Competition is also changing in accordance to production density, geography, and the number of retailers in the industry. The research concluded that the main factors that motivate the consumers to buy particular products,are: compatible price, product quality, and brand image, and consumers buy drinks for health concerns and their quality.
SWOT Analysis
SWOT analysis will allow us to evaluate the current position of Wiikano in the market. It is essential to evaluate the current position before making any strategies for business development. This analysis aims to identify areas that are performing well and what areas need proper improvements. SWOT analysis will help us to reduce the chances of failure through overcoming the weaknesses and threats and making contingency plan. Along with that, this analysis will enable us to make strategies that separate the company from its competitors.
Strengths
- Wiikano is the only company in the market that offers 100% natural apple compressed juice and other value-added products.
- Wiikano has enough potential to meet the young consumer’s needs and preferences i.e. healthy drinks. Wiikano is offering products that are sugar-free whereas, competitors used to make concentrate drinks
- Wiikano has its apple orchards as well as it sources its raw material locally, this factor influence the buying decision of the consumers. The locally produced products attract consumers.
- The high-density trees enable a company to meet the timely production of juice and help consumers to generate revenues and high return on investment.
- Tuwa comes under niche market because it is offering a specific product that meets the market needs of 100% natural products. The company supplies its product for 100 supermarkets in the country.
- In case the company accepts the proposal of rebranding, a company can acquire more customers, brand recognition, and differentiation.
- For rebranding,the company have to launch a new product that will attract customers
- The target customer would be the younger generation and also promote health-conscious consumers.
- Promotional activities would be revised for consumers.
Weaknesses
- The business is family-owned and small in size, it is unable to expand because the company does not have enough budget to expand its business activities of production and distribution.
- Competition in the industry possess challenges for the company i.e. imported products from china possess a challenge for the company.
- There was inefficient labor and production team because the company do not invest in tree training, which affected the company’s profit. In response to this, the harvest was decreased by 10%.
- Companies do not have consumer loyalty and it is because of low promotional activities.
- The packaging is outdated and labeling is also old design and it does not attract consumers anymore.
- The retail prices for the consumers are high and the company has a limited budget.
Opportunities
- Wiikano has the opportunity to compete in the market with 10% fresh apple juice.
- The market has a gap in meeting the consumers' demand i.e. consumers are demanding sugar-free products and prefer to purchase naturally produces food. Wiikano can cover this gap through available resources.
- Consumers need a product to rely on, and rebranding can help Wiikano to brand its product. Redesigning its packaging would attract consumers and develop a positive image of consumers.
- If the company accepts the proposal then the company’s sales revenue will increase and consumers would be willing to purchase the products that are made up of natural apple juice.
Threats
- The main threat for the company is the declining consumer demand for apple juice and other value-added products.
- There is a price-competitive market in the industry, the competition for fruit-flavored water drinks is also increasing.
- The packaging can confuse existing customers because they can think that the product has changed and they can switch the brand.
- There are chances that some consumers focus on the price of the product before considering the qualities of the product. Consumers might prefer to buy products that have cheap prices.
- Consumers are health conscious and environment conscious. Consumers prefer environmentally friendly products. This can cause a decline in sales because the company sells plastic bottling.
Proposal Analysis
As rebranding proposal suggested Tuwa to reposition its brand to increase revenues, brand loyalty. The proposal also suggests-increasing the prices for retailers and wholesalers i.e. from $0.52 to $0.60 and from $1.10 to $2.99 per unit respectively. The proposal also suggests-changing the brand name and packaging of the products to attract new customers. As the new packaging would allow a company to develop a new brand image. Along with that, it is also suggested to develop a relationship with consumers through social media interaction, develop brand loyalty and communicate the health benefits of using Tuwa..............................
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