Sanitarium Marketing Plan: Weet-Bit and Competitive Analysis

This report presents a comprehensive marketing plan for Sanitarium, focusing on its Weet-Bit cereal and its strategic positioning within the Australian and Auckland markets. The plan begins with an executive summary and an introduction outlining the report's objectives, followed by an in-depth environmental analysis using the McKinsey 7S model and PESTEL analysis to evaluate the internal and external factors influencing Sanitarium's operations. A competitive analysis, employing Porter's Five Forces, assesses the competitive landscape, including threats from new entrants, supplier and customer bargaining power, and competitive rivalry. The marketing plan then outlines Sanitarium's objectives, market segmentation strategies targeting the 'Healthies' segment, and proposed marketing campaigns to increase market share by outperforming competitors like Kellogg's. The report emphasizes the nutritious benefits of Weet-Bit, its distribution strategies, and the company's commitment to sustainability and employee development. The analysis covers market segmentation, competitor analysis, and marketing objectives, providing a detailed overview of the company's approach to expand its market presence and achieve its marketing goals.

Running head: SANITARIUM MARKETING PLAN 1
Sanitarium Marketing Plan
Student’s name
Institutional affiliation

SANITARIUM MARKETING PLAN 2
Executive Summary
The marketing plan focuses on the current state of Sanitarium in the Australian cereal market.
This plan outlines the company’s marketing campaign that will help it improve its Weet-Bit
product and outlines the new campaign that it will employ to attract new customers in
Auckland. In fact, it analyses the internal environment, external environment, and
competitive pressure in the targeted market. The purpose of this campaign is to increase
Sanitarium’s market share by outsmarting Kellogg, which seems to enjoy the targeted market.
It intends to achieve this target by focusing on the Healties segment, integrated promotional
mix, and product improvement. This paper analyses the organization, market, and
environment thus determine the position and segmentation strategies for Sanitarium.

SANITARIUM MARKETING PLAN 3
Introduction
This marketing plan outlines the marketing campaign that Sanitarium uses to
introduce Weet-Bit in Auckland. This report analyses the current marketing environment or
situation to determine the best strategy to improve its market share and outsmart its
competitors. In the second section, the report addresses the aspects of marketing strategies
that Sanitarium should for its Weet-Bit product thus achieve the marketing objectives. Weet-
Bit has nutritious benefits including high fibers, carbohydrates, and essential vitamins. It is
demonstrated that Weet-Bit will continue to ensure the Australian families fly into their daily
actions. Sanitarium’s Weet-Bit has balanced cereal to meet the nutritious needs of the
primary and secondary markets. The report also demonstrates the distribution strategies that
Sanitarium should use to reach its targeted customers.
Section 1: Environmental Analysis
1. Internal environment
McKinsey 7S MODEL
Strategy
Sanitarium has incessantly used a wholiciuos strategy to remain competitive in the
market. It has positioned well-being and health at its brand’s heart. Importantly, it has
invested in sustainability strategy, social media strategy, logo and branding, and website
strategy. Importantly, the value-based and cost-based pricing strategies have given the
company an edge in the market. With cost-based pricing, Sanitarium uses the cost of the
product to set the prices of Weet-Bit (Kennedy, 2012). For instance, the organic Weet-Bit
cost more than original products. It also uses the perceived value of Weet-Bit to set prices.
For example, many consumers perceive the product as convenient for consumers thus making
it expensive. It emerges that many consumers would pay more for the convenience products.
Structure

SANITARIUM MARKETING PLAN 4
Sanitarium NZ has Kevin Jackson, who is the chief executive officer. Under the
stewardship of Kevin Jackson, the company has grown to become the largest-selling
breakfast cereal in New Zealand and Australia (Byrd, 2015). The General Manager, Rob
Scoines, who took office in 2017, assists the CEO (NBR, 2017). The company has the senior
management and the board who are members of the Seventh-Day Adventists. Based on the
firm’s structure, the South Pacific Division’s President is the chair of the board. This implies
that the CEO is answerable to the board, while the senior managers are answerable to the
CEO (Byrd, 2015). The departments in the company include operations, corporate project,
finance, human resources, marketing, business development, R&D, and quality assurance.
Systems
Sanitarium has invested in the new and advanced systems to help in delivering
services worldwide. With the state-of-the-art systems and facilities, it has put its operational
costs in check. It has also adopted the GBSs to allow it to offer the best practice services to
the local clients (Sanitarium, 2017). Sanitarium can use intensive selling and distribution
through outlets like convenience stores, gas stations, and supermarkets. Appendix B
compares Weet-Bit with its rivals’ brands in Auckland.
Skills
Sanitarium is an important company offering staff personal development and learning
opportunities to workers (Sanitarium, 2017). Given the current economy in Australia, the
workers require technical ability and high-level skills to transform the company.
Staff
Sanitarium’s employees are enjoying working in the company thus demonstrate their
commitment to the firm (Sanitarium, 2017). Interestingly, Sanitarium builds a staff from
within as the company considers ages in allowing them to take leadership and responsibilities

SANITARIUM MARKETING PLAN 5
thus ensure they feel valued. Sanitarium also values staff diversity in enabling to achieve its
product innovations and development.
Styles
The organization has adopted various styles to enhance its operations. For instance, its
management style seems to promote innovation, creativity, and accountability (Sanitarium,
2017). Interestingly, at the company, the managers’ delegate duties to staff thus make them
responsible and improve their skills. The company also values employee’s career
development by promoting learning and development.
Share values
Sanitarium operates under the culture of hard work, efficiency, customer services, and
individual responsibilities (Sanitarium Health Food Co, 2010). Based on the value
proposition of workers, the shared values encompass leadership, culture, recognition, and
development (Sanitarium, 2016). The company has established a workplace culture that
guarantees customers the best results through staff satisfaction.
2. External environment
PESTEL Analysis
Political factors
The political environment in New Zealand and Auckland is favorable for the
investors. The political elites have formulated various laws for the government to implement
to boost the investor confidence (Sanitarium, 2017). With political stability, Auckland has
attracted many investors.
Economic
The cereal industry has suffered significantly from the recent economic turmoil. For
instance, many consumers are unwilling to spend more of their disposable income on
overpriced goods. According to the report of Reserve Bank of New Zealand, the consumer

SANITARIUM MARKETING PLAN 6
price index has increased by over $0.3 in cost (Reserve Bank of New Zealand, 2010). It
implies that the cost of products has increased thus making it difficult for consumers to
afford.
Social
The social environment has always defined the success of many industries. Today,
most of the households stock breakfast cereals. In New Zealand, for instance, the packs of
cereals used by each household are higher than many European countries ( Hubbard Foods
Ltd, 2010). In the social factors will continue to influence the consumption of Weet-Bit.
Many families have preferred quick breakfast thus increasing the demand for Weet-Bit.
Technology
The technological environment is important for Sanitarium is achieving barrier to
entry. The company has invested heavily in R&D to develop the new products like Weet-Bit
(Sanitarium Health Food Co, 2010). With the new technology, the organization will continue
promoting healthier cereal products. The technological trends seem to influence Sanitarium
because of many consumers have expressed interests in health and quality foods.
Environmental factors
Sanitarium must consider environmental factors to remain relevant to the current
market. Indisputably, the waste and packaging remain essential for manufacturers. To this
effect, Sanitarium has to honor, preserve, and care for the environment. Sanitarium is part of
the National Packaging Covenant thus has to implement various initiatives including using
the recyclable packaging materials (Sanitarium Health Food Co, 2010).
Legal
The New Zealand government has adopted various regulations to define the
operations of companies like Sanitarium (Wilkinson, 2009). For instance, the New Zealand
Food Standards Code of 2002 continues to regulate the cereal product companies thus

SANITARIUM MARKETING PLAN 7
ensures the manufacturers make the right labeling and healthy ingredients thus inform the
consumers regarding the nutrition information (Wilkinson, 2009). The New Zealand
Advertising Standards Authority has created a fair platform where companies can raise
complaints regarding TV ads. Sanitarium must adhere to the codes of ethics to influence its
reputation. Wilkinson also reported that the manufacturers must consider the new Food Bill
that was introduced by the Parliament (Wilkinson, 2009). This involves complying with the
standards of breakfast cereals.
3. Competitor Analysis
Porter’s Five Forces
Threats of new entrants
The entry barriers remain high to this cereal market. This is because; the new entrant
must allocate high capital in cash and equipment to compete with the established firms
(Euromonitor International, 2015). The marketing costs also remain high, as it has to compete
with the established brands.
Bargaining power of suppliers
Since the suppliers are available to offer main ingredients like cereals, the bargaining
power of suppliers is low. Similarly, the switching cost is not high thus; the company can
seek the services of another supplier (Euromonitor International, 2015). This makes it
difficult for the suppliers to influence the company’s production.
Bargaining power of customers
Customers of Sanitarium have an insignificant powerful influence on the industry. For
instance, there are only a few major players in cereal industry. In most cases, the consumers
rarely purchase a large quantity of these products at one point (Euromonitor International,
2015). Similarly, the low bargaining powers of customers could be related to the increasing
demand for health-conscious cereals.

SANITARIUM MARKETING PLAN 8
Competitive rivalry
Sanitarium must be ready for the fierce competition, especially with companies
engaged in the production of health-conscious cereals (Sanitarium, 2017). In Auckland,
Sanitarium has no direct competitors regarding all-in-one breakfast cereal product. In fact, no
company in the targeted market offers products offering both healthy development and
weight control benefits to obese children. It appears that many companies neglected the obese
kid’s thus making the competitive rivalry to be medium.
Threat of Substitution
The indirect competition is evident in this industry, as Sanitarium competitors offer
high in fiber and rich, nutritious breakfast products. The consumers can consider these
alternative products to be the best weight control products, especially the parents of obese
children. For instance, Kellogg’s, Uncle Toby’s, and EnviroKids are some of the
organizations offering rich nutritious and low in fat breakfast products (Euromonitor
International, 2015). These firms threaten Sanitarium in the market thus making the threats of
substitution to be high.
4. Competitive analysis
Sanitarium faces stiff competition from Kellogg’s Nutri-Grain Cereal and Uncle
Toby’s Plus Range. The Nutri-Grain Cereal brand appears stronger commercially. Most
Australian customers value the Kellogg’s brand because of its extensive strengths in
resources. The company operates in 17 different countries thus granting it the best
distribution channels. The Kellogg’s brand is found in nearly 180 countries worldwide.
However, the products are valued expensively thus lowering consumers’ purchasing power
(Allan, 2009). Kellogg has also invested in its social environmental responsibility thus giving
it an edge in the market. Additionally, Sanitarium faces competition from Uncle Toby’s
brand. Uncle Toby’s oats have contributed to the Australian breakfast cereal market. In fact,

SANITARIUM MARKETING PLAN 9
Uncle Toby’s brand is trusted among Australian consumers. With local manufacturing, Uncle
Toby’s brand has established a strong relationship in the market.

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Section 2: Marketing plan
Introduction
This report outlines the Sanitarium’s marketing campaign regarding its continued
efforts to serve its customers beyond the Australian market (Euromonitor International,
2015). The data collection regarding this report relates to the current market situation and the
Sanitarium’s marketing strategies in achieving its marketing objectives in Auckland market.
Company background
Sanitarium is a leading Seventh-Day Adventist Church-owned company. In 2010, the
firm recorded the highest revenue when it reported $347 million in revenue (Sanitarium,
2017). With the consumers opting for healthy foods, Sanitarium will remain an indisputable
market leader. The ready-to-eat cereals remain an oligopoly market operating at mature life
cycle stage.
Marketing Objectives
 To increase the market share of Sanitarium by 10 percent within two years
 To become the leading player in the Auckland cereal market, especially the customers
aged 30-49 years.
Market Segmentation
The Sanitarium offers a highly nutritious breakfast cereal. Weet-Bit is valued in
different market segments across the country as it defines the Australian breakfast cereal
industry. To this effect, it appeals to all consumers, especially the young adults and university
students, who value healthy and balanced lifestyles. In most cases, these consumers are
healthy food and sports enthusiasts. As demonstrated below, the university students and
young adults are the primary target market for Sanitarium’s Weet-Bit.

SANITARIUM MARKETING PLAN 11
University
Student
Young
Adults
Children Older
0
1
2
3
4
5
6
7
Behavioral Segmentation
Behavioral Segmentation
The graph demonstrates the use of age as a segmentation variable. Similarly, the
Auckland’s cereal market can be segmented into the Healthies, the Sweet-Tooths, the
Energy-Junkies, and the Body-Watchers. Interestingly, the Healthies segment has emerged to
be the most nutritious product. As such, it is possible to improve and maintain the well-being
of customers. The Sweet-tooth is a segment offering the best taste for the kids aged 5-12.
This demographic segment defines the Australian cereal market (Euromonitor International,
2015). The Body-Watcher’s segment focuses on the nutritious conscious women age. It
intends to serve the interests of the 25-39 years. The Energy Junkies is a segment composed
of customers who enjoy an active lifestyle. These people engage in active sporting activities
and exercises as described in Appendix A.
Targeting
The organization will continue to organize the largest kids sporting events and the
KickStart Breakfast programs for the targeted consumers. This is strategy will allow it to
remain relevant to the market segments. In fact, by investing its resources in local and
national programs will ensure the Kiwi kids and their families adopt a healthy lifestyle. The
strategy of organizing the largest kids sporting events will be effective because the targeted

SANITARIUM MARKETING PLAN 12
customers will feel part of the company’s goals. The strategy will further bolster Sanitarium’s
profitability goals thus improves its market position and share in Auckland.
Marketing mix strategies for Auckland market
As part of Sanitarium’s product strategy, it intends to offer Weet-Bit to serve the
interest of healthy lifestyles. The great breakfast cereal foods like Weet-Bit are wholesome
foods offering the best flavor (Sanitarium, 2016). Weet-Bit has proved good for consumer’s
bodies. For the company to meet the expectation of the local market, Auckland, it has to
source ingredients. However, it has avoided sourcing the GM ingredients. The on-pack
labeling has seen Sanitarium label its products with ingredient lists.
Sanitarium has adopted an intensive distribution strategy. This strategy will ensure it
sells its Weet-Bit using different outlets including convenience stores, gas stations, and
supermarkets (Sanitarium, 2016). The intensive distribution strategy will ensure customers in
Auckland access this healthy product conveniently.
The company anticipates capturing the attention of the new customers. It will use
market-penetration pricing strategy to increase the population of new buyers (Sanitarium,
2016). Sanitarium will use the lower prices, especially for the Weet-Bit flavored products and
new original bites. This price will be cheaper than the initial market value by 20 cents. The
penetration pricing will help Sanitarium to expand its market share in Auckland.
Sanitarium intends to adopt different promotional strategies to attract the new
customers in Auckland. For instance, it will use sporting celebrities to sponsor sporting
events and teams. Constant promotional prizes and advertising will persuade Weet-Bit
customers to purchase the product. Sanitarium will continue to support and sponsor kids
sporting events like the “Weet-Bit Tryathlon” for Auckland customers (Euromonitor
International, 2015). Constant promotional prizes, advertising, and giveaways will turn the
targeted customers into regular consumers of Weet-Bit as shown in Appendix C.

SANITARIUM MARKETING PLAN 13
Positioning statement
The Sanitarium intends to continue engaging with its supply chain partners to achieve
its core values. The firm celebrates and respects its infinite values by continually caring for
the happiness, hope, and health of everyone. With a people-first philosophy, it has managed
to drive its business actions thus making Sanitarium unique. Its unwavering commitment has
seen Sanitarium enjoy the trust and love of Australian families. It demonstrates the
philosophy through its business operations in which it passionately serves customers with
integrity and care thus makes a meaningful and positive difference. It has also intended to
enjoy health and well-being thus promote wholistic and abundant living to nourish whole
being (Sanitarium, 2017). Sanitarium is supported its values as reflected in its passion,
integrity, humility, courage, and care for the community.
Implementation Plan
Appendix D demonstrates the action program, which highlights the events and actions
regarding the marketing plan for the introduction of Weet-Bit in Auckland. In the action
program, the action is accompanied by objectives, responsibility, period, and the budget.
Appendix E gives detailed financial breakdown regarding this action program. Despite the
significance of the implementation of the program, the challenges of financial and personnel
constraints will be evident. The company will have to increase its resources to market and
invest in Auckland. The financial related barriers will affect the company’s motive to acquire
new resources to use in marketing and related activities. Without relevant personnel, the
quality the quality of services would be compromised.
Section 3: Stakeholder Engagement
As part of the corporate social responsibility, stakeholder engagement is essential in
helping an organization in achieving its bottom line. Companies including Sanitarium engage

SANITARIUM MARKETING PLAN 14
stakeholders in dialogue thus address the environmental and social issues. With proper
stakeholder engagement, the company improves its accountability and decision-making
processes. This process of stakeholder mapping is essential in describing the internal and
external stakeholders. Sanitarium’s internal stakeholders are employees and management
while external stakeholders are customers and competitors (Morris & Baddache, 2012).
Without a doubt, businesses thrive when stakeholders are engaged effectively. Stakeholder
engagement will be essential in building trust because engagement improves the relationship
between stakeholders and Sanitarium. Indeed, engagement diffuses tension between the
stakeholders thus enhance solutions to various problems thus improves its productivity and
performance.
Sanitarium requires a matrix of traditional and digital engagement tools to engage the
external and internal stakeholders (Glover, 2014). In fact, the firm needs to invest in different
technologies and methods to remain competitive and efficient in delivering its goals. For
instance, the company can secure workplaces, where workers and management can share
ideas gather information, and contribute to Sanitarium’s projects. Additionally, stakeholder
engagement will allow the firm to establish strong teams where team managers or leaders can
assign tasks and communicate with other stakeholders (Glover, 2014). In addition, the
organization can use secure file sharing programs with an efficient audit trail, notification
emails, and document locking to serve the interests of stakeholders. Stakeholders can further
engage in consultation using comment forms, polls, and questionnaires.

SANITARIUM MARKETING PLAN 15
Bibliography
Hubbard Foods Ltd. (2010). Sustainability Report. Retrieved September 4, 2017, from
http://www.hubbards.co.nz/tbl.php
Allan, B. (2009, October). Children’s breakfast cereals. Retrieved August 2, 2017, from
http://www.consumer.org.nz/reports/print-view/childrens-breakfast-cereals
Byrd, A. (2015). Sanitarium: Old Company, Young CEO. Retrieved September 4, 2017, from
Adventist Review: http://archives.adventistreview.org/2005-1511/story1.html
Euromonitor International. (2015, March). Bakery in New Zealand. Retrieved September 2,
2017, from Country Report:
http://www.euromonitor.com/bakery-in-new-zealand/report
FMCG. (2012). Breakfast Cereals: The Most Important Meal of the Day. Retrieved
September 2, 2017, from http://fmcg.co.nz/features/category-reports/667-category-
check- breakfast-cereals-the-most-important-meal-of-the-day
Glover, J. ( 2014, January 23). How to Create an Effective Stakeholder Engagement Strategy.
Retrieved September 6, 2017, from Kahootz: http://cloud-
collaboration.kahootz.com/how-to-create-an-effective-stakeholder-engagement-
strategy
Kennedy, J. (2012, February 29). Digital Weet-Bix box in The Biggest Loser. Retrieved
September 4, 2017, from Bandt: http://www.bandt.com.au/news/media/digital-weet-
bix-inserted-in-the-biggest-loser
Morris, J., & Baddache, F. (2012, January). Back to Basics: How to Make Stakeholder
Engagement Meaningful for Your Company. Retrieved September 6, 2017, from BSR:
https://www.bsr.org/reports/BSR_Five-Step_Guide_to_Stakeholder_Engagement.pdf
NBR. (2017, March 17). Rob Scoines Appointed General Manager Sanitarium NZ. Retrieved
September 4, 2017, from My NBR: https://www.nbr.co.nz/article/rob-scoines-
appointed-general-manager-sanitarium-nz-200812
Reserve Bank of New Zealand. (2010). New Zealand Inflation Calculator. Retrieved April 4,
2017, from http://www.rbnz.govt.nz/statistics/0135595.html
Sanitarium. (2016). Company Information. Retrieved September 9, 2017, from
https://www.sanitarium.co.nz/about/category/company-information
Sanitarium. (2017). Weet-Bit is New Zealand’s No. 1 Breakfast Cereal. Retrieved August 30,
2017, from https://www.sanitarium.co.nz/products/weet-bix
Sanitarium Health Food Co. (2010). Rebelsports Super 14 Flyers Promotion. Retrieved
September 4, 2017, from http://www.sanitarium.co.nz/news/promotions/rebelsports-
super-14-super-flyers-promotion.aspx

SANITARIUM MARKETING PLAN 16
Wilkinson, K. (2009). Outdated Food Act to be replaced. Retrieved September 4, 2017, from
http://www.beehive.govt.nz/release/outdated+food+act+be+replaced

SANITARIUM MARKETING PLAN 17
Appendix
Appendix A
Components Healthies Energy junkies Body-watchers Sweet-tooths
Age 30-40’s 12-25 25-39 5-12
Income Medium-High Medium Medium-High Low-Medium
Lifestyle Healthy Sporty Urban Care-free
Involvement High Medium High Low
Occasion Breakfast Breakfast Breakfast and
snack
Breakfast and
snack
Appendix B
Components Sanitarium Uncle Toby’s
Weight 750 grams 460 grams
Variety Multi-grain, barley, oats Protein lift, sports lift
Price $4.19 $4.99
Value proposition Favourite for customers
above 40 years for breakfast
Real plump fruit,
wholegrains, nuts
Appendix C
Promotional schedule
Promotional mix 2nd Jan-Apr May-August Sept-Dec
Personal selling Sensitizing
customers about
Weet-Bit
Public relations Transform the
product to
Conduct
roadshows

SANITARIUM MARKETING PLAN 18
accommodate
parents and kids
around
Auckland to
increase
awareness
Print media Target mature
customers by
displaying it on
women’s
magazines
Intensify the
advertisements
in Women’s
Weekly
Print healthy
food recipes in
weekly
magazines
Ads in Herald
Sun
Television Running the
commercials on
TVs
Airing new
commercials at
9 o’clock
Appendix D
Action plan
Action Objectives Responsibility Deadline Budget
Launch Weet-bit
products with
nutritional value
To conduct value
addition
R&D 1st Jan 2018:
Implementation
Medium
budget
Introduce bite-
sized flavor to
the product
Increase sales R&D Logistics and
marketing
departments
Launch: 2nd Jan Medium
Social media
promotions
To improve brand
image and market
share
Social Media
Manager
Jan-Dec 2018 Low

SANITARIUM MARKETING PLAN 19
Print media, TV,
Radio
Improve brand
image and market
share
Advertising and
Marketing
Departments
3rd Jan-Aug
2018
High
Control and monitoring
Regular check-ups
based on budget and
actual costs
To avoid wastage and
inefficiency
Financial
Department
2nd Jan-
onwards
Marketing surveys To determine the level
of public awareness
Marketing
Department
2nd Jan-
onwards
Appendix E
Promotional budget
Promotions/Marketing 2018
Billboards, print media,
Radio, and TV
$250,000
Social Media $50,000
Changing Tryathlon of
Weet-Bit
$30,000
Total $330,000