Marketing Strategy of Bionade

I Marketing Strategy Plan 1 Company and Product 1. 1 Company overview The “BIONADE GmbH” is a small German manufacturer and distributor of the organic lemonade brand “Bionade”. The family-owned-enterprise has 107 employees and is located in Ostheim, a small town in the northern Bavaria region of Germany. Sigrid Peter-Leipold is the industrial business manager, owner and executive manager of the “Privat Brauerei Peter KG Associate Partner” and the “BIONADE GmbH” and “BIONADE International GmbH”. 1 As an offshoot of the private beer brewery (Rhoehnpils), the “BIONADE GmbH” was incorporated in 1995.

The brewery master in this time Dieter Leipold invented the beverage, especially the technical producing process. It is made by a complete organic process according to a century old brewing tradition. It is the first fermented non-alcoholic drink without any extras of sugar or antidegradantes. The company started in 1995 with around 100. 000 bottles per year. In 2000 a big beverage distributor of the gastronomy sector in Hamburg discovered the product. Since then sales increased continuously up to 25 million bottles in 2005.

2006 it would be twice as much.

Today the company is market leader of the German organic beverage market (Anon, 2006a; Lange & Lange, 2006; Bionade, 2006). 1. 2 Mission Statement The Mission of BIONADE GmbH is to offer a high quality product produced by a completely organic process according the old family brewing tradition. The identity and the origin of the product are guaranteed. Additional the company aims to provide a higher standard of living in the area by support the local organic farming and give new job opportunities to the people.

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2 1 In the following report the company is named as Bionade. This includes the international and the national firm.

The private beer brewery Peter KG will not be examined. 2 The company do not present an official mission statement. The mission is formulated by the author, out of the given official information (Bionade, 2006). 2 1. 3 Product and market The company sells only one product – Bionade. Bionade is convenience product, an organic refreshment drink. Because of the high level on minerals (calcium and magnesium) as well as the low calories (20 cal/ 100ml) it is additionally an adequate diet and sport drink. It is main sold as a non alcoholic alternative to beer in 0,33 litre glass bottles.

Additionally it is available in 0,5 PET bottles. Among to the classical herb product, it is offered in four other tastes: Elderberry, Lyche, Lyche-Forte and Ginger-Orange. Located in the market for soft drinks1, it is a functional as well as a non coke carbonate beverage. Additionally it is part of the organic food market (Bionade, 2006). The marketing strategy plan follows from the approach of Dibb et al. (1994) and Kotler & Keller (2006). It is based on the marketing audit, which is shown in the appendix. 1. 3 Corporate objectives The corporate objectives of the company are: ??

Increase sales up to 99 million litres in 2010 by an entrance in the international market over all distribution channels ?? Start running the new factory in the springtime of 2007 with a capacity of 120 million bottles per year ?? Further support of the local organic farming 2 Executive Summary This report shows the marketing strategy plan for the next 5 years for the beverage company Bionade GmbH. It is based on an external and internal marketing audit of this organisation (appendix). The product performed well. Sales rates increased about 350% over the last years. They did not do any big marketing campaigns.

To achieve the planned sales forecast over the 1 The soft drink market is differentiated into carbonates (coke and non coke carbonates), fruit juice, bottled water, functional drinks, RTD tea, RTD coffee and Asian speciality drinks (Euromonitor International category definition, 2005). 3 next year and to protect the current market leader ship in the segment of healthy functional drinks, a marketing mix will be established. The following marketing strategy objectives are defined: ?? Keep hold of the marketing leader position in the organic beverage sector, by starting marketing campaigns in the middle of 2007. ??

Increase sales twice in the next year up to 33 million litres in 2007. ?? Increase market share of the domestic soft drink market up to 0. 14% in 2007. ?? Increase marketing budget up to 8 % of turnover from 2007. ?? International market entrance start in 2007 ?? Further research on new products The current external environmental forces are mainly support the organisation’s business. Changed consumer patterns regarding a higher consumption of healthy food, as well as the faster lifestyle and the bad image of global companies in the group of younger adults are the main reasons for the increased sales of Bionade.

The brand is characterised as unique, innovative, healthy, value added, credible, social and “green”. The marketing strategy is based on a mass market penetration strategy in the domestic market and a new market entry strategy in the international markets. The main objective is to keep the current competitor advantages of the unique product in hole. Increase brand awareness and sales by the development of the product line. The product line will be extended by new package sizes and materials. A 0,33 l and a 0,5 l PET bottles are planned to make the product more practicable for sportive and “on the street” users.

To increase brand awareness classical advertising (print and radio), free sampling in universities, schools, company events, as well as sponsorship of local sport events will be used. A database will be established to increase customer relationship by direct mailing. In future the current distribution strategy in cooperation with the distribution company of Coca Cola Company will be used to get into all traditional retail channels in the domestic and the international markets. In a long time view own sales offices will be open in the main markets to organise distribution, marketing and communication in these countries. 4

The price in the domestic market will increase up to a compared price level of classical soft drinks. Bioande has the chance to be a “mass” product by a high level of quality. But the differentiation is not done by the price. The transfer in the international markets will be follow a clear and credibility branding strategy. 3 External Business environment In this part the situation regarding the macro environment, the market and the competition is presented (Dibb et all. , 1994). It is based on the results of the marketing environment audit (appendix 3. 1). 3. 1 Macro environment The political and legal situation (appendix, chapter 2. . 1. 1) in the domestic market is determined by the new recycling regulations of the German government. Packaging gets an important role for this industry. The new regulations do not have such a big influence for Bionade, because the main sale is doing by glass bottles. They are reusable packaging since a long time. Manufacturers, Distributors and Customers are used to it. Additionally the “green” positioning and image of Bioande supports a system that protects the environment. The European Union agricultural department focus more and more on a further support of organic farming, which is positive for Bionade.

The international political and legal situation depends on the country. The patent on process, technology and brand is valid in all international markets except of the US and China. China has not such a law. Therefore a market entrance in this country would bring further more risks in kind of copying. The political uncertainty in the developing countries (eastern countries) has to keep in mind by an international expansion. The current economic situation (appendix chapter 2. 1. 1. 2) in the domestic market is characterised by a small growth and economic uncertainty, a high unemployment rate and regressive consumer spending.

The developed countries are determined by saturation and maturity. Additionally declined birth rates and an aging population influence the target audiences of the companies. Consumer patterns are determined by a current “Fast-Paced- Lifestyle” by smaller households. The current health and wellness trend is a further positive 5 opportunity for Bionade. People attach more importance on food and their ingredients (appendix, chapter 2. 1. 1. 3). The technological situation (appendix chapter 2. 1. 1. 4) in the producing process is leaded by Bionade. Distribution channels are influenced by a higher using rate of the internet.

Convenience products like Bionade are not the main E-commerce products, therefore ecommerce as a new retail channel is not focussed yet. 3. 2 Markets The soft drink market grows over the last years in all segments. The forecast for 2007 is a trade off volume of 79. 339, 98 million litres in Western Europe. Germany is the main market for soft drinks in Western Europe. 22. 61 % of soft drink volume is done in Germany in 2005. Out of a world wide view North America and Western Europe are the most important markets. The Asian regions are the future markets because of the high potential in economic developing.

In the developed countries functional and wellness drinks are the growing products. The current wellness and health trend is supported by many food scandals over the last two years. Today not only traditional organic food customers choose a healthy drink. The market is changing. Younger people are paying more attention on organic food. Some of them are interested in the health aspect for others it is the value of money and time they associate with a drink like Bionade. The main distribution channels in the soft drink market are supermarkets/ hypermarkets.

The sales with organic food products in the German supermarkets increased 2005 up to 10%. There is a trend on concentration in the wholesale and retail level at time. Metro in Germany, Carrefour in France and Tesco in the UK are the main players on retail level. High listing prices as well as smaller portfolios make it difficult for organisations without big financial resources to be presented in their shops (appendix chapter 2. 1. 2. 2). Bionade could get over these rules in Germany, because of the high demand of the product, but this must not apply accordingly for all countries. . 3 Competition In the special market of Bionade there are no direct competitors. The main indirect competitors are the big soft drink companies like Coca Cola Company, Pepsi, Nestle and Danone. They 6 do not have a similar product. There power on the distribution level, their broad brand and product portfolio, their international presence and their financial resources are the main competitive advantages. But the last year Coca Cola Co. lost market share in Western Europe. More and more smaller brands enter in the market. Discounter brands are growing.

Additionally there are three smaller brands: “Sinalco” a German traditional lemonade brand, “Almdudler”, an Austrian herb lemonade and “Carpe diem” a functional wellness drink distributed by Red Bull. “Almdudler” is a local Austrian brand. It is not used in Germany. Sinalco is no organic drink. Carpe diem is not well promoted in the German market. The turnover would be less than the Bionade ones1. The positioning as a refreshment drink with value added healthy ingredients is similar to Bionade (Carpe diem, 2006). In the organic market segment in Germany the Voekle GmbH came out with “Voekles Bio lemonade”.

It is also sold in a glass bottle, but by a higher price. The main risks for Bionade are new market entrees (appendix chapter 2. 1. 2. 3). 4 SWOT Analysis The following picture shows the main strengths, weaknesses, opportunities and threats in an overview as a result of the marketing audit (appendix, main chapters 2. 1 and 2. 2): 1 There are no financial data of this company for the German market available. It is based on the experiences of the author. 7 Figure 1: SWOT Analysis Bionade Source: According to Kotler & Keller (2006), p. 55. 5 Marketing objectives

Out of the marketing audit and the SWOT analysis the following marketing objectives could be defined. This includes the strategic thrust and the strategic objectives (Dibb et al. , 1994). 5. 1 Strategic thrust The “Ansoff? s Product-Market Expansion Grid” (1956) is used to underline the strategy thrust of the company. 8 Figure 2: Strategic thrust options Source: Ansoff, I. (1956), “Strategies for Diversification”. Bionade embarks on a market penetration strategy to get a higher market share in the current market. Additionally an expansion strategy is planned by a country diversification.

There is already research on a product development. They want to come out with it by 2010. The company focuses on taping the full potential of the current market. At time Bionade is more seen as a niche product, but it targets to a broad range of customers. Therefore the strategy will follow a mass market strategy (Ayal & Zif, 1979; Kotler & Keller, 2006). 5. 2 Strategic marketing objectives Out of the corporate objectives the following marketing objectives are defined1: ?? Keep hold of the marketing leader position in the organic beverage sector, by starting marketing campaigns in the middle of 2007. ? Increase the marketing budget up to 8 % of turnover ?? Increase sales up to 99 million litres in 2010. ?? Increase market share over the next five years up to 0. 36 % in the German soft drink market and 0. 11 % in Western Europe. 1 They are defined by the author. The company do not publics any financial or marketing related objectives and planning data. 9 Figure 3: Planning data of Bionade GmbH and Bionade International until 20101 2005 2006 2007 2008 2009 2010 Market share Bionade West. Europe 0,01% 0,02% 0,04% 0,08% 0,10% 0,11% Volumen West. Europe Soft drink market (mil. l. ) 75. 703,42 77. 77,46 79. 339,98 81. 223,31 83. 041,22 84. 906,57 Market share Bionade Germany 0,04% 0,09% 0,14% 0,28% 0,31% 0,36% Volumen Germany Soft drink market (mil. l. ) 17. 123,08 17. 343,86 17. 564,18 17. 862,59 18. 092,14 18. 333,52 Volume Bionade total (mil. l. ) 8,25 16,50 33,00 66,00 82,50 99,00 Volume Bionade Rest of the World (mil. l. ) 0,00 0,00 0,00 1,65 3,30 5,94 Volume Bionade West. Europe (NO GER) (mil. l. ) 0,83 0,99 8,25 14,85 23,10 27,06 Volume Bionade Germany (mil. l. ) 7,43 15,51 24,75 49,50 56,10 66,00 Volume Bionade total in million bottles 25 50 100 200 250 300 Bionade Planning Data 2005-2010

Source: Bioande press overview (2006) and Euromonitor International (2005) ?? Diversification in international market from 20072. o Western Europe (UK, France, Italy, Spain by 2007) o Eastern Europe (Poland, Ukraine in 2008 as test markets) o Asian pacific (Australia and New Zealand, in 2008; Japan, China and India after 2010, depends on the capacity) o North and South America, Africa are planned after 2010 ?? Develop of a new product until 2010. 1 The cursive numbers are valued by the author. There are no official planning sales, profit and cost data available, except of an official press review, presented in the internet. This marketing plan does not examine the market entrance outside of Europe in detail. The current production situation do not allows a world wide sale of Bionade. 10 The main strategy is to increase brand awareness. Therefore the company starts an integrated marketing campaign, which allows a higher budget then the years before. The next chapters present the planned strategy and marketing mix in detail. Therefore the following marketing budget is defined: Figure 4: Marketing Budget planning 2005 2006 2007 2008 2009 2010 Turnover (price: 0,40 €) 10. 000. 000 20. 000. 000 40. 000. 000 80. 000. 000 100. 000. 000 120. 000. 000 Marketing Budget 8% of turnover from 2007) 7. 000 9. 000 32. 000 64. 000 80. 000 96. 000 Germany (70%) 6. 000 8. 000 22. 400 44. 800 56. 000 67. 200 International Markets (30%) 1. 000 1. 000 9. 600 19. 200 24. 000 28. 800 Source: Defined by the author The marketing strategy and mix is determined by the small budget. The planning data define the budget and the spreading out of the current situation. It is important that the organisation measure effectiveness and efficiency, especially after the first year. It could be necessary that the amount of the budget as well as the planned percentage for the international markets has to be redefined.

Additionally a specific budget for every country will be fixed. 6 Core strategy 6. 1 Target Markets Bionade is a product for a broad range of customers. For the national market and the main European markets people all ages, categorised by the following groups are defined as the target audience: ?? Traditional organic food users with a conservative lifestyle. Mostly women older ages (40-60 years), well educated, higher income and active interest in healthy food. They mainly use organic and health food stores to buy their products. ?? Younger adults with a trendy and hip lifestyle, mostly 18-35 years old.

They are characterised by “on the street consumption”, time pressure and fast lifestyle and an 11 increased interest in healthy food. Consumption reasons could be additionally dietary need, allergies or other diseases. They mainly use supermarkets, beverage retailer, convenience stores and beverage vending machines for buying. Also company canteens and university caterers are distribution channels to get through to them. The whole gastronomy sector especially clubs and bars in the main cities are other points of consumption. ?? Sportive people all ages with a higher need on minerals and vitamins.

The consumption time and place are mainly during doing exercises, after it or during the breaks. This could be outside (Skiing, hiking, etc. ) or inside (fitness, soccer, basketball,etc. ). Fitness stores as well as the gastronomy sector in skiing and hiking areas are the main places of consumption. ?? Children and Teenagers (6-18), especially with weight problems. They are using lemonade because of the sweet taste. Especially for the younger children their parents have an important part in the purchase process. School caterers are a special retail channel to get through to this group.

Additionally convenience stores, supermarkets and beverage retailer are used by them or their parents. To get into the international markets a contract with an independent local beverage wholesaler is planned. It is the same strategy the organisation did for the current international markets (Netherlands, Austria, etc. ). It is important because they know the market specifics, the drinking consumption and cultural differences as well as the retail sector. If the product performed well and the sales volume increase over 5 million litre per year per country an own sales office in this country is planned.

It will be responsible especially for the marketing, the distribution and the communication to be closer to the market. For a market entrance in the Asian Pacific and the eastern countries as well as later in the American and African continents an own sales office is necessary to be closer to the market. First the Coca Cola distribution cooperation will be used to get into the markets. 6. 2 Competitor advantages and objectives Porter (1990) defined five generic competitive strategies, the following figure shows in an overview: 12 Figure 5: Generic competitive strategies Source: Porter (1990), “The Competitive Advantage of Nations”, p. 9. Bionade is the only fermented lemonade on the market. The technology is not copied over the last 10 years. The high credibility and the clear positioning of the brand by a small portfolio and a high quality product are the main competitor advantages. The company focused on differentiation by a broad target audience. The main aim is to increase market share and brand awareness protecting their current market leadership in the organic beverage segment. Get into the whole soft drink market, out of the market niche strategy into a mass market strategy is the long time goal.

The company will use the credibility and the uniqueness of the brand with the high quality of the product to protect differentiation. It is no acquisition or fusion with one of the established soft drink companies planned. 6. 3 Brand positioning The brand Bionade is a manufacturer brand. Bionade is presented in the market with four different flavours as a line extension under the one parent brand Bionade in only two different package sizes. Bionade will be positioned as a unique and healthy drink for everybody. They will achieve this positioning by a clear and differentiated branding strategy with using the following brand attitudes: 3 Figure 6: Brand attitudes of BIONADE Source: Bionade (2006), “The product”. The uniqueness and innovation will be presented by the different packing and a further support of the own research for a new product. Quality standards are guaranteed by the origin producing process and place. These underlie additionally their credibility. The value added ingredients are the health and wellness characteristics. The further support of local organic farming presents the social responsibility of the organisation (Aaker, 1996). 7 Marketing Mix Decision Based of the branding strategy and out of the strategic marketing objectives he following marketing mix is developed. It is differentiated in the product, promotion, price and distribution strategy (Kotler & Keller, 2006, p. 65). 7. 1 Product Strategy The organisation has only one product line. The product is identifies as a “Star” product according to the BCG Product Portfolio Analysis (appendix, chapter: 2. 6. 1). It performs well. Therefore less promotion activities on this product were done in the past. The growing competition and the risk of me too products are reasons to start promotion activities. The market position should be expanded by increase brand awareness.

Additionally over a new packaging the product line will be expand. The differentiate design of the glass bottle is useful for the gastronomy sector, but not practicable for sportive exercise as 14 well as for the “on the street use”. The 1l PET bottles are too big. Therefore the company will come out with an extra packaging format of 0,33 l and 0,5 l PET bottles. It is an easy to carry size and material and makes it an available and portable drink for everybody to every time. It is important to hold the unique design. The new PET bottles should not be sold in the gastronomy sector to keep Bionades unique positioning in hold.

Currently the company invest in researching to come out with a new product in ca. 2010 for the market. It will be innovative. 7. 2 Promotion Strategy The marketing campaign objective is built up brand awareness and increase the need for the product by the population. The promotion strategy focuses on a pull strategy directly to the customer to achieve brand awareness. Customers will be promoted by a information based message. Information about the products and the value added ingredients will achieve credibility. The small marketing budget determines the promotion activities.

First they will be local as well as in the main cities. The first marketing campaign focuses the domestic market. The following tools and actions are defined: Promotion tool Action Implementation % of marketing budget Advertising – Placates (outside and in schools, universities, bars and clubs) and local radio spots – Internet ads (mailing sites like hotmail, gmx, etc. ) – Print ads in magazines (fashion magazines for women) 05/ 2007 40% 15 Promotion tool Action Implementation % of marketing budget Sales promotion – Free samples in universities, schools, fitness studios and on company events 02/20071 30%

Sponsorships/ Events – Sponsoring of local sport events like marathons, beach volleyball competitions (summer) and skiing and snowboarding events (winter) Sponsoring of local music festivals and concerts 05/ 2007 25% Direct Marketing – Establish database of customer, especially the organic food users to send mailings from 2008 Start establish database from 01/ 2007 5% Public Relations – no PR planned, because of the good publicity and the small marketing budget – – Placates and radio ads are used to get to the mass market. Print ads in fashion magazines are useful to promote the product for the younger adult women.

They are often more interested in a non alcohol drinking alternatives in the evenings then men are. Sponsoring of local music festivals is used to get closer to the teenager and younger adults. Sponsoring of sports events like local running marathons and soccer events as well as beach volleyball competitions in the summer are planned to increase brand awareness in the trendy and hip scenery of younger adults as well as them with sportive interests. A database will be established to build up a intensive relationship with the customer. The healthy food user are the 1 This is already done by the company.

Therefore it will starts in the beginning of the new year. 16 focused group that are promoted by special mailings with information about the organic food sector. The marketing budget for the international markets is 30 %. The domestic market is focussed. In 2009 the marketing department has to redefine the budget and the necessary marketing tools for the international markets in relation to their sales increase. 7. 3 Price Strategy Plan is a price increase of 10 Cent on retail level in 2007. The current retail price of around 0,50 €/ 0,33 l bottle is compared to other soft drinks to low. The quality of the product allows a higher pricing.

Totally the price should be adapted to the main soft drink carbonates brands of Coca Cola Company and the other main players in the soft drink market (Appendix, chapter 2. 1. 2). The pricing strategy follows a mass strategy. In future the pricing strategy has to be adapted at inflation effects. The pricing strategy in Western Europe follows the same in Germany. For the other international countries the pricing has to be adapted to the local market pricing of soft drinks. 7. 4 Distribution Strategy The distribution strategy is a mass market strategy. Currently all traditional retail channels in the domestic market are selling the product.

For the other western European countries the same mass distribution strategy is planned. The distribution by Coca Cola Company is used for the market entrance in theses countries, especially for supply the traditional retail sector, which will be the main future channel for the organisation. Key customers like Ikea are supplied directly by the company. There international presence will be used additionally to get into new international markets. 8 Organisation and Implementation The marketing strategy is implemented by the marketing department in cooperation with a marketing agency.

The current human resources in the marketing department have to be proven. Probably one full time person should be recruited. Additionally internal marketing for this marketing strategy is important to have “everybody in the same direction” and to increase understanding for the higher amount of the marketing budget. The small size of this 17 organisation makes communication easier because of shorter decision and communication ways. On the other hand there is potential of intra conflicts regarding the small budgets. 9 Control The purpose of the marketing promotion action plan (chapter 7. 2) and the efined marketing objectives (Chapter 2. 3, especially figure 3) is the guideline for the organisation. Sales planning, revenues and costs are presented monthly and annually, the expenses are presented monthly and annually. Market share should be controlled regarding the plan based on the results of Euromonitor international. A market research database will be implemented that includes all these data. Especially regarding the missing experience in advertising the company will control the planned tools in kind of their efficiency. Key data will be defined to measure the marketing campaigns. Customer surveys could be used for it. 8 II Appendix: Marketing Audit 1 Introduction This marketing audit consists of six areas (Dibbs et al. , 1994; Kotler, 1988): ?? The marketing environment audit consists of an analysis of the current macro- and task environmental forces for the Bionade GmbH. ?? The marketing strategy audit presents an analysis of the current marketing strategy, the culture of the organisation, the marketing goals and objectives, strengths and weaknesses, opportunity and threats (SWOT) of it. ?? The marketing organisation audit includes an analysis of the formal structure, the functional and the interface efficiency of the firm. ? The marketing systems audit consists of an analysis of the current marketing information planning and control system the Bionade GmbH uses. ?? The marketing productivity audit includes an analysis of the profitability of the product and the whole company Bionade as well as a cost-effectiveness analysis. ?? The marketing functions audit consists of an analysis of the current marketing mix. Products, distribution, advertising, promotion and the current sales force will be analysed. The following chapter present the different parts in detail. 19 2 Market Audit 2. Marketing Environment Audit 2. 1. 1 Macro Environment The analysis of the macro environment is based on the P. E. S. T model (Chartered Institute of Marketing, 2004) Macro environment Source: Chartered Institute of Marketing (2004) 2. 1. 1. 1 Political and legal forces The domestic market is influenced by the high level of recycling and waste recovery. There is a deposit of 0,25 € on a bottle of Bionade. The German government implemented a deposit (0,25 € for <1,5 l packages; 0,50€ on >= 1,5l packages) on non-refillable plastic bottles and cans in January 2003.

This “Dosenpfand” forces customer to take their empty package back to the retailer where they get their deposit back. It includes all types of packages like cans, glass and plastic bottles except of paper based ones. Fruit juice, diet drinks, wine, champagne and spirits are free of the deposit. The time the law came out the retailer were not prepared for it. There were no national solution or system built up to handle with this amount of plastic packages. Retailer did not believe in the law until January 2003. Customers were confused. Millions of losses were proposed.

In 2004 the volume sales of carbonates in Germany were going down by about 5% because of the effects of the new depositing system. In May 2006 the government complement the law by including all non-carbonate soft drinks like functional drinks, RTD teas and coffees. Only 100% fruit juices are not included. The recycling and deposit system also has new regulations. 20 Every retailer has to accept empty packages and send them back out of the same material they are selling. This regulation brings out package decisions as an important issue for the whole soft drink industry.

At time manufactures and retailers are confused. There is no clear meaning if PET or cans are probably the best main package format for the future. One third of German customers support already this system. Supposable it is more a temporary effect (Euromonitor International, 2006, p. 2-8). Bionade is an organic drink. It has the official “Bio” sign from the organic food board of control of the European community. The agriculture department of the European Union support the sales and the cultivation of organic food. The further east enlargement would facilitate a market entrance in these countries.

Regarding a global expenditure the political forces depends on the country. A market entrance in the fast development countries has a high risk potential of political uncertainty. The US government started with an organic food standard label in 2002 (Euromonitor International, 2006, p. 7). A market entrance would bring along to gain this certification for Bionade. Only with this “local” label they could increase and sell the same high quality image they already have. In addition the US government relaxes laws to the food manufacturer regarding health issues. Now they allow presenting the positive effect on nutrition, health, etc. n their labels. In addition the negative image Coca Cola, Pepsi, etc. have regarding the further development of health and nutrition problems of the Americans would give an option for a successful market entrance. All in all the political forces are all supporting a further production and distribution of Bionade. Regarding the legal issues in an international context the patent law is not valid for the US and the Chinese market. The US patent privilege is too expensive (Lange & Lange, 2006). China has no existing law in the field of patents on brands/ ideas or technologies.

Regarding a long time view a US guaranty on brand and process would be necessary. The Chinese market has to react on the actual existing legal problems of copying brands. In future probably international regulations would come out (Euromonitor International, 2005). 21 2. 1. 1. 2 Economic forces The domestic market is clouded by a low economic growth and a cautious consumer spending behaviour. A high unemployment quote and the economic uncertainty are reasons of higher savings attitudes of the German population. In addition the developed markets are characterized by saturation and maturity.

But anyway Western Europe has one of the highest average life standard and income in the world. Germany with an average income of 2. 254€/ month (without tax) and an economic performance growth (” Bruttoinlandsprodukt”) of + 0. 9% from 2004 to 2005 it is one of the main consumer markets (Federal finance office Germany, 2005). For a further increase of sales the value added of products gets more important. The healthy positioning of Bionade should be focused. Out of a global perspective the Asian as well as the eastern countries of Europe are the fast growing markets.

But the current income and price level in these countries are far below the western European one. 2. 1. 1. 3 Social forces The developed countries are characterised by declined birth rates and an ageing population (Euromonitor International, 2005, p. 3). In future the “over 50’s” are an important segment of consumers. The main user group of carbonates are teenagers and younger people. But Bionade targets to all ages of people. The mineral ingredients (magnesium and calcium) and the low sugar level by fewer calories make it a drink for” everybody”. There is also a trend of urbanisation and smaller household sizes.

The increased number of single households as well as the “fast-paced” lifestyle provides a single-serve packaging that is portable (Euromonitor International, 2005, p. 4). Consumption “on the go” as well as using stylish but robust products are characterized the market at present. Bionade is only served in small glass bottles with a crown cap, as a beer bottle. One the one hand it is stylish for the consumptions in bars or cafes. On the other hand for a normal day use it is not useful and practicable. Easier handling is guaranteed by smaller size PET bottles. Bionade only offers the product in a 1 liter size (Bionade, 2006).

Already carbonates are the most consumed drink in the soft drink market with an off trade volume of sales of 140 million litres in 2004. But Euromonitor International (2005) assumes that the off trade volume of bottled water overtakes the carbonates volume in 2006. Sugar over22 laden carbonates are not the preferred drinks any more. The increased sales volume of Bionade over the last years authenticates the current health and wellness trend in consumption patterns. The trend of consumer behaviour in the whole food industry is more and more focused on organic and healthy food and beverages.

Regarding drinking patters there is a trend of functional and flavoured variants of water as well as a further use of healthy drinks or new tea variants. Customers are setting more and more a high value on organic farming, saving the environment and anti-globalization. The industrial food production is affected by a negative image because of many food scandals over the last years. All these forces support the organisation’s business. In addition the growth of volume in most of the German soft drink segments is done by private labels (Euromonitor International, 2005, p. 99ff).

Bionade as a small company benefited of these trends over the last years as it suppose to do in future. Regarding a global perspective the US market follows the same organic food trend which is seen in Western Europe. The cumulative amount of overweight people, especially children, let mount the consumption of low calorie drinks as the main carbonate product. 2. 1. 1. 4 Technological forces At present Bionade is the company with the most develop techniques producing soft drinks. Normally soft drinks are mixed drinks with a lot of sugar. Bionade is a fermented drink. (Bionade, 2006). At present there are no substitutes for this product.

The current patent on the process and the brand protects the company for me-too products. The current trends would further support a development and outcome of healthy and functional drinks. Regarding an international growth, particularly in the developing countries, there is a risk of copying, because of unclear guidelines and laws in international cases. 2. 1. 2 Task Environment 2. 1. 2. 1 Market segments Official Bionade operates in the market for soft drinks, as a non-coke carbonate and as a functional drink. In reality it has an own small niece market segment for organic soft drinks.

Kowalsky describes his drink as a “(… ) global public beverage based on organic ingredients” 23 (Anon 2006a). It is a drink for everybody. Out of a product based view Bionade targets the following main consumer groups: 1. A healthy diet drink for older customers (Organic food users) 2. A beer, non alcohol alternative for teenagers and trendy and life- style focused adults 3. A functional sport drink for fitness and sportive people 4. A children drink 1. As an organic drink, firstly Bionade was only sold in special organic food stores. The target segment using these stores is characterized by older, often feminine customers.

They often live beyond the main cities. Their interests are “green”: Saving the environment and anti globalization are the main themes. Their lifestyle is not much influenced by actual trends. Mostly they have a higher income. They emphasise on quality of food, the process and the origin of the product. Bionade could focus more the healthy added value for this market segment to increase the consumption beyond the main cities. 2. The product obtains popularity since it arrives in the media scene of Hamburg. From there it runs through all main cities in Germany, Switzerland, Austria and the Netherlands.

Today Bionade is more used by the trendy and hip segment of younger adults and teenagers. They are mostly single households with a high level of income. Their attitudes are following the actual trends. Especially in the media branch Bionade is already a cult. In addition it is an alternative drink at the evenings in bars, clubs or at the daytime in cafes. For this market segment at present it is more popular as a bar drink than as a beverage for taking home. There is a potential to increase the sales by a further using of Bionade as a standard drink at home. 3. Bionade is in addition a functional drink because of the mineral ingredients.

In this time it is not main used and popular as a sportive drink. It is sold in fitness studios but not area-wide. 4. Because of the organic ingredients, but sweet flavours parents buy it for their children (Bionade, 2006; Anon 2006b; Anon 2006a). In addition the market segments are limited by geographical criteria (Germany, Netherlands, Austria and Switzerland) (Bionade, 2006). This gives an opportunity on a further growth by international expansion. In the following part current situation and potential of the soft drink market is analysed. 24 2. 1. 2. 2 Market development BIONADE GmbH is located in the soft-drink1 market.

It belongs to the carbonates (non carbonate soft drink) as well as to the functional drinks or sport drinks. It is a national germane product. At present the company focuses the domestic market as well as the neighbouring markets Austria, Switzerland and Netherlands. The further tablet shows the trade volume for soft drinks in Western Europe in an overview for the current sales regions of Bionade: Soft Drink Market Western Europe: YEAR 2003 2004 2005 2006 2007 2008 2009 2010 Total region 73,902. 23 74,248. 22 75,703. 42 77,477. 46 79,339. 98 81,223. 31 83,041. 22 84,906. 57 Germany 16,785. 53 16,848,79 17,123. 8 17,343. 86 17,564. 18 17,862. 59 18,092. 14 18,333. 52 Switzerland 1,265. 17 1,354. 43 1,416. 02 1,470. 53 1,522. 12 1,571. 30 1,616. 42 1,661. 62 Austria 1,625. 18 1,547. 14 1,527. 16 1,550. 44 1,573. 78 1,577. 69 1,577. 88 1,579. 21 Netherlands 2,070. 45 2,134. 43 2,182. 75 2,239. 41 2,281. 10 2,318. 39 2,352. 35 2,381. 80 Soft drinks off trade Volume in Western Europe (in mn litres) Source: Euromonitor International 2005, “Soft drink market history and forecast”, p. 99ff. The soft drink market of Western Europe increases over the last years with an off trade volume of 75. 703, 42 million litres (2005).

The market is forecast to reach nearly 85. 000 million litres in 2010. Except of Austria all distribution markets are following the same trend. The Austrian market volume declined from 2003 to 2005. But the forecast is already positive. The domestic market Germany is the main market in Western Europe by an off trade volume of 22. 61%. The global soft drink market follows the same trends as in Western Europe. In 2004 it amounted to a total sales volume of 344 billion litres. The US is the largest national market with over 21% of global off-trade volume sales (2004). The developing market is the Asian pacific region.

China presents the fastest growth. The volume increases of 16% from 2003 to 2004. The following table shows the sales development of the global soft drink market by region: 1 Soft drink comprises carbonates, fruit juice, bottled water, functional drinks, RTD tea, RTD coffee and Asian speciality drinks (Euromonitor International (2005), category definition, p. 186f) 25 Regional Sales of Soft Drinks 1999-20041 Source: Euromonitor International (2005), “Global market for Soft drinks”, p. 103. The global off-trade soft drink market is forecast to amount a volume of 440 billion litres in 2009.

The fast developing countries should be focused. The comments above show a still growing soft drink market in all regions of the world. Even if Bionade has already potential to increase the sales volume in the present markets, a further penetration of the whole European market is recommended (e. g. by a market entrance in other main European countries like France, Spain or UK as well as the eastern part of Europe). In addition Bionade is not presented in the largest soft drink market – the US – as well as in the fast developing countries like e. g. China or India. Out of a global perspective this are the main markets for the future. . 1. 2. 3 Competitors, Distributors and Dealers, Suppliers In the following part the main competitive threats of Bionade are analysed. Therefore the model of Porter (1985) is used. 1 Size of the bubble denotes retail sales 2004 (US$ million) 26 Five Forces Determining Segment Structural Attractiveness Source: Porter (1985), “Competitive Advantage”, p. 225. Bionade opens a market niche of with their market segment of organic soft drinks. Regarding this market segment it has a unique selling proposition. Presently there are no new entrants, but there is a high risk that the market niche would be attacked.

The patent on the producing process and the label is a kind of guarantee, but new innovations or product launches of the established brands and products could be potential entrants in the next years. The market for functional and healthy drinks is growing. There are no direct substitutes for Bionade as an organic drink, but there are kinds of different functional and healthy drink brands already on the market, which could be indirectly substitutes. Therefore it is additionally necessary to analyse the competitor structure out of the whole market for soft drinks.

Competitors Regarding the whole soft drink market there is a high level of competition. Out of an industry concept of competition (Kotler & Keller, 2006) the soft drink market could be nearly characterised as a differentiated oligopoly. There industry is determined by a small number of 27 companies like CocaCola, Pepsi, Orangina-Schweppes and Nestle. The following table makes it clear which power only a few companies already have in this market. Major Players in the global soft drink market Company 2000 2001 2002 2003 2004 Coca-Cola Co, The 24,9 24,5 24,3 23,6 23,3

PepsiCo Inc 12,5 13,2 13,1 12,8 12,7 Danone, Groupe 3,9 4,3 4,8 5,4 5,7 Nestle SA 3,6 3,7 3,9 4,1 4,1 Cadbury Schweppes Plc 3,3 3,3 3,2 2,9 2,8 % off-trade volume of the world Source: Euromonitor International (2005), “The world market for soft drinks”, p. 158f. The CocaCola GmbH, with a market share of about 20. 2% in Germany and 23. 4% in the world in 2004 is an important player in this market. But the Market share of the big players is declined. The last years the Volume sales growth is done by small private labels. Only Nestle and Danone could increase their global market share.

They focussed on healthy and wellness drinks, particularly in the water segment over the last year. Regarding the Western Europe the market shares are nearly the same. The following table shows the three main companies in volume for every different soft drink segment which are direct or indirect substitutes for Bionade. Major Players in the soft drink market1 in Western Europe Rang1 Rang 2 Rang 3 Carbonates Coca-Cola Co, The PepsiCo Inc Cadbury Schweppes Plc Fruit Juice Eckes-Granini PepsiCo Inc Coca-Cola Co, The Bottled Water Nestle SA Danone, Groupe Castle Group

Functional drinks GlaxoSmithKline Plc Coca-Cola Co, The Red Bull GmbH RTD Tea Unilever Group Nestle SA Pfanner Getranke GmbH, Hermann Ranking by Major Players Soft Drink Market Western Europe 2004 Volume Sales Source: Euromonitor International (2005), “The world market for soft drinks”, p. 160ff. Bionade is a substitude of the well established carbonates from them like Zero- Coke, Diet- Fanta, Diet-Pepsi or Orangina. In addition the flavoured and functional water of Gerolsteiner 1 The soft drink market includes additionally Concentrates, RTD Coffee and Asian Speciality Drinks. 28

Brunnen, Nestle Waters or Danone Waters targets mainly the same group of people. A range of different functional and healthy wellness drinks from the big players as well as from small private labels or discounters are presented in the soft market. For Bionade the current position would probably not the same in the next years. After a failed acquisition offer by the Coca Cola Company Bionade is already recognized as a competitor for these companies. Therefore they would use their power and largeness to increase their market share. New innovations and product launches would be used to get into the market niche of Bionade.

The following part shows the two main competitors Coca Cola Company and Nestle SA in detail. The other competitors dispose of similar strengths and weaknesses. Therefore a detailed view is not presented. Coca Cola Company in detail (Coca Cola Company, 2006): Coca Cola Company is originally based in the US. Popular of the main Brand “Coca Cola” the company sells already around 400 different Brands in the beverage market around the world. Product examples in the soft drink market: Carbonate Market: Coca Cola, Fanta, Sprite in “Zero” Version, “Diet” Version, with different flavours, etc.

Functional drinks: POWERade Bottled water: Bonaqua with different flavours like apple, lemon, etc. RTD Tea: The Wellness Main strategy: ?? Market penetration in the developing countries ?? Growth market share in the bottled water market (it is currently the smallest market for Coca Cola) ?? New product launches and innovations with low calories and health and wellness drinks in the developed countries 29 Strengths: ?? Major player in all market segments of the soft drink market, particvcularly in the carbonate market ?? Financial resources ?? Strong branding ?? Established products and well known ??

High influence on distribution level Weaknesses: ?? No direct competition product in the organic carbonate segment of Bionade ?? No strong brands in the healthy and wellness segment ?? Failed acquisition of the company Bionade, no knowledge on process technology ?? Negative image and declined trend in the segment of high sugar carbonates like CocaCola and Fanta, etc. ?? Negative trend on the big names, trend to small ones (anti globalization) in the developed countries Nestle SA in detail (Nestle SA, 2006): Nestle SA is French concern, which sells products and brands around the whole food market.

Chocolate products, baby products, breakfast cereals, ice cream, dairy products, pet care, prepared food, beverages and bottled water. They offer the beverages by a healthy and active communication, but there products like Nescafe or Nesquik are not main competition products to Bionade. The main competition products are in the bottled water segment. Product examples in the soft drink market: Bottled water: Nestle Pure Life, Nestle Aquarel, Vittel (with different flavours), San Pelligrino, RTD tea: Nestea without sugar, 30 Main strategy: ?? Market penetration in the developing countries ??

Growth market share in the bottled water market by acquisitions Strengths: ?? Major player in the market segment of bottled water in Western Europe ?? Strong branding ?? Broadly based portfolio of products and brands in the whole food sector ?? High influence on distribution level Weaknesses: ?? No direct competition product in the organic carbonate segment of Bionade ?? Strong branding in the RTD Coffee segment (Nescafe), not in the wellness segment ?? Soft drink market is not the main competence ?? Negative trend on the big names, trend to small ones (anti globalization) in the developed countries

Out of a market view there are additionally some smaller brands, which are closed to the Bionade brand: ?? “Sinalco” (Beverage group Hoevelmann, Duisburg, Germany) as an old traditional small German lemonade brand. ?? “Almdudler” (Almdudler-Limonade A. & S. Klein GmbH & Co. KG, Austria) is a local austria herb lemonade (the light version is without sugar). ?? “Carpe Diem” Kefir, Kombucha or Gingko (Sock Vital GmbH Austria, member of the Red Bull Company) is a healthy/ wellness function drink out of nature ingredients. 31 “Carpe diem” is the main substitute or closed product to Bionade in time.

The positioning and branding is similar to Bionade. It is distributed by Red Bull Company (Energy drink) in Germany, Africa, USA and Australia pacific, but the Red Bull brand is completely separately sold and branded. No customer knows the connection. Even if “Carpe diem” targets mainly the same audience and has a similar positioning the Austrian brand is not popular in the German beverage market. There are no main advertising campaigns on this brand (Carpe diem, 2006). In the organic market segment in Germany the Voekle GmbH came out with “Voekles Bio lemonade”.

It is sold in glass bottles, but with a higher price (0,89 cent/bottle) (Annon, 2006d). There are several organic beverages from other companies like Beutelsbacher and Perger. Their products are distributed over organic food stores. They all only target the organic healthy food users. They did not entrance and at time they are not focusing traditional distribution channels of soft drinks (Lange & Lange 2006)). In addition to the main competitors shown above the German soft drink market is also influenced by the further growth of private labels of the discounters (Lidl, Aldi).

They offer drinks in the wellness and functional segment to a less price. At time Bionade could offer a higher price because of the “BIO” label and the unique selling proposition (Oekotest, 2006). But there is already a high price pressure by the discounter labels presented. In conclusion for the future it is important to retain the leadership in this market niche. The competitors are strong because of their power over the whole distribution process, the financial strengths and the broad portfolio of brands they have. The market is determined by these global players.

Additionally there a several small companies and brands already in the wellness drink market and the number of participants would increase. Suppliers At present there are no main risks from suppliers visible. Bionade draws their ingredients only from organic farming, preferential from the local area. It is a small market of suppliers. The time the company started their business they needed 2-3 tonnes of elder for production. Today they need about 120 tonnes. 10 farmers are working for the company today. The number would increase. One problem could be that the potential of growth is possibly not as fast as the company needed. 2 Distributors and Dealers In Germany Bionade is primarily distributed by restaurant, bars, nightclubs, hotels and supermarkets/ hypermarkets and independent food stores. In addition convenience stores (petrol stations), department stores and cash and carry warehouses already have this product in their assortment. Company canteens of Daimler Chrysler, RTL, Commerzbank, etc. offer the drink to their employees as well as schools. Beverage vending machines are used in the non store retail sector. The time the company started Bionade was main sold over health food stores, beverage wholesalers and retailers and the gastronomy.

Since 2004 the CCE AG (Distribution Company of Coca Cola Company) has the distribution rights of Bionade. With this cooperation Bionade went trough the country. Already all traditional retailers like Metro, Rewe, Ikea or Edeka ordered this product. Bionade bypassed even the “listing price”, which is normally paid to get into an assortment of a retailer. The strong sales growth let to supply squeezes in some time. Therefore at present there are no essential buyer forces. The company is not fast enough to meet the demand of their product.

International markets (Austria, Belgium, Switzerland and Netherlands) are distributed by defined wholesale companies: ?? STIEGL Getranke & Service GmbH & Co. KG (Austria) ?? VHC Hocras Bussum (Netherlands) ?? THAT’S iT! AG (Switzerland) Wholesalers are well established in this market segment. Especially for the smaller retailer, like convenience stores (except of the big brand petrol stations like for example BP) wholesaler are necessary to reduce costs and expanse service. Warehousing, inventory management, customer service, transportation issues and less coordination and administration work are main advantages for wholesaler.

For a further international growth the distribution without wholesalers would be effective for the big supermarkets and department stores. At present Bionade has no direct competitor. It has already a high power regarding the distribution level. In a long term perspective the distribution segment is one of the most important issues Bionade has to look at. In the Western European soft drink market 33 supermarkets are the most used sales channel, followed by convenience stores and independent food stores. A direct selling is an opportunity but because of the product characteristics and the buying behaviour it should not be focused.

Therefore in future Bionade needs the retail and wholesale level to sale their lemonade. Even if the main thirst is satisfied the power of Bionade is less. The supermarket segment is determined by a high grade of concentration. Companies like Metro, Carrefour, Wal-Mart or Tesco are the main organisations in the western European supermarket segment. Competition and pressure in placing and promoting products in their stores is grand. Big competitors like Coca Cola Co. and Nestle are well established and already presented with a range of products and brands.

It makes it difficult for smaller organisation to promote their products in the same way the big companies do. It is the same for the gastronomy segment and franchising companies. Bars, nightclubs and restaurants are partly determined in selling products by special contracts with the beverage industry. The contract with the distribution company of Coca Cola was important to guarantee a further sales growth of Bionade. It is a risk to have no own logistic and distribution system, but compare to the shown issues and the size of the company the current solution is the best one.

Regarding an international expansion the distribution network of Coca Cola Company could help to entrance effectively and successfully in new market areas (Anon, 2006b; Lange ; Lange, 2006; Bionade, 2006). Facilitators and marketing firms The fast growth of sales redounds to built up a new factory hall over the last two years. The warehouse facilities of Bionade are currently five tanks with a total volume of 130. 000 litres). Bionade needs only four days in production, compared to beer which has to mount about four to five weeks. Big warehousing facilities are not very important in this time.

Since 2004 the CCE AG (The distribution company of Coca Cola) is responsible for the whole logistic. Therefore an own transport system for a small company like Bionade would not be as effective and successful as the well established system of Coca Cola already is. The financial resources of Bionade are small compared to the big global competitors. The time before Bionade the company nearly went broke. The investment of 1,5 million € to invent Bionade are no financial risk anymore, because of the positive sales growth over the last years.

Current facilities could be used from the old beer brewery. New financial resources were used 34 to expand the capacity. There is already a high risk, because of the young age of the product and brand. Bionade has to survive in the market over a couple of years to get a better rating. The advertising agency performance could not be measured. Bionade already started to think about an advertising campaign in the next year. Currently the marketing department is working with “Bluhm and Kuvert” a marketing agency from Frankfurt, Germany, which is closed to the location of the company.

They designed the bottle and support the development for the small marketing activities like flyers, “table information” or “vending helps”. Because of the less budget there were no main marketing activities by this company. For the first marketing campaign probably a bigger and more established marketing agency will be necessary (Bionade, 2006; Anon 2006d, Orth, 2006). Publics The company has a good standing and image in the public because it is small and innovative. The local area is supported by Bionade by offering new work centres as well as a further increase of the local organic farming.

The dependence of the locals increased over the years. This could be a opportunity problem for Bionade in future (Kallenbach, 2006). 2. 2 Marketing Strategy Audit 2. 2. 1 SWOT Analysis Out of the comments above the SOWT analysis shows the strengths, weaknesses, opportunities and threats for the company. It is presented in the main part, chapter: 4 as a summary out of the comments above. 2. 2. 2 Business Mission There is no official business mission available for the author. Therefore the following comments are based on secondary data and information. The business mission sounds attainable.

It is more social focused. Out of the current trend of social marketing, Bionade takes this into the mission of the business. Bionade invests in organic farming that save the environment, improve the situation of the locals and a new healthy alternative for the population. 35 2. 2. 3 Current Business Objectives and Goals The current business objectives are: ?? Sales 2006: 60 million bottles in Germany, 3 million bottles international ?? Turnover 2006:1 21 million EURO in the domestic market and 1,05 million in the international market2 ?? Support local organic farmers up to 10 in 2007 producing for the company ??

Improve brand awareness in the domestic market ?? International market entrances in 2007 ?? Start running the new factory in the springtime of 2007 ?? Keep at credibility in all internal and external activities ?? Increase marketing activities in 2007 These business objectives are not specific. A detailed sales and budget planning should be defined. 2. 2. 4 Current Marketing Strategy The current marketing strategy is based on a clear positioning of the brand Bionade as a new innovative healthy drink. The branding is clear defined and differentiates the product by package and bottle design.

The origin of the product the completely organic process in production as well as the local social issues the companies target is additionally presented by there internet presence. Brand credibility is the main characteristic. The marketing strategy focuses at present on a mouth to mouth process. Free samples for universities, company events and bars and nightclubs, combined with placates, table information paper and stickers are the current marketing activities to improve the brand awareness and therefore the sales. There are no more marketing activities at time.

The budget 1 Valuated by the author by a manufacturer price of 0,35 € per 0,33 bottle. 1l bottles are not included. There are less sold. 2 The price level in the current international markets is similar. The same manufacturer price is used. 36 for marketing is small1. The ideas of increasing marketing activities in 2007 are not formulated in a whole and an integrated strategy approach. Because of less marketing activities the company currently presented the author comes to the assumption that they have no clear marketing strategy with defined marketing actions.

Even if at time marketing activities are not required to increase sales in the next years Out of a long time view and to be prepared regarding changing consumer’s behaviours marketing activities are necessary. Therefore the company has to increase their marketing budget. The marketing resources should be allocated to the product and brand. 2. 3 Marketing Organisation Audit Today Peter Kowalsky is doing the daily business as an associate partner and executive director of the BIONADE GmbH. He is one son of Sigrid Peter Leipold. The other son, the master brewer Stephan Kowalsky, is also associate partner and is doing the operation management.

The family business has today about 60 employees. They have a marketing manager (Bionade, 2006). There are no information about the size and the internal organisational structure available. The marketing department would be small because of less marketing activities and the small portfolio of only one product. The main employees would be working in the production. The small size allows a more informal structure approach in organisations. Information ways are often shorter; communication is easier than in big companies. The marketing manager would be closed to the managing director.

The interface efficiency could be measured out of this external perspective. The author supposed that the marketing manager has to explain further marketing activities and spending. Speciality in a time the business is running so well. 2. 4 Marketing Systems Audit The author supposed that there is no established marketing information system. For an effective marketing relationship management as well as a further increase of the communication management with the customers a marketing information system is necessary. Market research 1 There is no information available about the current marketing budget. 7 is the basic for a successful and effective customer related marketing strategy and mix. This includes the development of a marketing planning and control system to measure future actions. Even if the business is small the planning of sales and forecast is important. Data and numbers have to be available through all functions. A system solution has to be standard. Additionally the measurement of the market needs well based sources to come out with realistic objectives and plann