Marketing plan of a Dairy Company

8/10/2019 Marketing plan of a Dairy Company

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Raageshwari Eileen Palmer

517826 - Group 8

OPL Individual Plan Tutor: Mrs. Meijer Merel


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Table of Contents

1. EXECUTIVE SUMMARY ...................................................................................... 3

.

SITUATION ANALYSIS ....................................................................................... 4

2.1 CURRENT MARKETING SITUATION............................................................................................. 4

2.2 CURRENT MARKETING MIX...................................................................................................... 5

3. INTERNAL ENVIRONMENT ............................................................................... 6

3.1 MISSION &VISION.................................................................................................................... 6

3.2 ORGANIZATIONAL STRUCTURE.................................................................................................. 7

3.3 CORPORATE CULTURE............................................................................................................... 7

3.4 PRODUCT DESCRIPTION............................................................................................................. 8

3.5 PREVIOUS SALES...................................................................................................................... 9

3.6

MARKETS.............................................................................................................................. 10

3.7 DISTRIBUTION........................................................................................................................ 10

. EXTERNAL ENVIRONMENT .............................................................................. 11

4.1 DESTEP............................................................................................................................... 11

4.2 MARKETANALYSIS............................................................................................................... 15

4.3 CONSUMERANALYSIS............................................................................................................ 17

4.4 COMPETITIVE ENVIRONMENT................................................................................................. 18

5. SWOT ANALYSIS ............................................................................................... 22

5.1STRENGTHS............................................................................................................................. 22

5.2 WEAKNESSES........................................................................................................................ 22

5.3 OPPORTUNITIES..................................................................................................................... 23

5.4 THREATS............................................................................................................................... 23

6. MARKETING OBJECTIVES ............................................................................... 24

7. MARKETING STRATEGIES ............................................................................... 24

7.1 TARGET MARKETS................................................................................................................. 25

7.2 BRANDING............................................................................................................................. 25

7.3 PRODUCT POSITIONING........................................................................................................... 30

7.4

PRODUCT STRATEGIES........................................................................................................... 31

7.5 PRICING STRATEGIES............................................................................................................. 33

7.6 PROMOTION STRATEGIES........................................................................................................ 34

7.7 SUPPLY CHAIN STRATEGIES................................................................................................... 37

. IMPLEMENTATION .......................................................................................... 39

8.1 SALES FORECAST................................................................................................................... 39

8.2 ACTION PLAN........................................................................................................................ 41

8.3 BUDGET................................................................................................................................. 43

9.

MEASUREMENT AND CONTROL STRATEGIES ................................................. 43

9.1 RESEARCH............................................................................................................................. 43

9.2 TRENDANALYSIS.................................................................................................................. 43

10.BIBLIOGRAPHY ................................................................................................ 44


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1.Executive Summary

This reports was commissioned to examine a company, which was originated from

Belgium, called Dendermonde. Dendermonde produces several sorts of dairy desserts based on

natural ingredients. Dendermonde can be loosely described as a small-scale dairy dessertproducer that never took any risk or chance to develop to its full market potential.

Dendermonde had experienced severe internal problems and was on the verge of bankruptcy.

Fortunately, our consultancy firm has been hired to analyze the company and provide

Dendermonde with new objectives, implementation plans, and strategic approaches in order to

help the company recover from its downturn.

The result from Dendermondes company analysis draws attention to the fact that their

market share in 2012 was 2%, a number far less than its competitors. The shares of theircompetitors such as Friesland Campina and Danone were 16.6% and 8.4% respectively. Further

investigations revealed that this market shrinkage coincided due to insufficient investments to

be made in the company and new demands in the dairy market not being met by Dendermonde.

Due to the uprising demand for low fat and organic products in the dairy market, these product

types has showed to influence choices for most of dairy purchases. These factors appear to be

the major causes for Dendermondes low product sales and small market shares.

Our consultancy firm, Consult4u, have arranged the market penetration strategy by Ansoffto be used in guiding Dendermonde to regain its health and profitability. Dendermonde will

improve existing products and introduce it to its existing markets, which are mainly

supermarkets. Dendermonde will also re-launch the organic range of dairy dessert and add low

fat choices to their products. Dendermonde will continue the use of private label brands because

according to market research, private label brands are experiencing

rapid growth of sales due to the increasing consumer needs for

affordable goods. The report evaluates this decision and concludes that

it would be an ideal candidate to meet the challenge presented by the

market and could satisfy the new consumer demand.

It is recommended:

Dendermonde take immediate measures to launch and promote the new organic dairy

desserts alongside its existing product range.

Dendermonde focuses in supplying private label brands to leading Supermarkets/

Hypermarkets.

Dendermonde expands their product lines by including low fat choices for the dairy

desserts.


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1.

Situation Analysis

1.1

Current Marketing Situation

The Dendermonde Company was founded in 1949 in Belgium with the goal of creating

the tastiest dairy desserts using ancient farmer traditions and secret homemade recipes based

on natural ingredients. The company has expertise due to years of experience to create and

market products that will appeal in the dairy market. The key reasons that Dendermonde did

not reach its full market potential is as follows:

The lack of motivation and no clear strategies for enacting growth and value creation. The

company has not set clear marketing objectives, marketing mix, and does not have a

clearly defined target group. The CEO of Dendermonde also claims that he lacks the time

to analyze the external environment, therefore any market trends will not be recognized

by the company.

Due to a vacant managerial position, Dendermonde does not have a functional marketing

department. Mr. De Clercq, who is also the CEO of Dendermonde, is currently taking care

of all marketing activities happening in the company. Three people are responsible for

sales within Belgium and all other export activities, these two employees deal with no

actual marketing concerns, causing the marketing department to be inoperative. Massive

changes in the company need to be made because of the unorganized internal situation.

The Belgian market mainly knows Dendermonde dairy desserts under the private label

brand Pur Natur used for a Belgian supermarket chain. Dendermondes own labels are

poorly designed with no clear pictures available, which is the reason why the Pur Natur

brand excels over its own brand. The production of organic desserts, which were in high

demand in 2009, was halted due to production problems. This problem caused the loss of

a key customer, the Intermarche supermarket.

The company also shows some export potentials but no clear internal export strategy has

been set therefore causing only 5.5% of the companys products to be exported in 2012.

The contacts made for export activities also does not last long due to no customer

relationship efforts to be made by the marketing and sales department.

In conclusion to the current situation, Dendermonde has to rebuild its marketing

department in order for it to regain profit. A new marketing manager should be appointed to

manage the department. Moreover, customer relationship polices are needed in order to

retain customers and an effective marketing mix to be defined in order to expand the

products to its full market potential.


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2.2Current Marketing Mix

PRODUCT

The focus of Dendermonde is mainly on dairy desserts production. In Dendermondesproduction hall, most of the products produced for supermarkets are private labels. The

products that are being produced are different types of flavored yogurts and quarks.

Dendermonde had the chance to produce organic desserts for a Belgian supermarket called

Intermarche, but due to production problems, the organic desserts production were halted. The

most popular flavors for Dendermondes desserts are strawberry, apricot, yellow fruit, and

vanilla. The fruit fillings in the desserts can easily be changed therefore customers can choose

flavors that comply with their specifications.

PLACE

Dendermondes products are currently sold through supermarkets in Belgium such as

Prima, Spar, Spegelaere, Cora, Champion, and Delhaize. Moreover, the company distributes their

products through several independent retailers such as Draailing and Hoev. The company also

managed to distribute through international customers thus exporting their products.

Intermarche supermarkets used to be one of Dendermondes distribution channels until 2009

when productions of organic desserts were halted.

PRICE

The company has generated no clear pricing strategy.Dendermondesproducts are classed as

lower to middlesegment of dairy dessert products therefore the prices are generally lower than

competitors to attract consumers.

PROMOTION

Dendermonde has not attempted to promote their products to attract more customers; they

have not created any promotional campaigns or activities to increase their low brand awareness.

The limited effort in promotions is also shown through their poor product packaging, no clear

pictures or labels has been used to attract customers to buy their products.


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3.Internal Environment

3.1Mission& Vision

Mission

We have chosen to developDendermondesstrategic decisions and actions based

on the product-driven mission statement originally created by Dendermonde:

To develop, produce, and market a broad range of reliable, natural, and nutritous

dairy desserts that contributes to the well-being and vitality of life of customers and

to gurantee that all products are delivered to customers as soon as possible.

Vision

Dendermondes vision is the framework for the companys Roadmap and guides

every aspect of its business by describing what the company needs to accomplish

in order to achieve an operational, sustainable and quality growth. Therefore ourconsultancy group recommends Dendermonde to:

1) Be a highlyeffective, accurate, and fast-moving organization.

2) Nurture a network of customers and suppliers to create a mutual and enduring value.

3) Be a great company where people are inspired to be the best they can be.

4)

Bring to the world a portfolio of quality dairy dessertsthat anticipate and satisfy people's

desires and needs.

5) Be a responsible company that values sustainability.


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3.4 ProductDescription

Dendermonde produces 7 types of dairy desserts. They produce natural yoghurts, fruit

yoghurts and different types of quarks containing only natural ingredients. All the ingredients for

the products are acquired from local suppliers. Due to the freshness of the natural ingredients, the

product has to remain refrigerated during shipment and storage periodsbecause dairy products

can spoil quickly if it is not properly stored.The shelf life of fresh and natural dairy dessert

products does not last too long.

(EatByDate, 2012)

At present, the Dendermondes product line comes in 7 types of packaging. The product line

is currently Dendermondes only core product, though it is also used under a different private-

label brand name in some Belgian supermarkets. The present products come in several different

flavors. The most favorable flavors are strawberry, apricot, yellow fruit, and vanilla.

As a producer of dairy desserts, Dendermonde holds the International Food Standards (IFS)

certificate for its company. The certification ensures:

- Common standard with uniform evaluation systems.

-

Comparability and transparency throughout the entire supply.-

Reduction of costs and time for both suppliers and retailers.

The IFS certification allows Dendermonde as a supplier to be trusted by retailers. The

certification reassures current customers and potential customers to trust Dendermondes

quality. Dendermonde should hold this trust responsible by maintaining high quality and great

natural taste of its products.

Prices of Dendermondes current products:

From the table above, the Suggested Retail Price is the price that is suggested by

Dendermonde for its retailers. The Price to Distributor is the original price which Dendermonde

decided for its retailer. This means that Dendermonde receives revenue from the Price to

Types of Yogurt & Quarks Refrigerator Freezer

Natural 2-3 Weeks 1-2 Months

Low Fat 1-2 Weeks 1-2 Months

With Fruit Fillings 7-10 Days 1-2 Months

Drinkable (Yogurt) 7-10 Days 1-2 Months


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Distributor. (E.g. Dendermonde receives a 1.34 revenue for every purchase of the 500g yogurt

drink.)

At present, Dendermonde produces and manufactures its own dairy desserts. Dendermonde

should oversee the entire production process to ensure consistent quality of its unique product.

With this method of production, we can assume that the average variable costs for each product is

0.70. The annual fixed costs for supplies, management salaries, and professional services will be

as follows:

Assuming all sales of the products are approximately equal, there is an average contribution

margin of 0.30 per product. Based on this, to achieve break even this year, Dendermonde must

sell:

2,069,450 = 6,898,166units

0.30

Again, assuming equal sales of all products, the break-even point in Euros is 6,553,258.

3.5 Previous SalesSales of Dendermondes products have not grown extensively. In fact, some sales have also

decreased since 2009 in some key accounts such as Champion and Spar. Actual figure for 2012 are

shown in the table below:

Dendermonde Sales Performance

Employee Salaries 1, 545,600

Equipment and supplies 441,068

Expenses related to sales

(E.g. travel, etc.)

32,000

Advertising and other marketing

communications

50,782

Total Fixed Costs 2,069,450

Customers Turnover

(2012)

Turnover

changes

(2009-12)

Prima 200,000 0.0%

Spar 1,800,000 -0.3%

Spegelaere 400,000 -2.1%

Cora 1,000,000 2.0%

Champion 2,800,000 -4.0%

Delhaize 560,000 2.0%

Intermarche 350,000 1.0%

Independent

Retailers

3,200,000 6.8%

Exports 350,000 -

Total 10,660,000 -


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3.6Markets

The consumer market for Dendermondes products is made up of anyone that is

interested in an affordable, healthy, and sustainable lifestyle. About 70% of Belgian

consumers say they are interested in living a healthy lifestyle;although the number of thosewho actually work to achieve that goal is much smaller. Because of the trend towards a

healthier living grows both globally and domestically, sales for Dendermondes organic and

low fat are expected to expand and grow for some time.

Within the Belgium consumer market, Dendermonde targets middle class consumers

who believe in a healthy lifestyle. While these consumers are typically adults, there are also

a younger segment that seeks to be physically fit and that also patronizes sustainability.

3.7Distribution

Dendermonde currently distributes to supermarkets, independent retailers, and some

export customers. In order to reach its target market, Dendermonde will place a

distribution emphasis on large-scale supermarkets. The company began developing

channel relationships with these retailers through individual contacts by company

personnels.

The company handles large key accounts such as Spar and Champion supermarkets

directly. While total sales to these chains are fairly substantial, when considering the

numerous branches each supermarket has, the sales are very small with much room for

growth.


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4. External Environment

4.1 DESTEP

An analysis of Dendermondes home country, Belgium, will give an insight in

identifying Dendermondes opportunities and

threat. The external analysis of the

environment will also facilitate us in clarifying

and generating strategies in which

Dendermonde must use to fulfill their

objectives.

Demographics

Belgium is an advanced state in the European

Union with an estimated population of

10,444,268 people and a small population

growth rate of 0.061%. The birth rate in

Belgium is 11.7-births/1,000 populations and

a death rate of 9.2-deaths/1,000 populations.

The table shown below provides a

distribution of the Belgium population

according to their age groups and gender. Thedominating age groups arepeople that are 25-

54 years old making 40.6% of the total

population. The average age of the population is

42.6 years.

(Maps 2013)

(CIAFactbook, 2013)

The most populated city in Belgium is Brussels with

1,019,022 people, followed by Antwerp with 459,805

people. The urban population in Belgium is reported as

97.40 % of the total population, with an annual growth of0.8 %. This makes the remaining 2.60 % to be living in

rural areas.

Areas PopulationBrussels 1,138,854

Antwerp 502,604

Gent 231,493

Charleroi 200,132

Brugge 116,709

Namur 106,284

Leuven 92,892

Mons 91,277

Age Structure Percentage (%) Male Female

0-14 years 15.7 835,569 801,959

15-24 years 11.8 629,753 603,55025-54 years 40.6 2,145,075 2,100,014

55-64 years 13.2 681,946 695,188

65 years and over 18.7 819,684 1,131,520


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Since Dendermondes products are all dairy-based, the company will have to obtain a

large target group because typically all age, gender,or income groups can enjoy dairy-based

products.Although almost everyone can enjoy Dendermondes products, the products are not

targeted tosuit specificinfant requirements; therefore the target group will range from 5 65

years and over.

Economical Environment

Belgium has a GDP of 382.05 Billion, together with a purchasing power parity of

311.8billion, plus it has a GDP ranking of 18th among the 43 European countries. Its current

benchmark interest rate is 0.50%. Due to the global financial crisis, the economy of Belgium is

not looking so promising, but it can be seen to slowly recover, causing the GDP growth rate of 0.2

% and an inflation rate of -0.07 %.

Belgium is surviving the crisis quite

well, notably with a relatively good

unemployment performance of 8.1 %.

However, domestic demands in the

country are still weak.(BelgiumStatistics,

2013)

Belgium is among the most highly

industrialized countries in Europe. The

country mainly imports raw materials

in great quantity and processes them largely for export. Exports equal around two thirds of the

GDP, and about three-quarters of Belgium's foreign trade is within the European Union

countries.

Sociocultural Environment

In Belgium, the average household net-adjusted disposable income is 19,925 thousand a

year. But there is a considerable gap between the richest and poorest where the top 20% of the

population earns almost four times as much as the bottom 20%. The average net adjusted

disposable income of the top 20% of the population is an estimated34,876 a year, whereas the

bottom 20% live on an estimated 8,952 a year. The household final consumption expenditures

are approximately 256.1 Billion, with 13.5 % of it going to food and drinks

expenditures.(BelgianFederalGovernment, 2013)


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The Belgium population is a major dairy consumer therefore dairy plays a big role in

Belgians lives; they typically have milk for breakfast and fruit yogurts or quarks for snacks and

desserts. Health and wellbeing is also valued deeply amongst the Belgian population. Health and

wellness is shifting from being aniche to becoming a mainstream product segment. Belgian

consumers increasingly expect their local supermarkets/hypermarkets to offer ranges of organic

and natural products. Retailers have

responded to the growing demand by

launching a widening range of private label

products specifying in these areas.

Widening distribution and growing-health

awareness amongst the Belgian

populationwill support strong growth of

products labeled as organic and natural.

Technological Environment

Belgium is a well-developed and

technologically advanced country with relatively modern living standards.The country has highly

developed transportation networks and high-tech information and communication technologies

(ICT), this is very beneficial due to the modernized way of transactions in the business world.

People, businesses and public authorities in Belgium are relatively quick in adopting new

technologies. In the case of technological innovations in the manufacturing sectors, enterprises in

Belgium show a good performance. The technical innovation rate for enterprises in Belgium ranks

as one of the highest, with 48.2%.

Ecological Environment

The Belgian population is well known for their sustainability towards the ecological

environment. Their sustainability is shown through their purchases of organic products. In 2013

the total supermarket organic sales increased to their highest level in 9 months, indicating

Belgian consumers choosing to buy

organic products as a guarantee of

integrity. February sales increased 8.4%

versus January. Some independent

organic products suppliers have alsoreported an increase in sales of up to

20% over the past month.Belgians

concern for the environment is also

shown through their behavior of

purchasing domestic products. By

purchasing products that is

manufactured locally, less carbon

footprints will be emitted. Dendermonde

only buys from local suppliers; therefore Dendermonde has an advantage of showingsustainability in the environmental friendly Belgian dairy market.


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Political and Legal Environment

All companies, associations, institutions or establishments that originates in Belgium are

liable to pay for a corporate income tax. The corporate tax rate for Belgium in 2013 is shown in the

table below.Belgium also have a moderately high standard rate of Value Added Tax (VAT) of 21%,

this is the additional amount buyers has to pay when purchasing Dendermondes products

(WIPFLITax, 2013)

Since the milk quota regime was introduced, milk quota has become a scarce production

factor: on the one hand limiting milk production and, on the other hand, stabilising milk

producer prices and maintaining dairy activities in less competitive regions. An abolishment of

milk quotas is forecasted for 2015, but it is thought to increase milk supplies leading to a further

10% decline of milk prices.

During the milk quota establishment, dairy farmers have declined by 72% and dairy herd

decreased by40-45% in the EU. The EU milk quota system was originally introduced in 1984, in

order to limit public expenditure on the sector, to control milk production, and to stabilize milk

prices and the agricultural income of milk producers. (ConfederationFiscaleEuropeenne 2013)

In conclusion, the EU has its own ''protected'' market,

there is a huge subsidized overproduction of milk, quota's

have already been set for years, farmers who produce too

much milk get fined, so the farmers over producing milk has

to ditch their milk. The EU ditches the overproduction

because quota's are still way too high. Therefore, exporting neighbouring countries would just be

the same as any other country within the EU, and outside the EU the export costs would be too

high. This can also be seen as an opportunity to grow domestically within Belgium.

Band of taxable profit Rate applicable to band

0 25,000 24.98 %

25,001 90,000 31.93 %

90,001 322,500 35.54 %


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4.2Market Analysis

A thorough understanding of the dairy market is crucial for increasing the sales of

Dendermondes products. Fortunately, the dairy market is leading towards a more prosper

year in 2013 for Dendermondes kind of products.

Milk Market

The Belgian milk market has a total revenue of 4.6 billion in 2013, representing an annual

growth rate of 2.2%.Market consumption volumes increased with a growth rate of 0.8%. Due to

milk quotas, milk deliveries have decreased 0.9% compared to 2012.In the first months of

2013, the EU milk collection has been strongly

affected by the climatic conditions and the high

compound feed prices, leading to expectations that

the milk production will not increase and remain

constrained in 2013.

Although the value of the market has increased, the

potential threat in the market is the high and rising

milk prices due to limited supplies of milk. The high milk prices might affect production prices

of Dendermondes products but fortunately the demand for dairy products still remain

strong.(EuropaAgricultureMarket, 2013)

Yogurt Market

Total yogurt expenditures in 2013 have increased by 4.9 % to 1.6 billion compared to

November 2012. The average price per kg of yogurts has also increased by 7.6 % year-on-year to

2.81/ kg. This major incline in the yogurt sectors can open up more opportunities forDendermonde to increase sales.

The total yogurt market consists of Private Label and Branded products. Branded yogurts

make up about 70 % of total yogurt volumes sold. This year however, Branded products saw

volumes decline 7.1 % compared to 2012.Increasing purchases of private label yogurts is

thought to be the cause of the decline. The private label purchases have increased by a

tremendous 10.5 %. Therefore a definite increase invalue and sales are forecasted in 2013 forDendermondes private label yogurts.


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Total yogurt market in Europe, 2013

(DairyOrg 2013)

As for types of yogurt, natural yogurt has seen the largest volume growth over the year with

a staggering 16.8 %. Low fat yogurt has also seen large growths with volumes up 8.1 %. The

choices of yogurts are mostly influenced by yogurts that are labeled as Low Fat and All Natural.

The largest declines for yogurt types by far are the children yogurts, sales volumes decreased by

15.5 %. As for price levels, Low fat yogurts are the cheapest with 1.78/kg, while childrens

yogurt remained to be the highest with 3.18/kg. Yogurt drinks have also grown 4% from 2012,

with over 1 in 3 households purchasing yogurt drinks over the year.

Total yogurt market by product type in Europe, 2013

(DairyOrg 2013)

Value

(000s)1,362,066 +4.9 303,093 +15.0 1,058,973 +2.3

Volume

(000kg)574,720 -2.6 167,915 +10.5 406,805 -7.1

Average

Price (/kg)2.37 +7.6 1.81 +4.0 2.60 +10.1

Total yogurt

Year-on-year

(%)

Private

Label

Year-on-year

(%) Branded

Year-on-year

(%)

Product type Spend

(000s)

Year-on-year

(%)

Volume

(000Kg)

Year-on-year

(%)

Average Price

(/kg)

Year-on-year

(%)

Organic / Bio

set414,333 -0.1 156,747 -6.3 2.64 +6.7

Childrens

Yogurt30,111 -4.2 9,454 -15.5 3.18 +13.4

Low Fat 2.37 +7.6 92,266 +8.1 1.78 +3.2

Natural 99,916 +21.0 53,919 +16.8 1.85 +3.6

Very Low Fat 298,042 +9.1 125,435 -3.3 2.38 +12.9


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Quark Market

Quark has the potential to be the next on-trend, high-protein indulging health food. Global

sales of quark reached0.3 billion in 2012, up by 20% in current terms from 2007. Major players

in the dairy industry have been introducing quarks to consumers, the consumers responded

positively towards the high-protein dessert. Consumers now perceive quarks a normal dairy

dessert that is highly enjoyed just like yogurt. (EuroMonitorInternational 2011)

Belgian consumers love Quark. Belgians describe the dessert as a mild creamy product

without the sour taste of yogurt. Health conscious consumers keep on eating Quark due to the

low fat content and high protein. The nutritional content of Quark is hard to surpass, only a few

products offer such high protein content and versatility as Quark.

4.3 Consumer Analysis

As our target market consist of age groups from 5 65 years old, we have clustered them into

different groups to analyze and identify Dendermondescustomers:

1. Young Adults

Characteristics: Enjoys social and physical activities

Shops in supermarkets and convenience stores

Self-conscious and spends moderate amount of

money on physical appearance.

Up to date with latest trends in technologies.

Point of recognition:

Attends higher education level

Have part-time or full-time jobs

Broad range of friends Aged between 16 29 years old

2. Adults

Characteristics:

Enjoys social activities such as going to bars,

restaurant, or staying in with friends for a

homemade meal

Shops their groceries in supermarkets or

hypermarkets

Have stable families and saving

Conservative and price sensitive


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Solid social relationships

Medium income range

Lives in suburban areas

Aged between 30 55 years old

3. Elderly:

Characteristics:

Health conscious

Enjoys eating healthy meals and doing mild

physical activities, e.g. jogging.

Shops in farmers markets and

supermarkets

Spends allowances conservatively

Price sensitive


Retired

Solid social relationship

Family orientated

Active in physical and social activities

Aged between 56 65 years old

4. Children:

Characteristics:

High brand loyalty

Enjoys colorful packaging

Surrounded by families and enjoys social

activities

Dependent on families


Low education level

Family orientated

Depends on parents for purchasing decisions, no income.

Aged between 5-15 years old


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4.4 Competitive Environment

The dairy market is known for its competitiveness. In order for Dendermonde to survive, the

company must analyze its competitors positions in the marketplace. To develop an effective

positioning strategy to influence the target groups perceptions of Dendermondes products,

Dendermonde must understand the current situation in the same market by comparing itself toits competition. Branded dairy desserts are Dendermondes main threat because Dendermonde

produces mostly for private labels. It is very important to distinct a competitive advantage

between branded and private label products.

Dendermondes direct competitors are companies that also market dairy dessert type products,

including the following:

FrieslandCampina

FrieslandCampina is a leading player in the Belgian dairy market. They account for 16.6 %

market share in the dairy desserts industry. The company claimed to have a revenue of 10.3

billion euros in 2012 and as many as 1 billion consumers worldwide. Their profit increased by

26.9% from 2011 to 2012, making it 274 million Euros. The company values high quality

products, sustainability, and transparency standards throughout the whole chain. They develop

their dairy products based on essential nutrients needed by

consumers, hence ensuring to meet customer needs.

FrieslandCampina produces a diverse range of dairy desserts. Some

of their core products in Belgium include: Campina, ViFit, andFristi.

Campina FreshYo:

Campina FreshYo by FrieslandCampina is a fruit flavored yogurt

drink that was popularized in Belgium. FrieslandCampina priced their

yogurt drinks at 2.71 per liter. The product comes in 4 flavors;

strawberry, tropical fruits, banana and kiwi, and wild berries.

Fristi:

Fristi is another yogurt drink by FrieslandCampina that is

targeted amongst the younger segment group. The product

contains less yogurt compared to FreshYo, the product also

mentions Less Sugar in the packaging to emphasize the products

health appearance. The product uses a creative method of

packaging to attract its young target group. The product retails at

2.92 per liter. The product comes in 2 flavors; red fruit and peach.


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ViFit:

Vifit is a FrieslandCampina product that is specifically created for health conscious

consumers. The product contains 0% fat and contains important vitamins such as B11, B12, and

Vitamin D. The product retails at 2.95 per liter.

Danone

Danone is the market leader in the field of nutrition and health, positioning itself around

four specialties: fresh dairy products, water, baby food, and clinical nutrition. Danone, like

FrieslandCampina, is also a major player in the dairy dessert market. They account for 8.4 % of

the dairy market. The company values corporate transparency, sustainability, innovativeness,

and quality. Most of the Danone products in Belgium are

healthy brands because health concerned consumers inBelgium. In 2011 the company achieved a turnover of 19

billion. Some of their core dairy dessert products in Belgium

include: Activia, Danio,

Activia:

Activia is a yogurt range by Danone specified for health

conscious consumers. The product is mainly labeled as a natural

and organic diet range that promotes consumers metabolism.Activia yogurt retails at 3.17 per liter. The product contains 0%

fat and comes in strawberry, fig, natural, fiber grains, peach,

granola, and apple flavors.

Danio:

Danio is a dairy dessert range from Danone that consists both quark

and yogurt. The range varies from low fat to full cream. The products also come

in various interesting flavors ranging from strawberry

cheesecake, vanilla, chocolate, and blueberry cheesecake to

different flavors of fruits. The product retails at 3.40 per liter.

Danone Nature:

Danone Nature is the companys product line for organic

yogurt and quark. The product ranges from low fat to full fat. This

particular product only comes in plain/natural. The Danone Nature

retails for 3.00 per liter.


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De Zuivelhoeve

De Zuivelhoeve is a dairy producing company originated from The Netherlands.De

Zuivelhoeve provides dairy products at areasonably high price and but with assurance of high

standards in quality. The company dates back to 1981, producing original farm-made dairy

products such as milk, yogurt, and cheese. This particular company

values a traditional brand image, which means they stick with

producing traditional dairy products, made from traditional and

original natural recipes. This company will not be following market

trends such as making their dairy 0% Fat or Organic, the

company will stick to the traditionalism of their products.

The Real Zuivelhoeve BoernYogurt

This particular type of yogurt product is famous in Belgium

amongst the elderly target group where they prefer the

traditional and natural taste. The name of this particular

product indicates that it is the real Zuivelhoeve farm yogurt.

The product comes in only full cream and contains natural or

fruit fillings flavors. This product retails for 3.74 per liter.

Dendermondes indirect competitors in the market arecompanies that don't necessarily sell

the same products as Dendermonde but offer different alternatives to satisfy the same customer

need. As a result, even though these companies might not be directly competing with each other

in the same dairy dessert industry, they still may impact each other. Indirect competition comes

from the following companies:

Vache Bleue S.A.

Vache Bleue S.A. packs, sells, and distributes cheese products in Belgium. The company was

founded in 1927 and is based in Lillois Witterzee, Belgium. The company accounts for 7.4 % of

the total dairy market. This particular company is the major player of cheese products in

Belgium. The Vache Bleue range includes products that combine healthiness with pleasure. Thecompany values creativity, therefore the products are designed to be

unexpected and creative such as the Selection Cuisineline of spiced grated

cheeses, it claims to add spices of creativity to all cooking recipes.

Combining the culinary market with the dairy market

emphasizes that Vache Bleue is exploring new needs in

the dairy market and fulfilling those needs. They

also have lactose free product range for lactose

intolerance consumers, another example of how

Vache Bleue is meeting new consumer needs inthe dairy market.


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Bel Group

Bel Group is a company originated from France, and is

well known in Belgium. With five universal core brands and

over 25 local brands, the Bel Group serves up to nearly

400 million consumers annually in 120 countries around the

globe.

The company claimed that this is derived from the pleasure of eating

food made with dairy goodness, and Bel Group's commitment to

encouraging good eating habits and good-naturedness, form the common

thread between the Group and its brands.The company reached a market

share of 4.4% in the Belgium dairy market. The company claimed that

the strategy of its success is to have a well-known knowledge of the market presence before

extending their products; this can explain why Bel Groups cheese products , especially the

Laughing Cow product line, are so well known to consumers. A thorough research of the

market ensures the company of real consumer needs and wants.


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5 SWOT Analysis

5.1 Strengths

S1: Dendermonde uses supplies from local farmers. The usage of local supplies reduces the

emission of carbon footprint, benefiting both the company with its eco-efficiency. A sustainable

company is proven to have enhanced brand and increase competitive advantage.

S2: Dendermonde specializes in flexibility of production, which means it is able to produce

products that comply with the business customers own specifications.

S3: Dendermondes desserts are loved by customers and admired by competitors in the samemarket. Years of being in the dairy business explain their substantial experience in that specific

sector and enable them to produce the leading brands in the affordable dairy product sector.

S4: Customer relationship and creative approach towards preparation of products is considered to

be of great importance according to Dendermonde. The company has maintained a long

STRENGHTS (S)

S1:

A sustainable company.

S2:

Specializes in flexibility of

production.

S3:

Leading Brand.

S4:

Customer relations and creative

approach towards preparations

of products.

OPPORTUNITIES (O)

O1:

Rapid growth of demands for

natural and organic products.

O2:

High demands for private label

brands of dairy products.

O3:

Increasing consumer needs of

low-fat products due to health

awareness.

WEAKNESSES (W)

W1:

No clear company objectives,

strategies, and goals.

W2:

No Manager to control the

employees, thus lack of

organizational structure.

W3:

Lack of action in the marketing

department.

THREATS (T)

T1:

High and rising milk prices.

T2:

Competitive dairy market.

T3:

EU milk quotas.


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relationship with its current customers. The company is always looking for innovation with

regards to customers requirements in relation with producing their products.

5.2Weaknesses

W1: No clear strategies, objectives, visions and goals. Not having goals or objectives is a problem

for employees, since there is no clear picture in their head of what the company strives for.

W2: There is no clear structure among employees, managers and or owners. There is no hierarchy,

which makes it hard to control employees. All the employees are responsible for their own tasks;

the absence of a marketing manager resulted to a lack of control over employees.

W3: Since the absence of a marketing manager, there are no marketing activities conducted by the

company. They lack a review of the external environment and they ignore promotional activities

that can enhance brand awareness.

5.3Opportunities

O1: Data shows that the demands for organic and natural dairy desserts has been increasing in the

European market; consumers have increased their health-awareness and consumers have been

purchasing goods that are healthy for them and the environment.

O2:Private label yogurts have also been increasing in volume growth of 10.5%. This is an

advantage for Dendermondes current private label products sold in supermarkets causing it to

experience sales increases.

03: Low fat dairy products have also seen strong growth, with volumes up 8.1 %. This is expecteddue to consumers opting for healthier options. This gives Dendermonde the opportunity to expand

their product range.

5.4Threats

T1: A potential threat could approach Dendermonde due to the high and rising price of milk. The

increase in price will affect production costs in the company. The rising prices are due to the fact

that there is limited supply of milk available in 2013.

T2: The dairy dessert market is also very competitive due to the numerous competition (e.g.

Friesland Campina, Danone, etc.) dominating the dairy market. The tough competition serves as a

threat for Dendermonde and pushing Dendermonde to create competitive advantages in order of

surviving in the dairy market.

T3: Due to the milk quota establishment, dairy farmers have declined by 72% and dairy herd

decreased by 40-45%. The EU milk quota system was originally introducedin order to limit

public expenditure on the sector, to control milk production, and to stabilize milk prices and the

agricultural income of milk producers. The milk quota can limit Dendermondes exportopprtunities to neigbouring countries, but can increase domestic connections due to high milk

demands and low supplies.


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6 Marketing Objectives

7 Marketing Strategies

In Order to expand to Dendermondes full potential in the dairy market, Consult4u have

arranged market penetration strategy by Ansoff. This means that Dendermonde will focus in

selling existing products in existing markets. Although we will be adding two new product lines,

this product line will continue to represent the originality of Dendermondes products, the onlydifference is its benefits, we will include both organic and low fat benefits.

Dendermondeseeks to achieve four main GOALS:

1) Maintain or increase the market share of current products this can

be achieved by a combination of competitive pricing strategies,

advertising, and sales promotion.

2) Secures a dominant growth in the domestic Belgian market.

3) Restructures a mature market by driving out competitors,which

would require a much more aggressive promotional campaign,

supported by a pricing strategy designed to make the market

unattractive for competitors.

4) Increases usage by existing target markets.

Category Objectives

Financial

Increase organization-wide sales of 10% by end of calendaryear.

Market Share Increase market shares of current products within existing

dairy markets by 0.2% within the end of calendar year.

Product Generate sales of new organic and low fat products to 15 %

of total sales within one year.

Brand Increase brand awareness in the dairy market by 10% within

one year.

Customer

Relationship

Improve relationship with business customers to increase 3

new distribution channels by end of calendar year.


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7.1Target Markets

The targeting strategy that is suitable for Dendermonde is the undifferentiated targeting

strategy, which is targeting a broad spectrum of people that share a common interest of frequent

dairy dessert consumptions. We have identified that the needs of Dendermondes target

consumers are similar therefore by choosing this

strategy the message will appeal to all out target

consumers. The primary consumer target market

for Dendermondes products can be summarized as

follows:

Demographics:

- Ages: 5 65

- Male and female

- Household income: 15,000 and above

- Household type: Single & families with children.

- Education of head household: College degree or above

Psychographics:

-

Health-conscious and interested in living healthy lifestyles

- Believes in value for money and pays attention with what they are buying.

- Favors natural simplicity products over complexity

- Conscious with sustainability and the local community

- Price sensitive

- Spends time in evaluating alternatives before making purchases

Geographic

-

Individuals in the target groups

are likely to be located in

suburban areasinstead of big

crowded cities. This is because

they strive to live in larger and

open spaces to conduct their

healthy lifestyle activities.


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Demographics

Below is a demographic analysis of the population in Belgium; this can give us an insight on the

feasibility of the number of our target group that makes up the entire Belgium population.

- Total population = 10,444,268

- Age 5 65 years = 7,937,643

The figure above showed that 76% from the total Belgian population consists of the age

brackets of 5 65 years. This amount shows that we have better chances of optimizing our sales

volume due to the numerous targeted populations.

When looking at the information about income distribution in Belgium, we want to keep in

mind that demographic characteristics usually play their role in the income that will be paid.

According to the latest Annual Survey of Hours and Earnings, age plays an important role in the

gross income you should expect.The age group with the highest income is the 40-49 years old

group, where the median of the gross weekly earnings was at541.7. The median of the 22-29

years old group was 409.

With these report we can clearly position our product price according to the income earnings

of our target group. Dendermondes products should be fixed with an inexpensive price since they

are not creating a luxurious image; theyre products are valued as healthy, affordable, and natural.

Psychographics

To analyze the target groups lifestyle, we wentfurther into dividing Dendermondes target

group according to their psychographic characteristics. This implies that they can be grouped

according to the following:

Social Class: The social class of our target group is basically families consisting of a working

class parent and their children. Most parents in this class are skilled, middle, and lower

working class categories. They spend time in shopping for products with health benefits andare easily driven by the distinctive quality of the product they want to purchase.

Lifestyle Factor:We believe that Dendermondes target groups are Reformers. Reformers are

groups of people that believes in freedom from restriction, induces personal growth, value for

time, tolerance of complexity, anti-materialistic but intolerant of bad taste. These type of

people are very curious and supports the growth of new product categories. As for brand

choices, they favor natural simplicity and select brands for intrinsic quality at a reasonable

price.


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Geographic

Suburban areas are the typical choice for our target group because they favor simplistic

suburban lives over the busy and complex metropolitan areas. We will choose the most

populated suburban areas to centralize our marketing activities in order of reaching

Dendermondes target groups. The capital region of Belgium, Brussels, is the most populated

region with1,138,854 inhabitants. Dendermonde can target popular areasshown in the table

below.

As we can see from the above, we would start from the most populated region, Brussels, and

then proceed downward as shown in the table above. We plan to cover other remote counties in

the Belgium as we make progress in our research on various geographical regions across Belgium.

Cities shown in the table have a large number of stores, the cities also have vast numbers of our

target group and so we will be anticipating a high sales margin.

Main Target Group:

From the list above we can easily say that the age group between 35-50 years scored

highest compared to the other groups. Therefore, adults within the age of 35 50 years old are

Dendermondes main target group.This target audience makes up approximately 2.1 million of

the current Belgian population.

Areas Population

Brussels 1,138,854

Antwerp 502,604

Gent 231,493

Charleroi 200,132

Brugge 116,709

Namur 106,284

Leuven 92,892

Mons 91,277

Age

5-12 years 35-50years

Educational level: Low High

Brand awareness: Low High

Quality demand: High High

Brand loyalty: High Average/ High

Potential market: High High


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We believe that these target audiences values the high importance of healthy nutrition

and quality. High quality is thetarget groups first inspection element in persuading buying

behavior.Dendermondes target audience feels responsible for the environment and tolerates

the use of product containing chemicals. Overall, this target group is searching for goods that

meet the standards of health and sustainability.

This type of target group is generally also concerned with their health and personal

appearance. These consumers prefer purchasing products with less fat content. This is the

reason why Dendermondeis including choices of Low Fat to their product range. The

availability of the low fat product ranges will increase the chance of purchases from this type of

target group.

When it comes to purchasing, Dendermondescustomer are very price sensitive. This is

due to the value for money mind set orientation. When comparing two similar products,

Dendermonde consumer will go for cheaper brand alternatives that promote sustainability;

they will also choosecheaper unknown products that offer the same value as branded products.

This consumer group does not necessarily think that expensive branded products would

bebetter and of higher quality than the cheaper ones. This consumer group feels satisfied when

purchasing products with numerous beneficial values at a reasonable price.

Dendermondes products will be desired as an affordable product that still provides

health and sustain benefits to its target consumer.The target audience also wants to experience

a new sensation of natural taste. In the advertisings, we will accentuate Dendermondes use of

ancient farmers traditions and secret homemade recipes in creating their tasty dairy desserts,

to promote the products sensation of natural taste, made by only natural ingredients producedby local farmers.

The motive to buy Dendermondesproduct is shown in the fact that there are only several

dairy dessert producers who are offering organic dairy desserts to consumers. Dendermondes

target audience does not want to taste chemicallyinduced dairy products due to their health

awarenesss. Dendermonde will offer consumers realingredients in their desserts. The organic

dairy desserts will be renowned for its purity, clean taste, and natural flavors.

Subsidiary Target Group:

From the list above we can see that the age group between 5-12 years scored lowest

compared to the other groups. Therefore, children within the age of 5-12 years old are

Dendermondes subsidiary target group. This target audience makes up approximately 820

thousand of the current Belgian population.

Another reason why children group scoredlower is because we cannot judge the children

market by how much money they have or how highly educated they are. Dendermonde has a

product specifically designed for children. The packaging is designed to be creative to attract

child consumers. The children market are interested in great taste and colorful appearance.Dendermonde can attract more children markets by improving its product through designing

in more colorful packages for this particular market.


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We can also see this group as a stepping-stone in order for Dendermonde to penetrate

their first target group, adults. To some extent , children s needs can directly inluence their

parent s purchasing behavior . Most of the population in the first target group is considered to

bea household consisting of parents and their children therefore children plays an important

role for reaching our first target group.

Business as a Target Audience:

As a second target group, we have identified thebusiness-to-businesscustomers, which

are Dendermondes retailers, namely supermarkets/ hypermarkets, and independent retailers.

It is very important to choose the retailerswisely because they areactive participantsthat

influence the perception ofend consumers towards Dendermondes products.

Dendermonde needs to establish a long-term and well communicating relationship with

their business partners. To attract and to maintain good relations with business customers we

will make use of a variation of promotional tools, such as improving discount policies, which

will be explained in the promotional strategies.

7.2 Branding

Dendermondes brand is the companys promise to its customer. It tells them what they can

expect from the products and it differentiates Dendermondes offering from its competitionsoffering. Since the brand is derived from how Dendermonde is perceived, we would suggest

Dendermonde to make their products to be

perceived as a low-cost and high value brand that

delivers sustain and health benefits to its target

customers.

Logo

To enhance the image of natural goodness, health,

and sustainability, Dendermondes productswill

have a new logo design that will remind target

customers of nature, hence the green leaf above the logo. The color green in logo can

emphasize nature and serenity. The color green in logo reminds customers of nature, the idea

of nature relates the product to natural and healthy goodness.


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7.3 Product Positioning

Product positioning is the perception in the consumers mind of the nature of a company

and its products relative to competitors. We recommendDendermonde to use the product

attribute approach. The fact that their dairy desserts uses natural ingredients from local

farmers are features that sets the product apart from the competition.

There are three components making up attitudes and behaviour towards products, these

components are Cognitive, Affective, and Conative. The cognitive component is made up of the

consumers understanding, image and knowledge of the product. In the case of Dendermondes

dairy desserts, the consumer will learn or know that the products are natural and sustainable,

which is very beneficial for ones health and environment. Secondly, the affective component

occurs, which is the feelings and emotions the consumer develops towards the product: a

person may feel or believe that he or she will be more healthy when Dendermondes dairy

desserts. Thirdly, the conative element takes place because of the consumers actions and

behaviour, which lead to the purchase of Dendermondes dairy desserts.

Perceptual Map

UPSCALE

LOW PRICE HIGH PRICE

DOWNSCALE

Perceptual Map Summary

From the map we can deduce that Danone is right within the high priceandupscaleposition, which means consumers view theirproducts as high quality being

purchased at a premium price. Other competitors like FrieslandCampina, Bel Group, and Vache


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Bleue also fall within this range. Danone has an average of higher prices and quality products

when compared to other competitors.

De Zuivelhoeve has a relativelyaffordable range of dairy products and optimal standards

for quality therefore this company placed within the downscale and low-priced segment. We can

see that the column for low price upscale dairy products is blank because consumers will not

buy a premium dairy product at a low price. It is either they go for a downscaleproduct at a low

price or buy an upscaledairy product at a high price.

Unique selling point

Dendermondes product has a truly unique feature that sets itself apart in the market. It

offers an affordable alternative with the same healthy benefits as other expensive premium

products. The natural recipes and fresh local ingredients really stand out to consumers looking

for affordable products with health and sustainable values.

Positioning Statement

For the middle-Belgian consumers seeking for sustainable and healthy dairy desserts,

Dendermondes brand provides an affordable and satisfying choice.

7.4 Product Strategies

Three Layers of Products

Core Product

The benefit that Dendermondes products will provide customers is its affordable

health and sustainable benefits. The use of natural ingredients and supplies from local

farmers ensures the well being of both the customer and the environment.

Dendermonde serves dairy desserts with quality tailored for customers needs.

Actual Product

Dendermondes dairy desserts come in 7 delicious flavors; Strawberry, yellow fruit,

apricot, peach, blueberries, mix berries, and vanilla. The product comes in three types

of product line, which are Dendermonde Original, Dendermonde Organic,

andDendermonde Low Fat.

Augmented Product

The augmented part of Dendermondes products is the fact that the product has

accessibility. Dendermondes products are sold in supermarkets and independent

retailers that are very accessible for target consumers.


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New Product Lines

To increase its leverage in the market and to meet its sales objectives, Dendermonde needs

additional products. Two new product lines are planned:

1. Dendermonde Organic:

This new product line will be introduced to

the market to meet the high consumer

demands for organic products. This product

contains organic and natural ingredients to

satisfy the taste buds of Dendermondes

health-conscious consumers. The product

comes in six unique flavors:

- Apricot

-

Yellow fruit

- Strawberry

- Vanilla

- Mixed Berries

- Peach

2. Dendermonde Low Fat:

This product line is specifically designed for

the self-conscious consumers opting for ahealthy alternative. The Dendermonde Low

Fat dairy desserts will have approximately

75% less fat than the original dairy desserts.

The low fat range will come in the following

four flavors:

- Strawberry

- Blueberry

-

Peach- Vanilla


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Packaging

We believe that the product packaging can play a role in the success or failure of the sales of the

product; the purpose of packaging is much more than just containing and protecting the products,

how a product is packaged may be what attracts the customers to take a look on the products as it

sits in retail shelves. Dendermonde will need to emphasize the design of simplicity and nature in

its packaging. The label All Natural and Local Farmers will be attached in the packaging to

increase the healthy appearance of the products. The organic product lines will include the label

Organic and the low fat products will include Low Fat labels in the packaging to differentiate

them from the original packaging. The packaging will include the nutritional value, ingredient

contents, company website, and customer service number.

Private Label Brands

Dendermonde will continue producing for its current private label products in order of

complying with the sales objectives. Dendermonde will include three additional private label

brands, namely:

Pur Natur

During 2009, Dendermonde was producing organic desserts for the Pur Naturprivate label

but due to a production halt, the production has to stop. The re-launch of the organic product

range will enable Dendermonde to produce for this private label again.

Albert Heijn

Dendermonde will start producing desserts for the house brand of the supermarket called

Albert Heijn. The original dairy dessert products will fall under the label AH Huismerk/ HouseBrand. The organic and low fat product range will fall under the AH Puur&Eerlijk brand which

are the private labels consisting of organic and environmentally beneficial products.

Carrefour

Dendermonde will be producing for the house brand of the supermarket Carrefour. The house

brand will include all of the three product ranges, the original, organic, and low fat.


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7.5 Pricing Strategies

The pricing for Dendermondes productswill be decided based onthe market orientation.

This type of strategy would be getting a price based upon analysis and research compiled from

the target market. This means that Dendermonde will set prices depending on the results from

the market research. For instance if the competitors are pricing their products at a lower price,

then Dendermonde should put a price below the price of the competitors to attract more

consumers.According to Porters generic strategies, Dendermondes products would fall under

the cost leadership model, which means the company delivers a good quality product at a lower

price than the competitors. Another way of positioning Dendermondes pricing would be a

penetrated pricing, which means Dendermondes products will be the low-priced within the

market but offers a great deal of value.The current prices for Dendermondes products are as

follows:

(Table 7.5 A - Price List)

Competitors Price:

Dendermondes prices are going to be lower than its competitors. This is part of the pricing

strategy to create a competitive advantage in order for consumers to opt for Dendermondes

products. The price list for Dendermondes competitors are shown in the table below:

Types of Product Price (Per KG)

Danone Activia 3.17

Danone Danio 3.40

Danone Nature 3.00

Campina FreshYo 2.71

Campina Fristi 2.92

Campina ViFit 2.95De Zuivelhoeve Boer'nYogurt 3.74


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7.6 Promotion Strategies

In the past, Dendermonde has used mainly personal selling to promote its products to the

distribution channels. We will continue using personal selling to increase the Dendermondes

distribution channels in order to generate more sales. The personal selling has previously been

handled directly by Dendermondes sales team to the retailers; this is called a point-of-sale

merchandising.

Point-of-sale merchandising can be said to be a specialist form of personal selling. This type

of merchandising involves face-to-face contact between Dendermondes sales representatives

and the retail trade. Dendermondes sales representative will visit a range of suitable retail

premises in the target area and encourage the retailer to stock products from the product

range. The visit also provides the opportunity for Dendermonde to check on stock levels and to

check whether the product is being displayed optimally.

To support this personal selling approach, we came recommend that Dendermonde promote

itself through internet marketing in order to introduce its new product lines and meet its

marketing objectives of boosting the companys awareness.

Internet Marketing:

Internet Marketing can provide significant benefits to an organization by providing a reach,

range, and scale that before the Internet was invented it was not possible. The convergence of

technology has also driven an increase in the number of devices organizations can leverage to

reach their target market.

Website

Firstly, a proper company website for Dendermonde will be created. The first and most

obvious advantage of a business website is the potential for reaching a wider audience. The

Internet is used by millions of people and all of them are looking for something. So taking the

business online will potentially allow Dendermonde to take advantage of the growth and expand

its business. Even if Dendermonde has no intention of using a business website to sell,

Dendermonde still might want to let their customers know about their business. People

commonly research businesses online before actually visiting the business location. So having a

well designed website will help encourage them to come and visit Dendermonde or be able to

find out about the company.

Dendermondes website needs to be well structured in order for customer to

beprovidedwith necessary information about the company. Also, there will be a catalogue of the

product range in the website. For business customers there will be an option of ordering

products in the website and detailed contact information of the sales department (telephone, e-

mail and address). The website will be available inFrench, Dutch, German, and English. The

website URL iswww.Dendermonde.com.
http://www.dendermonde.com/http://www.dendermonde.com/


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Cost of creating a website:

- Domain Name = 10

- Hosting = 150

- Web Design = 2000.

- Website Maintenance - = 500 per year.

Total Cost for Website = 2160 (Plus 500 per year for maintenances.)

Social Media

Facebook and Twitter are the social media platforms most commonly used

for marketing. Facebook offers the option of creating a fan page for a company or

product, while Twitter makes use of a limitation of 140-character posts that users

follow. Blogs are online journals written by users, which can be influential in

spreading news and information. YouTube is a repository for podcasts and

videos, with a viewership of millions around the globe. Some sites offer display

advertising options, but the majority are simply a method of sharing information with others.

The most visible advantage of social media advertising is that it is very cost-effective, some sites

such, as Facebook, Twitter, and YouTube, are free of charge.

Dendermonde will create a Facebook, LinkedIn,

Twitter, and YouTube company account in order to

easily communicate with their consumers.

Dendermonde can introduce the new product lines and post the advertising and news about the

product in the social media networks, making consumers aware of it anywhere and at any time.

E-Mail Marketing

To stay constantly in the memories of our customers , Dendermondes sales team will be

sending promotional information to customers through emails with the purpose of enhancing

Dendermondes relationship and to encourage customer loyalty. In the e-mails, the sales teamwill inform our customers about new insights, promotions, and developments within

Dendermonde. The main tasks of e-mail marketing for Dendermondes sales team are:

To send email messages with the purpose of enhancing the relationship of

Dendermondewith its current and previous customers, as well as encouraging customerloyalty and repeat business.

Sending email messages with the purpose of acquiring new customers and convincing

current customers to make purchases of Dendermondes products.

Adding advertisements and newsletters to e-mails and sending it directly to customers.

Sampling:

Dendermonde can introduce its new product

range by sampling. The purpose of a free sample is

to acquaint the consumer with a new product. It is

similar to the concept of a test drive, where the


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customer is able to try out a product before purchasing it. Sampling of Dendermondes products

at selected supermarkets will provide an opportunity for prospective customers to become

aware of the product and to taste the great flavors. Sampling will include only organic and low

fat products, which are products that are being introduced. Venues for sampling will be in

supermarket where Dendermonde uses its own brand name such as Spar, Aldi, Champion, and

Intermarche.

Cost of sampling:

- Products (7,000 units) = 8,400

- Supermarket Contract = 4,000

- Retail Sales Person = 18,000

Total Cost for Sampling = 16,900

Magazine Advertising:

Consumers in Dendermondes target market are avid magazine readers,

thus magazine advertising will be attempted this year. Dendermonde will

advertise through a health and lifestyle magazine in Belgium called

BioGezond. The magazine reaches up to 567,000 readers annually; these

readers compose of well-educated readers with average income, they also

have an interest in improving their health and lifestyle. 52%

percent of readers are below 49 years old while the rest are

above. This shows that BioGezond is the right choice

forDendermonde because of the suitable target consumer

group. The website of the magazine will also serve as a greatpromotional with 120,000 page views.

Cost of magazine advertising:

- 3 months, Page = 10,722

- Online, Homepage Banner = 4,000

Total Cost for magazine Adv. = 14,722

7.7 Supply Chain Strategies

In the past, Dendermonde has targeted three categories of distributions:

- Supermarkets / Hypermarkets

- Independent Retailers

- Exports

To increase distribution and sales of its products, Dendermonde will focus on distributing to

supermarkets in Belgium. Dendermonde will not conduct exports until the health and profitabilityof the company has been regained.This is because the company needs to focus in strengtheningits

distribution chains in Belgium by this year in order of meeting its objectives. Dendermonde will


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continue to distribute to its existing retailers in Belgium with the addition of Albert Heijn and

Carrefour as private label brands, and Aldi as its own brand.

Albert Heijn

Albert Heijn (AH) is a supermarket established in Netherlands

that became quite popular in Belgium. Although AH is considered

to be selling middle to high priced products, the supermarket has a

range of house brands that is well known by AHs customers. AH is

one of the biggest supermarkets in Belgium with high market

shares, the types of retail store includesconvenience markets and

hypermarkets. The stores are located in almost every city in

Belgium and the reason why we chose Albert Heijn is because we

think that Albert Heijn will help Dendermonde in generating more

sales because of AHspopularity.

Carrefour

Carrefour is a French retailer that became popular as supermarkets,

convenience stores, and hypermarkets in Belgium. Carrefour has one of the

largest chains of hypermarkets around the world. The company rates

number two in highest earning revenue amongst hypermarkets. This

company can direct Dendermonde into generating more sales due to its

wide target consumers, easily accessing Dendermondes products.

Aldi

Aldi is a German discount store and supermarket that also became

popular in Belgium. Aldi is seen as an affordable choice supermarket

therefore Dendermonde can use its own Brand for this supermarket.

Aldi is sure to be well known by Belgian consumers due to its high

revenue of 58 Billion. A German market research states that 95%

ofblue-collar workers, 88% ofwhite-collar workers, 84% of public

servants, and 80% of self-employed people shop at Aldi. This type of

target group suites Dendermondes target market that are made ofcustomers looking for affordable yet valuable products.

We recommend Dendermonde distribute mainly through

supermarkets and hypermarkets mainly because by selling through those channels,Dendermonde

will be more accessible for its potential consumers. We chose to channel as a private label brand to

AH and Carrefourbecause the Return on Equity is 13.4% and 6.73% respectively. The benefit of

selling to private label brands is the obvious high profit margins. Dendermonde will only have to

produce the product and ship it to the supermarketsdistribution center while the retailer manages

the shelf spaces, marketing and branding of the products.
http://en.wikipedia.org/wiki/Blue-collar_workerhttp://en.wikipedia.org/wiki/White-collar_workerhttp://en.wikipedia.org/wiki/White-collar_workerhttp://en.wikipedia.org/wiki/Blue-collar_worker


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As an alternative to exclusivity, or in addition to it, Dendermonde could also operate as a

wholesaler of private label brands and offer limited access to other retailer who pays Dendermonde

premium acquisition costs for the right to carry Dendermondes brand. This not only generates

more income, but it also spreads the exposure of Dendermondes brands even further. A

relationship with a high volume reseller can lead to more customers buying Dendermondes

brands. The most important part of the supply chain strategy is the creation of accessibility, selling

through supermarkets or hypermarkets will create more accessibility for Dendermondes target

market rather than independent retailers.

8 Implementation

8.5 Sales Forecast

We believe that the following activities that we have planned fore Dendermonde will

influence sales for 2013:

New product ranges (+3.0%)

Promotional Activities (+2.5%)

Increased private label brand sales (+1.5%)

New distribution channels (+3.0%)

The two added product range, organic and low fat desserts,would affect sales tremendously

due to the fact that the demands for these types of products areskyrocketing. An estimated of

3.0% increase in sales will be forecasted due to more volumes of sales. The promotional activities

will help boost sales of Dendermondes brand; the increase in brand awarenes s is estimated to

affect 2.5% of increased sales. The current niche for affordable and healthy products are boosting

sales of private label brand sales, more customers are opting for a healthier and cheaper

alternative, causing an estimated rise of 1.5% of total sales due to gained purchases of private

label products. The new distribution channel; Albert Heijn, Carrefour, and Aldi, are estimated to

contribute a 3.0% increase in total sales due to the increases of sales volumes to be sold.With the

new forecasted sales, the estimated new market share of Dendermonde in 2013 will be

approximately 2.2%. The increase in market share is mostly due to competitive pricing strategies,

promotions, and increased overall sales within Dendermonde.


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DendermondesSales Forecast 2013

From the table DendermondesSales Forecast, the Optimistic, Average, and Pessimistic Forecasts

were calculated based on average uses of products per year by Dendermondes current customers.

The Optimistic Forecastwas calculated using an estimated heavy usage of 53 products per year. The

Average Forecast was calculated using an estimated average usage of 50 products per year. The

Pessimistic Forecast was calculated using an estimated light usage of 47 products per year. We

estimated the demands using the Chain Ratio Method; the data used to calculate the estimations for2013 are shown in the table below:

The Chain ratio method is an analysis tool especially offering optimistic forecasts. The chain ratio

methodbased the forecasts on market trends instead of actual orders and inquiries, which best suits

the company due to Dendermondes lack of sufficient company data. We can conclude that the

overall forecasted sales for Dendermonde would increase 10% by the end of the calendar year. Theforecasted sales increase results to a 0.2% increase of market share, making it 2.2% in 2013.

Month

Previous

Sales

Optimistic

Forecast

Average

Forecast

Pessimistic

Forecast

June 903,333.00 1,056,861.55 997,039.20 937,216.85

July 903,333.00 1,056,861.55 997,039.20 937,216.85August 903,333.00 1,056,861.55 997,039.20 937,216.85

September 888,333.00 1,039,312.18 980,483.19 921,654.20

October 873,333.00 1,021,762.81 963,927.18 906,091.55

November 873,333.00 1,021,762.81 963,927.18 906,091.55

December 873,333.00 1,021,762.81 963,927.18 906,091.55

January 873,333.00 1,021,762.81 963,927.18 906,091.55

February 873,333.00 1,021,762.81 963,927.18 906,091.55

March 888,333.00 1,039,312.18 980,483.19 921,654.20

April 903,333.00 1,056,861.55 997,039.20 937,216.85

May 903,333.00 1,056,861.55 997,039.20 937,216.85

Total Sales 10,660,000 12,471,751 11,765,803 11,059,855


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8.6 Action Plan

The action plan details activities necessary to implement all marketing strategies. In addition,

the action plan includes the timing for each item, the individual responsible, and the budgetary

requirements.

Objective 1: Increase 10% sales by the first year.

Action Plan 1: Increase Distribution Channels

Action Items Beginning

Date

Ending

Date

Responsible

Party

Cost Remarks

1. Identify key

supermarkets,hypermarkets, and

convenience storeswhere

Dendermondesproducts can besold.

June 1 August 1 Marketing

Manager

46,800 A marketing manager

will be hired thereforethe cost will be the

annual salary.

2. Make initial

contact with larger

supermarketchains; Albert

Heijn, Carrefour,Aldi.

August 1 October 1 Marketing

Manager 2,000 Travel expenses.

3. Follow up initialcontacts with all

potential resellersand obtain contacts

for coming month.

August 15 Ongoing MarketingManager and

SalesRepresentatives

15,000 15,000 are budgetedfor travel expenses

although actualexpenditures are as-

needed basis andcannot be preplanned.

Action Plan 2: Launch new product lines


Date

Ending Date Responsible

Party

Cost Remarks

1. Analyze the external

environment toidentify potential

opportunities and

threats withholdingthe company thatcould affect the

products.

June 2 Ongoing Marketing

Manager

3,000 3,000 are budgeted

for researchexpenditures.

2. Aware current andnew customers of the

new products rangeavailabilities through

promotional tools and

contacts.

June 5 September 5 SalesRepresentativ

es

10,500 500 are allocatedfor pamphlets,

brochures, and

10,000 fortravel

expenses.

3. Visit retail channelsof product lines to

review the productsshelf positioning.

July 1 Ongoing MarketingManager

5,000 Travel Expenses.


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Objective 2: Increase 10% brand awareness in the first year.

Action Plan 3: Increase Brand Awareness


Date

Ending Date Responsible

Party

Cost Remarks

1. Development of

company website

June 4 July 6 Marketing

Manager

2,660 The cost of building

the website. This costis applicable per year.

2. Create social medianetworks: Facebook,

YouTube, LinkedIn,and Twitter.

June 10 June 11 MarketingManager

0 The company profilerepresented in the

sites should lookattractive and

interesting.3. Prepare logo and

brand. Send

advertisements and

newsletters about thecompany to customers

through email.

June 10 Ongoing Sales

Representatives 1,000 The budgets are

allocated for logo,

brand, and newsletter

design.

4. Prepare advertisingmaterial for BioGezond

Magazine.

June 15 June 25 MarketingManager,

AdvertisingDesigner

15,722 1,000 are allocat

Marketing plan of a Dairy Company

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