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THE IMPORTANCE OF UNDERSTANDING THE BUYER
BEHAVIOUR AND THE APPLICATION OF MARKETING
MIX ELEMENTS FOR ORGANISATIONAL SUCCESS
Prepared By
U. Yogachandran
PCM II/2012/KAN - 0030
Slim Kandy
July 2012
Preliminary Certificate in Marketing
SRI LANKA INSTITUTE OF MARKETING
Acknowledgements
My sincere thanks my lecturers Mr. Bharatha Herath, Ms. Perly Liyanage and Ms.
Tharangi Wijesooriya, for guiding me to complete this assignment.
It’s my duties to thank Ms. Indika and all other staffs of SLIM-Kandy, for providing an
excellent environment to study.
I wish to sincerely thank Mr. Sanath Piyawardhana (General Manager-Sales &
Marketing, OLCL), for guiding me to follow PCM and giving instructions to complete
this assignment and inspiring me.
Furthermore I wish to thank Mr. L.P.L. Hemantha (General Manager-Operations,
OLCL) for giving me details.
Also I wish to thank Ms. Shiromy Liyanage (Asst. Quality Manager-OLCL), Mr.Ikram
(Area Sales Manager - Expack) and my colleagues of PCM for giving me assistance for
this assignment.
I would fail my duties if I do not specially thank my beloved wife for encouragement
given to me to complete this assignment.
Contents
1. Product
1.1 Introduction to selected B2C Marketing Company
a) Product portfolio of Fonterra Brands Lanka (Pvt) Ltd
1.2 Introduction to selected B2B Marketing Company
b) Product portfolio of Expack Corrugated Cartons (Pvt) Ltd.
2. Marketing Mix
2.1 Introduction of Selected Brand
2.2. Detailed Marketing Mix Elements of Anchor Full Cream Milk Powder
a) Product attributes of Anchor Full Cream Milk Powder
b) Price attributes of Anchor Full Cream Milk Powder
c) Place attributes of Anchor Full Cream Milk Powder
2.3 Effective Marketing Mix of Anchor Full Cream Milk Powder
a) Matches customer needs
b) Matches corporate resources
c) Creates competitive advantage
d) Well blended
3. Organizational buying behavior
3.1 Introduction of Selected Product
3.2 Detailed Analyses of Buying Decision Process of Slotted Case Cartons.
3.3 DMU’s of Selected B2B Buying Process.
4. Levels of Products
4.1 Introduction of selected product
4.2. Five levels of Anchor Full Cream Milk Powder.
a) Core Product
b) Basic Product
c). Expected Product
d) Augmented Product
e) Potential Product
Findings and Conclusion
References
Limitation
Executive Summary
To : The Examiner
From : PCM Student
Subject : The Importance of Understanding The Buyer Behaviour And The
Application Of Marketing Mix Elements For Organisational
Success
Date : 06.06.2012
As an application of Marketing Mix elements in B2C, I have selected Anchor Full
Cream Milk Powder for analyzing application of Marketing Mix elements for the
organisational success.
I have selected B2B buying behaviour towards Expack Corrugated Cartons (Pvt) Ltd’s
for understanding the importance of the buyer behaviour.
I used tables, figures and pictures in this assignment, in order to describe my
assignment easily.
Introduction
I have selected Fonterra Brands Lanka (Pvt) Ltd and Expack Corrugated Cartons (Pvt)
Ltd as B2C and B2B companies respectively in task 01.
In task 02 I analyzed the Marketing Mix Elements of Anchor Full Cream Milk Powder,
which is marketed by Fonterra Brands Lanka (Pvt) Ltd.
In order to complete the task 03 I selected the OLCL’s buyer behavior towards Expack
Corrugated Cartons (Pvt) Ltd.
In task 04 I analyzed Anchor Full Cream Milk Powder’s product levels.
Methodology
I have done this assignment on understanding the Buyer Behaviour and Marketing
Mix, in task 01 I selected Fonterra Brands Lanka (Pvt) Ltd as B2C Company and Expack
Corrugated Cartons (Pvt) Ltd as B2B Company. I gathered data from internet and field to
introduce those companies and its product portfolio.
I select Anchor Full Cream Milk powder to for my detailed analyze of Marketing Mix,
I gathered Data to analyze from Mr. Sanath Piyawardhana, an Ex Sales Manager of
Fonterra Brands Lanka (Pvt) Ltd.
I Selected Orient Lanka Confectionery Private Ltd (known as OLCL)’s buying process
of master cartons from Expack Corrugated Cartons (Pvt) Ltd in task 03 for understanding
the buyer behaviour towards to the B2B Company, I gathered data from Mr. L.P.L.
Hemantha (General Manager-Operations-OLCL), Ms. Shiromy Liyanage (Asst. Quality
Manager-OLCL) and Mr. Ikram (Territory Manager-Expack Corrugated Cartons Pvt
Ltd).
In task 04 I have analyzed product levels of Anchor Full Cream Milk Powder, I
gathered data from Mr. Sanath Piyawardhana, an Ex Sales Manager of Fonterra Brands
Lanka (Pvt) Ltd for analyzing it.
As a summary I have gathered primary data from consumer research, market
observation and discussion with respective company staffs, and for secondary data I
referred web sites, previous marketing related researches, brochures and magazines.
Task 1
1. Product
1.1 Introduction to selected B2C Marketing Company
I have selected Fonterra Brands Lanka (Pvt) Ltd as B2C for my assignment. Fonterra
Brands Lanka (Pvt) Ltd is the market leader in the milk products in Sri Lanka, which is
started 30 years ago.
a) Product portfolio of Fonterra Brands Lanka (Pvt) Ltd
Following products are marketed by Fonterra Brands Lanka (Pvt) Ltd in Sri Lanka
under the brand name of Anchor. Anchor’s product portfolio as follows.
Table 1.1- Product portfolio of Fonterra Brands Lanka (Pvt) Ltd
Product Target Market
Anchor Full Cream Milk Powder
Even though this is special product for
children. Fonterra is not targeting to a
particular age segment.
Anchor 1+
Specially developed for children between the
ages of one and three.
Anchor Pediapro
Targeting children between the ages of one
and three.
Anchor Pediapro Mama
Targeting Pregnant mothers & Breast
feeding mothers.
Anchor Shapeup
For those who want to keep slim and healthy
Also Fonterra is marketing products under the brand names of Newdale, Anelene and
Ratthi.
1.2 Introduction to selected B2B Marketing Company
I have selected Expack Corrugated Cartons (Pvt) Ltd as B2B Company for my
assignment. Expack is an ISO certified, award winning manufacturer and marketer of
printed corrugated cartons to both the local Sri Lankan and export markets.
b) Product portfolio of Expack Corrugated Cartons (Pvt) Ltd.
Table1.2 - Product portfolio of Expack Corrugated Cartons (Pvt) Ltd
Product Description
Regular Slotted Case
Packaging any type of product from FMCG
to Horticultural to Industrial products
Die Cut Boxes
The cartons are used for packaging of food,
vegetable, as well as for livestock and can
withstand extreme temperatures.
Laminated Boxes
Special Laminated boxes which is a
requirement for direct shelve.
Other Packaging
As a part of Ex-Packs “go Green” concept,
Expack has developed products such as
wardrobe cartons, pallets, tea chest cartons,
tuna cartons and many more.
Task Two
2. Marketing Mix
2.1 Introduction of Selected Brand
I have selected Anchor Full Cream Milk Powder for my detailed analysis of
Marketing Mix applications.
2.2. Detailed Marketing Mix Elements of Anchor Full Cream Milk Powder
a) Product attributes
Table 2.1- Product attributes of Anchor Full Cream Milk Powder
Marketing
Mix Elements
Description Key Unique Feature
Variety 2 varieties, Anchor Full Cream Milk Powder
and Anchor Full Cream Milk Powder Instant.
Created TOP of the
mind awareness to
the customers.
Customer buys
Anchor for
maintain his status,
rather than buying
a local milk
powder.
Design Greenish New Zealand mountains with blue
background, it highlights about the nutritional
factor and the source.
Quality Always gives consistent quality, made with
World Health Organizations (WHO) and Food
and Agricultural Organizations Standards.
Features Highlights about the nutritional factors.
Brand Name Separate family name and it positioned in the
top of the mind of customers. Always
maintaining that “Anchor” word which in red,
an anchor symbol is top of it.
Packaging Immediate container with aluminum foil to
protect from the sunlight, moisture and other
external factors, and inner pack is covered by
an outer container, and outer pack is
informative.
Sizes Anchor Full Cream Milk is having 75g, 250g,
400g, and 1kg - and the Anchor Instant variant
has two pack sizes of 400g and 1kg
Services Gives warranty to its customers by giving 2
customer hotlines, Customer hotline numbers
are 0112488255 and fax no is 0112488017.
b) Price attributes
Table 2.2 - Price attributes of Anchor Full Cream Milk Powder
Marketing
Mix Elements
Description Key Unique Feature
List Price Retail prices
Anchor 75g - Rs. 58.00
Anchor 250g - Rs. 165.00
Anchor 400g - Rs. 325.00
Anchor 1Kg - Rs. 810.00
Anchor Instant 400g - Rs. 325.00
Anchor Instant 1Kg - Rs. 810.00
Maintaining a high price
& high quality strategy
when comparing with
its competitors.
Fonterra has introduced
“Rathi” full cream milk
powder as a fighter
brand to fight with
competitors, with a Sri
Lankan name, with
lesser price. While
Rathi full cream milk
powder fighting with
competitors, Anchor
Full Cream maintaining
its premium pricing
with its high quality.
Strategies Physiological pricing strategy, Price is
competitive but always maintaining a
premium price comparatively, to show
customers it’s high quality.
Discounts To the trade are starts with Rs. 18.00 per
case to maximum of Rs. 90.00 per case
for those buy 2 cases up to 15 cases.
special discounts given in modern trade.
Payment
Terms
Trade - Cash and cheque.
Distributor – Cheque
Credit Terms 7 to 10 days credit to distributor
4 to 10 days credit to the dealers
c) Place attributes
Table 2.3 - Place attributes of Anchor Full Cream Milk Powder
Marketing
Mix Elements
Description Key Unique Feature
Channels Detailed diagram of distribution channels
are given in figure 2.1.
They not cover entire
shops in Sri Lanka, but
due to the brand power
and consumer demand,
product reach almost all
potential outlets.
Coverage Approximately cover around 40,000 outlets
directly.
Locations Placed it in all possible outlets
Transportation Distributor/Direct Dealer has to provide
transportation for the goods to their
warehouses, Company paying an allowance
for that.
Figure 2.1 – Distribution Channels diagram of Anchor Full Cream Milk Powder.
Company
Distributors
Whole Sale Shops
Retail Shops
Customer
Direct Dealers Modern Trade
d) Promotion attributes
Table 2.4 - Promotion attributes of Anchor Full Cream Milk Powder
Marketing
Mix Elements
Description Key Unique Feature
Advertising Always promoting with the theme of
“Mothers endless love, to her child”.
Always targeting mothers
emotional relationships
with her child, also
highlighting nutrition
factors in their advertisings,
because Fonterra identified
that mothers are the major
decision makers, when
purchasing milk powders.
Personal
Selling
Shop to shop visit
Public
Relations
Special activities for mothers and
children.
Sales
Promotions
Promotions in modern trade, specially
“Best Buy” promotions in “Cargills Food
City”
2.3 Effective Marketing Mix of Anchor Full Cream Milk Powder
a) Matches customer needs
Anchor matches customer needs, always researching on consumer attitude changes, life
styles, sales promotion & advertising, with that Fonterra maintaining Anchor marketing
mix of Full Cream Milk Powder as per the customer needs.
b) Matches corporate resources
The marketing mix of Fonterra is always matches its corporate resources, Fonterra pre
plans the marketing mix with its corporate resources.
c) Creates competitive advantage
Anchor Full Cream Milk Powder having the competitive advantages with its marketing
mix. This is the reason for Anchor Full Cream Milk Powder’s success in Sri Lanka.
d) Well blended
Anchor Full Cream Milk Powder’s Marketing Mix is well blended with correct
percentage, which gives superior value for customers.
Task Three
3. Organizational buying behavior
3.1 Introduction of Selected Product
I have selected buying process of master case cartons, marketed by Expack Corrugated
Cartons (Pvt) Ltd, which required by Orient Lanka Confectionery (Pvt) Ltd (known as
OLCL), producers of “Maam Biscuits”. They purchase master cartons from Expack
Corrugated Cartons (Pvt) Ltd, to store their biscuit packets.
3.2 Detailed Analyses of Buying Decision Process of Slotted Case Cartons.
Table 3.1 - Detailed Analyses of Buying Decision Process of Slotted Case Cartons
Problem Recognition Expack found a problem in the Orient Lanka Confectionery
(Pvt) Ltd (OLCL), which is they need to store their new biscuit
named “Spicy Chicken”, they need a master case to store their
products, and initiator of this problem, is production General
Manager of OLCL.
General Needs
Description
OLCL’s general needs descriptions of cartons are
High Quality carton to store food products.
Maintenance of Consistent quality
Printing cartons as per OLCL’s design
Comparatively Low prices
Minimum of one month credit facility
Transportation provided
Environment friendly products
25000 quantities required for first month
Expack can provide above facility.
Product Specification Technical team OLCL expecting the following from the carton.
Dimensions are 365 mm length, 265 mm width and 225
mm height per carton.
3 flute material
45g weight per 100 square centimeters. (45g/100cm2).
Can load minimum of 55kgs above the stored single
carton.
Appropriate printing as per design.
Relatively easy model for users.
Expack decides that they can manufacture cartons as per the
OLCL’s product specifications.
Supplier Search Expack contacted the Initiator to describe about their cartons,
also they approached the influencer through contacts. Also
Expack e-mailed to the General Manager of OLCL about their
products, which they are giving to various manufacturing
companies in Sri Lanka.
Proposal Solicitation OLCL has invited selected 3 suppliers to produce a proposal for
the cartons, Expack also got an opportunity to give a proposal to
OLCL. Expack has designed a very well detailed brochure and
sent it to OLCL, after that OLCL has decided to invite Expack
to give a presentation about their cartons. Expack has special
team for presentation, they went to OLCL to give a presentation
to the decision makers and approvers of OLCL. Also Expack
has given samples to OLCL which matches appropriate
requirement of OLCL. Expack presentation team mainly
focused about quality, credit facility, transportation and on time
supply in their presentation.
Supplier Selection OLCL’s decision maker satisfied and decided to purchase
cartons from Expack, Expack had following competitive
advantage with comparing with its competitors.
50 days credit facility
Warranty on cartons, returns acceptable
Easily accessible geographical location
Past history and reputation with OLCL
Product quality
OLCL has signed an agreement with Expack to supply cartons.
Order routine
Specification
OLCL agreed to generate an order for every 30 days and Expack
agreed to supply the order within 15 days.
Performance Review
OLCL having monthly performance review meeting about their
raw material purchases.
Time to time Expack sends questionnaire to OLCL about their
service satisfaction level, user reviews, modifications required,
and consistent quality.
3.3 DMU’s of Selected B2B Buying Process.
Expack has identified the DMU’s of OLCL, in order to purchasing the cartons. They
are given in table 3.2.
Table 3.2 – DMU member of Selected Buying Center
DMU Unit Selected Buying Center Member
Initiator General Manager – Production
User Production Manager and Packaging Materiel Stores Executive
Influencer Quality Manager
Buyer Purchasing Executive
Decision Maker Director Operations
Approver Managing Director
Gate Keeper Receptionist
Task Four
4. Levels of Products
It is useful to marketers to think of a product as comprising of five levels.
Figure 4.1 – Levels of a product
4.1 Introduction of selected product
I have selected Anchor Full Cream Milk Powder to analyze the levels of a product.
Basic Product
Expected Product
Augmented Product
Potential Product
Core Product
4.2. Five levels of Anchor Full Cream Milk Powder.
a) Core Product
Core Product of Anchor Full Cream Milk Powder would be a mean of thirsty and
nutrition.
b) Basic Product
The basic product benefits of Anchor Full Cream Milk Powder as follows
Aluminum foiled inner pack, which is protecting from sunlight,
humidity/moisture, and contamination, which helps to keep the milk powder in
good condition for long period. Inner pack is certified for food grade. Outer
package is covering the inner pack from damaging and also it gives very
important details of the product such as weight, price, date of production, date of
repack, date of expiry, usage details, customer care details, nutrition level and
barcode.
Full of protein, vitamins and minerals to help keep kids active and healthy.
Anchor is an exclusive brand name of Fonterra, which is trusted by Sri Lankans.
c). Expected Product
The Expected product benefits are as follows
Nutritional values such as Vitamin’s, Milk Protein, Milk Fat, Carbohydrate,
Riboflavin, Folate, Vitamin B12, Calcium, Sodium and Potassium.
Consistent quality
Source is from New Zealand, which is very popular for pure and healthy milk.
Very good taste.
Social respectable status.
Various pack sizes - 75g, 250g, 400g, and 1kg.
d) Augmented Product
The Augmented product benefits of Anchor Full Milk Powder are as follows.
“Every Drop is Guaranteed” and “125 years of Proven Nutrition” are the
guarantees given to consumers.
Manufactured World Health Organizations standards, which gives additional
values to this product.
Giving more milk protein and more milk compare with other milk powders.
Agglomerated milk powder, which helps it to dissolve very well with water,
which enables to no lumps in milk.
e) Potential Product
The potential product levels to Anchor Milk Powder are given below.
Introducing a small milk bag for a single glass of milk, similar to that the tea bags
are in the market, which helps customers for individual consumption.
Creating a Facebook/Twitter clubs for the mothers, to give awareness.
Having CSR activities to the preschools.
Even though Sri Lanka is a small country, Can introduce geographical
segmentation, such as a special milk for the peoples of coolest part in Sri Lanka
and a special cool milk for the peoples of the hottest part in Sri Lanka.
Findings and Conclusion
I found that success of Anchor Full Cream Milk Powder in Sri Lanka is because of the
effective Marketing mix by Fonterra.
Understanding the organisational buying process is the vital part of the success of a
B2B organisation.
References
http://www.fonterra.com/
http://www.island.lk/2010/02/25/business6.html
http://anchorpediapro.com/
http://www.expack.lk
http://www.anchorinstitute.com
http://sundaytimes.lk/120101/BusinessTimes/bt17.html
Philip Kotler. Marketing Management, 12th
Edition
G.S. Sylvester. Preliminary Certificate in Marketing Recommended Study Text, Sri
Lanka Institute of Marketing
Presentation Slides of Mr. Bharatha Herath, PCM Lecturer, SLIM, Kandy.
Limitation
2000 words to the assignment body.
One month period to complete the assignment.