1.0 INTRODUCTION

BACKGROUND
The course instructor of The Principles of Management-201 Md. Amlan Jahid Hague assigned the report on the planning of soft drink brand Virgin. The report is conducted as a requirement for the course. The report will encompass an overall view on the various marketing strategies taken by Global Beverage Company Limited – the local Virgin vendor.
Scope
The report is done on Virgin in Bangladesh – the marketing strategies undertaken and the corresponding market feedback. The report has also taken into consideration the existing players in the soft drinks market in Bangladesh – Coca-Cola, Pepsi, Fanta, Sprite, and the like. The details of the particular moves taken by the competitors of Virgin are not covered. The scope of the report is limited only to the horizon of GBCL’s marketing moves. The report thus has a narrow scope with an in depth view.

VIRGIN: THE GLOBAL BRAND
Virgin, the newest sensation in the world of ‘only’ Coke and Pepsi, has been one of the most ‘exciting’ brands around in the global market of today. The company and its more charismatic CEO Richard Branson have ousted the traditional or ‘new generation’ colloquial by Coke or Pepsi and have entered the world of irrelevant, out-of-the-ordinary youth by sponsoring the black out in the sun of the new age. Targeting early teens to youth adults around the world, Virgin bears the true spirit of the pioneer of the non-traditionalists. The brand has challenged the traditional market leaders like Coke and Pepsi openly as The Virgin CEO famously welcomed the Pepsi CEO into an open war of elimination that will remain only one winner and then publishing the letter as an advertisement in national magazines in the US. Such bold move only inspires the trendsetters not the mere followers. Virgin bears the same spirit to its all-new business
acquisitions, namely Virgin Music and Virgin Atlantic Airlines. Virgin is dedicated to continue its gutsy operations all around the globe as it explores new markets and opportunities.

VIRGIN IN BANGLADESH: COMPANY OVERVIEW
Global Beverage Company Limited (GBCL) is the Virgin vendor in Bangladesh. Global Beverage is a subsidiary of one of country’s famous business groups – Youth Group.

Global Beverage Company Limited (GBCL)
Global Beverage Company Limited has been appointed as the exclusive franchisee of Virgin Enterprises Ltd., UK, the trademark owner of products & services provided globally under the “Virgin” brand name, for manufacturing and marketing of carbonated beverages in Bangladesh. The Virgin carbonated beverage is a much-talked name especially among the young generation of Bangladesh. It is a fastest growing carbonated soft drink (CSD) in the UK as well as in Bangladesh. The Youth Group has brought the Virgin in cans and PET (Poly Ethylene Thuptheller) bottles. This is the first domestic venture as well as the first step in the food and beverage industry by the Youth Group.
Already the company has been able to win a strong consumer base across the country and also enjoying a significant competitive edge over its rivals in the CSD industry. GBCL successfully launched and is now running a completely new brand of drinks in a market, which is predominantly a ‘Coke Market’. The Youth Group Chairman also reflects such advantage in the statement:

“We have so many competitive advantages over our competitors that one can’t imagine. We are not saying that we are the best, rather we ask the consumer to taste Virgin and other brands and compare which is the best.”

Such positive approach towards marketing the product has made GBCL a leading beverage concern in Bangladesh.
Virgin: The Brand
As a brand, Virgin is a global one in today’s world. Same is true for Bangladesh beverage market. Virgin, as a brand, has unique brand name, logo, vision, mission, target market, and other elements related to any brand. Let us start discussing each of these brand related aspects one by one.
Logo
The corporate logo of Virgin is an attractive one as well. The logo is as the following:







The logo illustrates the nontraditional, extrovert image of the brand across categories of Virgin brands. The logo for Virgin Beverages in Bangladesh is a bit different from that. The Virgin logo for Bangladeshi beverages is as the following:








The additional bubbles and the colorful curves around the Virgin logo along with the inclusion of the word “Drinks” have increased the association of the beverages with the generic brand name of Virgin.
Line Extension of Virgin
From the beginning of its operation, Virgin has gone for line extension of its brand with the objective to meet the need of the consumers across various types and categories of CSD consumption. The line extensions helped Virgin in gaining greater initial trial by greater number of customers and to keep the ‘testing’ several extensions of Virgin Drinks. The present line extensions of Virgin are as follows:

1. Virgin Red for Cola
2. Virgin Orange for Orange
3. Virgin Blue for Lemon and Lime
4. Virgin White for Diet


Brand Vision
The brand vision of Virgin Drinks in Bangladesh is as follows:
“Establish “Virgin” as an international, the most innovative and trendy, premium quality, carbonated beverage brand of Bangladesh.”
Brand Mission
The mission of Virgin Drinks is also formulated in line with the brand vision. The brand mission is:
“Delight the consumers with product innovation, international premium quality standard at an affordable price that offers consumers the best value for their money.”

It is evident from the brand mission that Virgin is committed to serve its consumers its the best beverage in the market with due consideration of both economy and quality. The key word in the brand mission, which is “Delight”, represents the true essence of Virgin throughout the world.

Psychographic Characteristics of the Brand
Virgin as a brand initially comes from it’s founder and CEO Richard Branson’s personality i.e.

 Not afraid to take monopolistic/duopolistic companies
 Stands up for what he believes in – not afraid to be individual
 Never bland


 Fun – “… not polar bears and cuddly toys; more edgy and in your face! An irrelevant humor that manages to get Richard Branson noticed!”

Moving on from Branson himself – the brand has been translated into a number of ways.
The brand’s culture and value system has been an example of the psychographic character of Virgin that is:

 Irrelevant
 Challenging the status quo
 Doing the “impossible”
1.1.1.1 COMPETITION
Individual CSD Companies and Their OverviewThe market of soft drinks is growing fast. As a result, many companies are looking to get into the market like Akij Group is going to launch Macca-cola next year or even a new product like Mountain Dew is a threat for Virgin. The competition can be discussed in terms of top of mind (TOM) awareness, and total spontaneous awareness. TOM awareness means how people are aware about the brand or product.
There are mainly three beverage companies in Bangladesh other than Virgin. Salient characteristics of each of these are discussed below:
Coca-Cola
1. Undisputed leader in the market until recent shake out by the top rival Pepsi and Virgin
2. Brand, which is not just more than 100 years old, but is the most popular word in English
3. A company, which made a profit of US$ 4129 million in 1998
4. Coca Cola was inactive for over two and a half year in terms of promoting the brand in all levels
5. Wake up call took place in the mid-2000 with vigorous promotional campaign
6. Demand pull is the strength of the brand: Almost generic
Pepsi
1. Pepsi suffers from past product quality issues; now almost has recovered from
this issue
2. Has been highly dependent on trade push; now the demand pull is playing a
greater role
3. Has grown 30% in the last year
4. Best in-store visibility: Visicoolers
5. Very effective in terms of buying of unconventional media
6. Over 500 on-store signs, majority in Dhaka
7. Very strong in wall painting and shop branding
8. Slice has made a high impact in the market


Royal Crown (RC Cola)

1. Has not been very successful in the cola segment
2. Royal Crown, the first in the cloudy lemon segment, is their cash cow
3. Has been ‘dumping’ goods on credit in the initial stage; now enjoying some demand pull mostly due to RC Lemon
4. Launched 1 lit. glass bottles in 1999
2.0 Objectives
The main opportunity for virgin drinks is to expanse its market.On the basis of that opportunity found, virgin would set its main objective. The main objective of virgin is –
* Increase market share to 30% by the end of the year 2007.
And to implement the main objectives the other objectives set by virgin are -

1. To achieve and maintain maximum trust and royalty of the customers.
2. To make effective marketing research.
3. To discover new market and develop existing and new product.
4. To maintain a steady and firm trade promotion.
5. To establish sound consumer promotions.
6. To accomplish effective supply chain.
7. To increase the sales of Virgin.

3.0 CONSEDERING PLANNING PREMISES
The third logical step in planning is to established, circulate and obtain agreement to utilize critical planning premises forecasts, applicable basic policies, existing company plans.

1.2 INTERNAL
To analyze the specific activities through which Virgin drinks can create a competitive advantage, it is useful to model the company as a chain of value creating activities Michael Porter identified a set of interested generic activities common to a wide range of firms. The resulting model is known as the Value Chain and is depicted below

The goal of these activities is to create value that accedes the cost of providing the product or service, thus generating a profit margin.










a. Inbound Logistic: Include the receiving, warehousing and inventory control of input materials. These activities virgin drinks dose very successfully as there was never any lack of production or lost sale for virgin drinks in the market.
b. Operations: Is the value creating activities that transform the inputs into final product. Virgin also does it very successfully, to transform inputs into final products virgin installed with state-of-the-art equipments imported from Europe and East Asia. GBCL’s investment in the capital machinery costs approximately Tk. 20 crore.

c. Outbound Logistics: are the activities required to get the finished product to the customer, including warehousing, order fulfillment, etc. Virgin use distributors to get the finished product to the customers. The distributors of virgin is “Falcon” and “Armo”

d. Marketing & Sales: are those activities associated with getting buyers to purchase the product, including channel selection, advertising, pricing, etc. Virgin ran a range of TV and print advertising in the print and audio-visual media. The advertisements were able to create the instant awareness by the target audience about the ‘cool’, out-of-the-ordinary, trendy image of Virgin as it is prevalent around the world. Consumers rushed into convenience stores and food shops for Virgin cans
These five categories are generic and portrayed here in a general manner. Each generic activity includes specific activities that vary by industry.



3.2 EXTERNAL
THE BOSTON CONSULTING GROUP APPROACH FOR VIRGIN DRINKS



Using the Boston Consulting Group (BCG) approach the company GBCL classifies its SBU Virgin Drinks to the growth share matrix shown in the above figure the circle represents the current size and position of the business unit. The size of the circle depends on the dollar volume of the business. The location of the business unit indicates its market growth rate and relative market share




2.0 IDENTIFYING ALTERNATIVES


The fourth step of planning is to search for and examined alternative courses of action. Especially those not immediately apparent. There is seldom a plan for which reasonable alternative does not exists, and quite often an alternative that is not obvious proves to be the best.
GBCL will undertake a variety of scheduled programs to implement their objectives.

a. GBCL will invest a high amount in advertisement in visual media from September 2006.
b. GBCL is also thinking to give discount in their product during the period September 2006 to December 2006 to carry out their marketing strategy.
c. GBCL will create awareness for their product by serving the drink for free to the young’s at educational institutes of the country.
Virgin Drinks can broadly be termed as a consumer product. To be more specific, it is a convenience product. The reasons of Virgin being a convenience product are:

 Carbonated soft drinks are a product of frequent purchase; little planning go behind in buying a soft drink; the drinkers hardly put any shopping effort or compare while buying a soft drink
 The prices of CSDs are quite low compared to other products in Bangladeshi market
 Virgin has gone for widespread distribution for the convenience of its customers throughout the country
 Mass promotion like TV advertisement, print advertisement has been adopted by Virgin to make it more popular in the market


3.0 COMPARING ALTERNATIVES IN LIGHT OF GOALS SOUGHT

After seeking out alternative courses and examined their strong and weak points the next step is to evaluate alternative courses by weighing in light of premises and goals. One course may appear to be the most profitable, but it may require a large cash outlay and have a slow payback. Another may look less profitable but may involve less risk; still another may better suit the company's long range objectives.
a. Expansion of market: The expansion of market is a great scope for Virgin. The market of soft drinks is still growing by 12%. Therefore, Virgin has a great chance to increase its market. Moreover, people are moving towards soft drinks. Again, the income of general people is increasing, but the price of soft drinks is still same. Consequently, the potential consumer is increasing.
b. Revenue policies: Government had imposed tariff for the beverage companies few years back. Though Virgin pays its tax regularly, many beverage companies sorted out illegal means to get away of tax. However, recently government has become strict and controlling the tax system closely. Hence, companies now have to pay their tax regularly. The brand manager, Mr. Javed Iqbal watches it as an opportunity for his company as now they will compete with the competitors fairly.
c. Discount: Virgin is now offering a discount with every PET (1 or 1.5 liter) bottle. Virgin is providing a small “Surf Excel” pack with every PET bottle, which is a big opportunity for Virgin. Because homemakers are now more looking for these PET bottles and in that way it is entering into the family. Thus, the market of Virgin is growing fast.

The features that would help virgin the best chance of meeting goals at the lowest price cost and higher profit:

a. Virgin Cans: As Virgin is the first locally made beverage that used aluminum cans for the first time in Bangladeshi market. Such feature helped Virgin Drinks to ‘go truly mobile’ as a drink. Other CSD brands still do not have any canned drinks except Coca-cola and Pepsi marketed recently in this market. This feature was highly welcomed by the consumers especially who need to carry a drink to places outside.
b. Taste: The taste of virgin is also different than other soft drinks and the specialty of the taste is its more spicy than other drinks which a major tool to attract young market.
c. Virgin Diet: Virgin is also offering virgin diet for health conscious people. This would also help promote expansion of market for virgin.
Except the above features virgin has the unique quality control measures that ensure the quality of Virgin Drinks precisely. The GBCL plant has an online analyzer, capable to detect any quality problem while on production. The analyzer continuously monitors the raw materials and product at every stage.
4.0 CHOOSING AN ALTERNATIVES

This is the point at which the plan is adopt the real point of decision making. Occasionally an analysis and evaluation of alternative courses will disclose that two or more are advisable, and the manager may decide to follow several courses rather than the one best course.
a. Threat of intense segment rivalry: A segment is unattractive if it already contains numerous, strong or aggressive competitors. It is even more unattractive if it is stable or declining, if plant capacity additions are done in large increments, if fixed costs are high, if exit barriers are high, or if competitors have high stakes in staying in the segment. These conditions will lead to frequent price wars, advertising battles, and new product introductions and will make it expensive to compete. As the segment for virgin drinks is all levels of consumers as virgin drinks do use mass marketing, though according to this concept the segment is not that attractive as it already contains strong or aggressive competitors like Coke Cola or Pepsi.

b. Threat of new entrants: a segment’s attractiveness varies with the height of its entry and exit barriers. The most attractive segment is one in which entry barriers are and exit barriers are low. Few new firms can enter the industry, and poor performing firms can easily exit. When both entry and exit barriers are high, profit potential is high but firms face more risk because poorer-performing firms stay in and fight it out. When entry and exit barriers are low, firms easily enter and leave the industry, and the returns are stable and low. The worst case is when entry barriers are low and exit barriers are high. Here firms enter during good times but find it hard to leave during bad times. The result is chronic overcapacity and depressed earning for all.


Barriers and profitability
In Bangladeshi CSD market here the entry barrier is low as any beverage company won’t face that much trouble to enter in Bangladeshi CSD market. And for Beverage Company the exit barrier can be high as the firm need to invest a high amount in their fixed assets, so to exit from the market in can generate loss for the company. So Virgin Company is in a position where it has low, risky returns.
a. Threat of substitute products: A segment is unattractive when there are actual or potential substitutes for the product. Substitutes place a limit on prices and on profits. The company has to monitor price tends closely. If technology advances or competition increases in the substitute industries, prices and profits in the segment are likely to fall. Virgin drinks have a few substitute products like for juices the companies are Pran, Sezan, and Star Ship.


b. Threat of suppliers’ growing bargaining power: A segment is unattractive if the company’s’ suppliers are able to raise prices or reduce quantity supplied. Suppliers tend to be powerful when they are concentrated or organized, when there are few substitutes, when the supplied product is an important input, when the costs of switching suppliers are high and when the suppliers can integrate downstream. The best defenses are to build win-win relations will suppliers or use multiple supply sources. In this segment in Bangladeshi CSD market, companies can take supplies from different suppliers, so suppliers can not raise the price of their supplies. So there is no threat of suppliers’ growing bargaining power.

8.0 FORMULATING SUPPORTING PLANS

When a decision is made, planning is seldom complete and a seventh step is indicated. Derivative plans are almost invariably required to support the basic plan.
There are two methods of collecting data. They are: a) Primary data
b) Secondary data
Primary Data: Primary data’s are those, which we collected through interviews. We collected most of the information we required through the interviews. We took the interviews of the chairman Mr. Abul Quasem Haider and brand manager Mr. Javed Iqbal.
Through interviews, we tried to find out their problems, their strategies, goals and what controlling measures are they taking to solve problem.
Secondary Data: Secondary data’s are those, which we collected from documents. Besides taking interviews, we requested them for some documents. They were free and they served us
every thing we required. . An IMRB Report on Beverage Industry has also been used in this purpose.
LIMITATIONS
1. The primary data received from the respondents could not be verified and might be biased
2. Information gathered from web browsing about Virgin might not be accurate enough
3. No organized study is available regarding the soft drinks industry of Bangladesh
4. The researchers have lack of enough knowledge regarding the market mechanism and other marketing approaches that might affect the analysis of collected information
10.0 SUMMARY
Summary
It can be summarized from the earlier sections of the report that Virgin Drinks has been able to establish itself as a strong brand that represents the exuberance of youth – the mobility and quality. The company - Global Beverage Company Ltd. proved the fact that if a company targets to meet the demands of its present and potential customers with a quality product, it is only a matter of time to win the preference and loyalty of the customers. The marketing mix of Virgin was a successful one as it has contributed to establish itself as a successful CSD brand in the market. The sales volume of Virgin is on the rise at a steady rate and the market is expanding in terms of both number of consumers and volume sold. The brand is now an established one bearing the true spirit of its founder – Richard Branson.