Angostura Aromatic Bitters’ marketing plan

1. Executive Summary
1.1 Synopsis of the Situation

The history of Angostura aromatic bitters approaches the year of 1822, when a cholera epidemic whipped the population of Angostura in Venezuela, when the young doctor Johann Gottlieb Benjamin Siegert created a somewhat bitter medicine, quite unusual taste, but of proven volatilities effectively relieve the stomach of his many patients.

This potion was composed of over 25 botanicals in abundant natural reserves of these tropical lands, including fruits, roots, herbs seeds, bark, and a good amount of ingredients whose name and proportion remain, even today, in the strictest secrecy.

In 1830 a distillery installed and did not take long to become famous on the continent, winning the gold medal at the World Exhibition in Vienna in 1873.

After the death of Siegert in 1870, the family moved in 1875 to Trinidad and Tobago where there continues today making the Angostura aromatic bitters, preserving their behalf to keep the Venezuelan source most of their inputs to date, as well as also the peculiar label in four languages and signature of its inventor, who since then characterizes it.

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Its initial use was to relieve some stomach ailments. But some additional benefits subsequently discovered is that the strengthened the taste of certain foods and cocktails preparations, which made time disappear from kits home and hospital to become a common ingredient in bars and kitchens around the world .

Today is a precious ingredient in the preparation of cocktails and is also used as a seasoning for soups and sauces.

Drops of Angostura aromatic bitters is sold in small bottles of 100 cc and 200 cc, the most famous and popular brand Angostura aromatic bitters.

Usually drops in drinks (G & T, Mojito, Cuba Libre, Pisco sour), classic cocktails like the Manhattan, Champagne Cocktail, etc. used and refreshments as LLB - (Lemon Lime & Bitters) or "Fantasia" Rock Shandy, The Chapman, The Gunner.

Currently in the Colombian market there is not drop bitters, there are national essences bitter which are manufactured by CONDICOM and Productos El Bosque, which make the basic condiments for cooking. These national essences bitter have an alcohol content of 3 degrees, which makes you need to use a larger amount of product per cocktail or preparation, unlike drops Angostura aromatic bitters which have an alcohol content of 44.7 degrees making them stronger and with 2 or 3 drops per cocktail is enough to make the mixture, not only because of its alcohol content but the strong flavor of the merged its ingredients.

The category of biters brings sustainable growth in the global market of 4.7% in the last 5 years (Source: International Wine & Spirit Research). Angostura is still the leader in this category of bitter.

1.2 Key aspects of the marketing plan

We want to be the exclusive distributor of Angostura aromatic bitters in Colombia. For this reason, we have to import the product, market and build brand image of "Drops of Angostura aromatic bitters" in the country. Also, position the product as a reference category.

The key factors of this marketing plan are:
Comply with the requirements of law, such as trademark registration and authorization. The trademark registration protects the producer (trademark owner) against any misuse of it by a third; this register is valid for 10 years. The health record is the guarantee that emits a government institution, which certifies that a product is fit for human consumption. Segment drops Angostura aromatic bitters into two distribution channels, which would be the ON-PREMISE (hotels, restaurants, coffee shops and bars) and OFF-PREMISE big retail channel. Define the cities in which the product and the strategic trade partners (sub-distributors) through which will be sell. Define the selling price to the various distribution channels which through which we will reach the consumer. Develop activities that generate image and brand recall, such as trainings, competitions of cocktails, sponsor cocktails menu, accompanied by free-press training in each activity.

2. Environmental analysis

Colombia is a country with a population of 48,321,405 people (2013 estimates, source: DANE), it is in the 28th position in the table of population composed of 183 countries and has a moderate population density of 42 inhabitants per km2.

At 2013 the Gross Domestic Product (GDP) in Colombia recorded an increase of 4.9%, according to data provided by the DANE. Investment and consumption showed a great performance. The sectors driving growth in 2013 were: mining and quarrying (4.9%); electricity, gas and water city (4.9%); financial institutions, insurance, real estate and business services (4.6%); trade, repair services, restaurants and hotels (4.3%); Transport, storage and communication (3.1%).

Source: http://es.tradingeconomics.com/colombia/gdp

Colombia is the fastest growing economy in Latin America, surpassing the Pacific Alliance (Colombia, Chile, Peru and Mexico). In turn, the country ranked 15th in growth in a sample of 75 nations.

Source: world bank

The unemployment rate in Colombia in 2013 on an urban scale, in the 13 largest cities is 8.7 percent, the lowest since 1995.

The investment rate, the percentage of GDP that the country reinvests, reached 28.4%, the highest in half a century and the second in the region. Another important fact is that the force that is moving the economy is internal. Government consumption is growing at rates of 5.7% and 4% households. Within the household consumption stand purchases of durable goods, which accelerated during the third quarter of this has to do with the better performance of income and a higher level of confidence.

As for imported spirits market figures in Colombia by categories to December 2013 in boxes of 12 bottles 9 liters each one, are:
Alcoholic beverage
Number boxes
Whisky
403,189
Vodka
66,195
Gin
20,578
Brandy and cognac
1,532
Ron
205,518
Tequila
58,413
Wine
1,178,758

2.1 Strengths and weaknesses
Strengths:
Recognized as #1 in the world (large gap vs. competition).
High concentration and high level of alcohol, making the product more efficient. Strong price position (inelastic).
Rich in heritage and legacy (royal warrant).
The product is nonperishable.

Angostura will continue to make a consistently high quality product that will make people’s food and drink recipes come alive.

Angostura train people in the classics, as well, as the cutting edge to make them better bartenders and cooks.

Angostura will no longer see itself as traditional and old-fashioned, Angostura will exhibit flare, passion and attitude, and inject a little more irreverence. In ten years from now Angostura aromatic bitters will revolutionize the cocktail industry again and Angostura will be as popular a food ingredient as Lee & Perrin’s.

Angostura is one of the most iconic brands in the world. The rich, dark and mysterious liquid adds a distinguishable color and taste to all its creations (adding color and flavor to life).

Weaknesses:
Low visibility at point of sale (especially ON-PREMISE channel). Consumption
tax payable by the category, increasing the price.

2.2 Opportunities and threats
Opportunities:
Currently in Colombia the food industry (food and drink) is booming, a growth in recent years and still considered one of the 4 most important gastronomic destinations in Latin America.

There is no category of bitter in Colombia and would be the first brand in this category, entering with the most recognized brand in the world. Partnerships with other major spirit brands. Partnership with Pernod Ricard and Monin. Improvements made into accessing new markets.

Partnership with Bartender Guilds and Associations (The Golden Service, BAR) and schools of mixology. Slow food to capitalize on opportunity.  Currently the non-alcohol cocktails are booming.

Threats:
In Colombia the regulation of alcohol consumption is very strong. Financial monopoly, departments control the marketing of alcoholic beverages within its territory, to authorize or prohibit the entry of such products. Changing landscape of tax structure.

Parallel Trade.
Currently in Colombia there are two national brands of "essences" of bitter, which are CONDICOM and Productos el Bosque. In the future when the category of bitter "drops" will be develop; international brands reach (Fees Brothers, Bitter truth, Peychaud's, Bitter Cube, Bittermen's).

This kind product does not enough known in the Colombian market.

2.3 Current objectives and performance
The current objectives are:
Enter the brand in Colombia.
Develop nonexistent bitters category.
Create image and brand awareness to achieve the referent category in Colombia.

The performance of the marketing plan will be described in the following sections.

2.4 Five forces’ Porter analysis
Threat of New Entrants: Capital, economic muscle, expertise, brand, regulation, taxes. Power of Suppliers: The Angostura aromatic bitters’ business in Colombia has only one supplier who is the company who made the product. For this reason, the supplier is extremely susceptible to the demands and requirements of the market and hold very high power. Power of Buyers: The consumers of cocktails and food in Colombia are very price sensitive, but they want to taste new flavors and they are very susceptible to trends. Availability of Substitutes: The bitters drops have no substitutes, as a unique flavor enhancer with the ability to marry flavors in the preparation of all food dishes. Competitive Rivalry: the market of bitters in Colombia has two local brand competitors, but they are not concentrated bitters (drops), they are essences.

3. Marketing Strategy
3.1 Segmentation
As we mentioned above, Angostura Aromatic Bitters are used to be added to the cocktails and food to create new possibilities of flavor and a whole range of new and exclusive beverages and dishes.

Due to the Angostura Aromatic Bitters' conditions as an alcoholic beverage for the Colombian market (according with the requirements from INVIMA), Angostura Aromatic Bitters has to pay a special tax. For that reason, the price is higher than the Colombian competitors.

Angostura Aromatic Bitters’ segmentation is defined in the two next tables related with the consumer and business markets:

Segmentation variables for Angostura Aromatic Bitters’ consumer markets Geographic region
South, north, and central Colombian areas
City
Bogotá, Cali, Medellín, Barranquilla, Cartagena, Santa Marta, Pereira, Manizales, Bucaramanga Density
Urban
Demographic age
Above 18
Gender
Male and female
Religion
All. The product has a kosher certification
Social class
Middle, upper middle and upper classes
Behavioral occasions
Regular and special occasions

Segmentation variables for Angostura Aromatic Bitters’ business markets Demographic
Hotels, restaurants, bars, coffee shops
It does not matter the size
Located in major cities in Colombia
Operating variables
Customer who use to drink cocktails and gastronomy
Purchasing approaches
Hotels, restaurants, bars and coffee shops who wants to be different, to supply a different and new cocktails age, to offer to their customers a high quality alcohol and non-alcohol beverages. Situational factors

We focus either on large or small orders
Personal characteristics
We want to serve whatever hotels, restaurants, bars and coffee shops (ON PREMISE) and big retailers (OFF-PREMISE)

3.2 Target Market

According with the segmentation, the Angostura Aromatic Bitters´ targets are the main and representative hotels, restaurants, coffee shops and bars, from the main Colombian cities, who serves the middle, upper middle and upper classes of the population who are above 18 years (the minimum Colombian age to be permitted to a people to drink an alcohol beverage).

3.3 Positioning (Value Proposition)
Angostura Aromatic Bitters will position itself as the premier and unique enhanced flavor to non-alcohol and alcohol cocktail and food. This positioning will be achieved by leveraging Angostura Aromatic Bitters’ competitive edge: industry experience, innovation possibility and high quality.

Angostura Aromatic Bitters is a high quality product produced for people who wants to have a new flavor experience related with a non-alcohol and alcohol beverages (new cocktails age) and food.

The Angostura Aromatic Bitters’ company is able to use its vast experience and personal passion to create a high quality product to develop innovative and new flavored food and cocktails, for the whole cocktails drinkers and people who want to live a new experience about their food.

4. Marketing Programs
4.1 Product

Respected and recognized as the leader in aromatic bitters worldwide; no bar or kitchen is complete without it. Angostura Aromatic Bitters is a high quality product produced from alcohol and many others aromatic plants. Unique flavor enhancer (seasoning) for the preparation of alcoholic and non-alcoholic beverages, as well as, any savory or sweet food dishes. Sodium and Gluten-Free.

Exported to 150 countries worldwide.
Kosher Certified.
Tempers the acidity of citrus ingredients for individuals who are acid sensitive (also explains why Angostura aromatic bitters can settle the stomach). Classified as a food ingredient in many countries (in Colombia is classified as an alcohol beverage). Although the product contains 44.7% alcohol by volume, each drop contains an insignificant amount of alcohol and therefore remains non-alcoholic. 100% Vegan.

Because is more concentrated than the competition product, Angostura aromatic bitters yields more and their cost – benefit relationship is higher.

Through these features, we want to develop and add value to the Angostura Aromatic Bitters’ consumers and the brand, in order to be successful in Colombia as the product has had successfully in the world.

The price of the Angostura Aromatic Bitters make possible to generate revenues to all the different actors involved in the production and distribution chain.

4.2 Pricing
Although the price of the Angostura Aromatic Bitters is higher than the Colombian competence, because of the taxes and importation costs, their cost – benefit relationship is higher: Product
Volume per bottle
Alcohol by volume
Drops per bottle
Drops per cocktail
Cocktails per bottle
USD per botle
USD per cocktail
Angostura aromatic bitters
100 cm3
44.7%
180
2
90
11.4
0.13
Colombian essences bitters
148 cm3
3%
266.4
15
18
5
0.28

The product price is favorable for the dealers allowing them to have a very attractive profit margin:

100 cm3 bottle
USD
Revenues
% of price
Selling Price from producer to distributor
3.6

Distributor final price after import and taxes
4.5
0.9
25%
Selling price distributor to allied distributors
8.2
3.7
82%
Selling price allied distributors to final consumer
11.4
3.2
39%

4.3 Promotion

Use the original Angostura aromatic bitters’ webpage to show what the product is and several recipes. Create a viral marketing using Facebook, Twitter, Instagram, Pinterest to show the product. Using the mixologist’s network to develop the brand and product’s uses. Create Youtube videos in order to massify the recipes that used the Angostura aromatic bitters. Create cellular phones applications (android and iphone) to widespread the access to the people to the product and its uses. Make a cross marketing between hotels, bars, coffee shops and restaurants and all the places where the product will sell, in order to the people knows the benefits and they can learn how they can use the Angostura aromatic bitters. Create contests in each city to involve consumers highlighting their creativity to make new cocktails using Angostura aromatic bitters.

The bars, hotels, coffee shops and restaurants would make the winner's cocktail available, on drinks menu for duration of contest, the winners will be adjudged via customer sales for cocktail. The winners will participate in a national contest to be the Colombian winner and take the chance to go to the “Legends of the Cocktail” World Tour. Create learning and e-learning courses to teach people the uses of the product. Involve the use of the product in TV specialized food and beverage shows (free-press). Make free samples to the launch time, in order to distribute it across the main restaurants, hotels, coffee shops and bars in each main city of Colombia, to create product recognition.

Through these ways of promoting the Angostura aromatic bitters, we want to get consumers massively to become familiar with the product and its uses.

4.4 Distribution

The Angostura aromatic bitters will have the next logistics to make the distribution:

1. The company sells us the product directly from their manufacturing plant located at Trinidad and Tobago. 2. We import the product to our warehouse located in Cali – Colombia. 3. We will have one distributor for each main city in Colombia. 4. The selling will be doing by internet, by phone and by visit directly to the client. The dispatching will be centralized from our main warehouse and with the application system help, the product will be send to each regional distributor in order to be dispatched to each client. 5. The main clients will be the restaurants, hotels, coffee shops and bars located in middle and high income areas of each mains Colombian cities. 6. We will sell the product in selected big retail chains and in wine and spirits specialized stores.

5. Evaluation and control
5.1 Performance measures
Our strategic objectives are:
Expand the distribution by placing products in:
50 retail stores (OFF-PREMISE)
15 wine and spirits specialized stores (OFF-PREMISE)
1,400 on the ON-PREMISE nationwide.
Sale of 80% of first import at year 2015 (4,896 bottles during the year).

We will evaluate our marketing plan according with this metrics, also external and internal: External metrics
Metric
Measure
Market share per volume
Angostura aromatic bitter volume of bottles sold versus total bottles of essences bitters sold Market share per value
Angostura aromatic bitter total USD sold versus total USD of essences bitters sold Market share per customers
Angostura aromatic bitter total customers versus total bitters’ customers Consumer satisfaction
Surveys results from 90% of total Angostura aromatic bitter’ customer (hotels, restaurants, bars)
Loyalty
Percentage of customers who changed to the competitors
Distribution
Percentage of customers who received on time and full the deliver
Learning
Number of courses dictated

Internal metrics
Metric
Measure
Financial goals
Percentage of financial goals accomplish by period
Employee satisfaction
Internal survey results
Skill levels
Knowledge about the product and its uses
Learning
Number of new learning and e-learning course created.
Recipes
Number of new recipes created.

5.2 Evaluation procedures
The evaluation procedures we will do to do the performance measures are: Surveys
Direct customer and channels control visits
Statistical beverages consumer
Statistical sells
Statistics presence of the product in customers.