In terms of proposed strategy they need to do a product line modernization which can be done either overhauling the whole range at once or doing it in a step by step procedure. Some lines such as Lajawab and Crisp n Dry are required to be scuppered as part of this modernization process.
Better segmentation of consumers is required to be done by giving each segment what they want from the product. The segmentation can be Geographic segmentation or demographic segmentation. It can further be divided into Psychographic and behavioural segmentation.
The product needs to be placed precisely so that it attracts the target audience. It should be a mix for high standard products and medium level products. This will enable product to attract attention of all the targeted consumer segments.
Price of the product is a unique selling point as people perceive it as a value for money product but for the line extension new prices needs to implement which should be based on an extensive market research analysis.
For promotion a teaser campaign can be used and create awareness of brand and in fact the re-born brand or product by arranging cookery shows and also sponsoring food courts and aggressive marketing strategies.
Table of Contents
Introduction:
Lever Brothers Pakistan Limited (LBPL) was first incorporated in Pakistan in 1948 and work started in the present factory in Rahim Yar Khan. DALDA Banaspati was the first product from that factory followed by Lux soap in 1954.
The present Karachi Edibles Factory was acquired in 1965 from A&B Oil Industries Ltd. Modernization and expansion of the factory has been a continuing process..
The head office shifted from Rahim Yar Khan to Karachi in 1966.
LBPL moved into the personal products business in 1981. Further diversification on the foods side of the business has taken place with the introduction of margarine and cooking oils. They have a seeds business, an industrial detergents business, and an ice cream business.
DALDA are the pioneers’ in the ghee and oil industry in Pakistan, have a growing category to deal with in the long run, factors such as increase in population is evident to prove that the industry has to increase to meet the demands, DALDA being market dominator has good penetration of 52-55% in the gee and oil segment, yearly consumption is 14Kg per capita and has loyal consumers as company is in existence for more than 60 years. There are certain competitors in the segment but having their consumer expectation met each time, they achieve consumer value satisfaction relationship.
Current Marketing Strategy
MARKET:
Lever’s Interaction with Its Market
The target market of Lever comprises of health, quality and taste conscious people, hence Lever’s commitment to tailor its products according to its customers is evident from the fact that launching of each and every product passes through the extensive stages of research & development.
TARGET MARKET:
DALDA Cooking Oil, DALDA Banaspati, DALDA Sunflower Oil, DALDA Lajawab and Planta Cooking Oil.
PRODUCT POSITIONING:
DALDA cooking oil: The cooking expertise for the whole family.
DALDA Banaspati ghee: Substitute for desi ghee but healthier with the same great taste
DALDA sunflower oil: very light oil, providing extra health benefits.
Planta cooking oil: Oil with the taste of Ghee – a healthy substitute to ghee. DALDA
Lajawab: vegetable oil with the taste never felt before and having carry through flavour not for normal but for special cooking.
Consumer Markets and Consumer Behaviour
Characteristics Affecting Consumer Behaviour
Culture
Oil and Ghee usage has always been very high in the Indo-Pak region. Our cultural heritage as far as food is concerned consists of spicy and fried food.
Subculture
Educated, health conscious consumers use DALDA Cooking Oil more in the urban areas. The reasons differ for the various consumers for example there are certain C class households who use DALDA because it has been used in their families for ages. It is a heritage carried down the generations.
Banaspati on the other hand is more common in Punjab where people prefer the taste of Ghee. The more health conscious consumers however prefer Planta Cooking Oil, which, though Oil, gives the same great taste of Ghee.
Social Class
LBPL has divided the classes in to A to F households. Class A households are the upper class, high-income groups. In these household the product is usually bought by the servant (most probably the cook). Class B households are the middle-income group. These are the quality conscious, health conscious consumers. This is the class most involved in buying the product. Class C households, though they would not go for DALDA because it is a premium product may, however, buy it because of brand loyalty as they have been using the product for a long time. Classes D to F cannot afford the premium quality products.
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Family
Family plays an important part. In all the advertisements, be it cooking oil or banaspati or margarine, emphasis has been placed on the family. The housewife is shown to be appreciated by the whole family including her in-laws, her husband and her children. By providing them with food that both tastes and smells good, she wins the hearts of her family members.
The Markeing Mix
The Marketing Mix is the set of marketing tools that work together to affect the market.
PRODUCT
Product Classification:
The DALDA, brand is a consumer product. It is bought frequently, immediately and with a relatively small amount of comparison. As such the goods, which fall into the convenience goods bracket, are typically staple goods which are true for almost all of the products in this brand.
Product Attributes
Product Quality
LBPL promises the highest quality for all of its products. As such the ODF products are also manufactured to the highest standards. The consistency in LBPL’s promises and the delivered product please consumers.
Product Features
A product’s features can set it apart from the competition and differentiate it for competitive advantage.
DALDA Cooking Oil: Ultra-refined cooking oil, with the best taste, and also better consistency and colouring.
DALDA Banaspati: Lower in cholesterol than desi ghee and better tasting.
DALDA Sunflower Oil: Lighter and healthier than most other oils except perhaps Canola oil.
DALDA Lajawab: Emulsified Vegetable oil with rich taste for special cooking.
Planta Cooking Oil: Cooking oil which tastes like ghee for those who want the best of both worlds.
The total customer value analysis helps us to determine what product the consumer is getting in the end. It also helps somewhat in the determination of the key features of LBPL’s ODF products.
Total Customer value
Product
Services
Personnel
Image
Packs/ Tins of Products
Cookery program
Advisory service
Social and Esteem needs met
Product Design
Design is more than skin deep, it goes to the heart of the product and a good design contributes to the product’s usefulness. When we talk about ODF products the design element means how the oils and fats themselves are formulated and how their compositions influence their market.
DALDA Lajawab:
DALDA Lajawab product is a unique product with enriched features. It is altogether a new product, packaged in a 1-liter polyjar. Company had test marketed this product on 14th September 1998 in Lahore and after three months company launched DALDA Lajawab in Karachi, Lahore and Islamabad.
Oil and Ghees:
DALDA C Oil
DALDA B Ghee
DALDA Sunflr
DALDA Lajawab
Cinsistency
Medium
Heavy
Very Light
Light
VITAMINS
A,D,E
A&D
A&D
Packaging:
All ODF products’ packaging material is imported. Even the ink used on the packaging is imported. The packaging is of the highest standard, at least in the local market. The DALDA brand is available in tins, bottles and poly-bags. Planta is available in tins. All packages are clearly and legibly labelled as to contents and ingredients. Best before dates are also fast becoming standard. All packages are easy and safe to use. The packaging for the DALDA brand has retains the same green colour since its introduction 50 years ago.
Branding:
Branding is an aspect of marketing at which LBPL seems to excel especially when we think of the DALDA brand. Since its introduction so many years ago DALDA has retained the same motherhood and cooking expert image something which is hard to do for so long. There are typically four levels of meaning conveyed by a brand name. The following is an analysis of what ODF brand names convey:
BRANDS
Levels
DALDA
PLANTA
Attributes
Premium quality, high prestige
The oil which taste like ghee, best of both worlds.
Benefits
Tasty food. Cooking ease.
Health, nutrition and good food.
Values
Motherly love, tradition
Motherly love, tradition
Personality
Cooking expert, mother
Young educated housewife also young mother
PRICE:
The Structure of the Market
There are a very large number of buyers and also a large number of sellers. Soya Supreme offers UHT treated oil, Nayab sells its ghee in Poly bags LBPL and Habib differentiate them from the entire market on the basis of quality and so on.
Elasticity
ODF consumer products have relatively elastic demand i.e. the amount of LBPL’s ODF products is relatively responsive to price where a change of 5-10 rupees can affect demand. This is common to all consumer items in a reasonably competitive market.
TOTAL CUSTOMER COST
Previously we had used the Total Customer Value concept to outline what the consumer actually received as the product. Here is what the customer ultimately pays to get the product:
Product
Service
Personnel
Image
Total Customer Cost
Price paid to buy LBPL’s ODF products
Time spent in finding Blue Band
Energy spent in finding/using DALDA/ Planta/Blue Band
The psychic cost of not buying a foreign ODF Brand
Pricing Strategy:
LBPL’s marketing objective is primarily to tap the upper-middle and upper class segments. For this they need to achieve product quality leadership and in doing so they incur high R&D costs. To cover these costs they use value-based pricing and premium pricing strategies, relying on consumers’ perceptions of their products’ values.
The following grid summarizes the above discussion on pricing strategy:
Higher Price
Lower Price
Higher Quality
Premium Strategy (Value based pricing)
Good Value Strategy
Lower Quality
Over charging Strategy
Economy Strategy
PLACE:
Lever Brothers Pakistan believes in synergy, that is a perfect blend of all the components of the marketing mix. Proof lies in it having one of the most efficient and largest distribution (networks) systems in our country.
LBPL claims that it takes six weeks for the product to move from the factory to the shelf. The product travels to the primary distributors (one and half weeks), then to the secondary distributor (one and half weeks) and finally to the trade level (three weeks).
These intermediaries play a highly important role in getting the product to the target consumer. Easy access on a national level to both urban and rural areas is vital if consumption targets are to be achieved. By concentrating on its distribution efforts, it helps LBPL promote its product and gain an advantage over its competitors
CHANNEL LEVELS:
It has no direct interaction with its wholesalers and retailers as such but nonetheless, operates through a network of about 1300 distributors located in 600 regions throughout Pakistan.
Multiple distribution channels are used:
Traditional Channels
FIELD FORCE
The distribution channel performs the functions of:
Providing necessary market research and intelligence information
Developing and persuading consumers to take a product offer
Finding and communicating with prospective buyers
Matching the offer according to the customers need and informing the manufacturing concern about it
Reaching an agreement regarding price and terms of sale offer to facilitate possession
Sales Setup:
COLLECTION PROCESS:
LBPL has a unique system for the collection of its payments. The system works in an organized manner that is; the distributor at the head office, which in turn instructs the depot or the factory for delivery, places an order. At the same time people at the depot prepare the invoice and forward it to the head office. The head office then fills in the signed cheque and sends it to the bank for encashment. Thus your consignment of DALDA, Planta or Blue Band is paid for.
TERMS AND CONDITIONS
No credit terms with the distributors
Head office should have signed books of the distributor prior to any transaction
The check should not bounce at any point in time.
PROMOTION:
The most concentrated promotion techniques used are television advertisements. Its ads are shown on PTV and STN channels. The ads are re-launched after sometime to maintain interest of the consumer and when the product is modified.
DALDA uses Visibility marketing and Media marketing.
Visibility marketing
DALDA concentrates most on visibility and availability. This includes print advertisements, price cards, posters at vendor’s shops, sign boards, buntings, flags etc.
Media Marketing
Lever uses different news papers and magazines in promoting DALDA but the major emphasis is on advertisements, shown at the times loving mothers are watching TV..
Sales Promotion
It also plays its role in promoting DALDA by arranging different events like cooking contests, games and shows.
Personal Selling
There is no personal selling in case of DALDA brand, only business products of ODF group are promoted and sold through this process. When DALDA come up with consumer promotion it gives the trade off to the retailers.
Other mediums
Print ads in magazines such as Women’s’ Own, She, etc. and those read by the average but literate housewife. Buntings, posters, trade flags (hung at the retailers) inducing consumers to try the latest taste for DALDA, etc.
DALDA
SWOT Analysis
STRENGHTS:
DALDA’S products have the largest market share in Pakistan in oil and Banaspati market.
DALDA’S products have very high customer loyalty.
LBPL takes care in keeping the highest quality of the products it produces.
In the Banaspati category DALDA is the only fat free brand.
WEAKNESSES:
DALDA is a very old brand, there has no change in packaging since ages, people feel that the new better packaged brands have better products.
THREATS:
BANASPATI and OIL is also sold loose to a large rural market.
The market is now entered by Soya bean canola and sunflower oils, these are being bought by health conscience people this will lead to DALDA’s and Planta’s decline in market share.
The overall market of oil and banaspati is declining.
OPPORTUNITIES:
The company can cash on DALDA to introduce new products; they have a large market share in the central and northern areas of Pakistan.
People in the metropolitan areas are inclined towards branded products.
The fat free Banaspati is still popular and can be advertised to gain the market in health conscious people.
BOSTON CONSULTANCY GROUP MODEL (BCG MATRIX)
Dalda is a cash cow where by providing Dalda Foods with continuous source of revenue.
Product range alone accounts for 80 % profitability of the firm
Repositioning: Need for Repositioning:
Dalda entered Pakistani banaspati market in 1952 and launched Dalda Cooking Oil in 1981. Since then there haven’t been much changes in 4 Ps. The only minor changes included a slight flavor change of Dalda banaspati in 1993 and the launch of Dalda Crisp n Dry and Dalda Lajawab in 1997 and 1998.
Dalda with Lajawab and Crisp n Dry tried the concentric diversification strategy. They overlooked the fact that the operating market had intense competition with new entrants picking up market share. At that time it was needed to simply modernization of the brand without confusing the customer by adding similar products.
Last packaging change was done back in 1994 and that too was not very different from other brands. There is hardly any difference between the package colour and design. Moreover when they are kept in the aisles of retail outlets all one can spot is a bunch of containers with either yellow or green packaging.
Proposed Marketing Strategy
Line Modernization:
Even when the product line length is adequate, the line might need to be modernized. The issue is whether to overhaul the line, piecemeal or all at once. A piece meal approach allows the company to see how customers and dealers take to the new style. It is also less draining on the company’s cash cow. This is the reason why repositioning Dalda is preferred. In this, we would be continuing the marketing of Dalda (VTF) banaspati, Dalda cooking oil and will stop manufacturing and selling Dalda Lajawab and Crisp n Dry.
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In rapidly changing product markets, product modernization is carried on continuously. Companies plan product improvements to encourage customer migration to higher valued, higher priced items. LBPL will try to do a similar thing with Dalda through the introduction of flavored oils. This will be a line extension catering to the needs of women between the ages of 20 and 45 and belonging to the upper income strata of Rs. 10,000/- plus.
Segmentation:
Market segmentation at the level of segment marketing will be practiced for Dalda in order to increase targeting precision. It is recognized that buyers differ in their wants, purchasing power, geographic locations, buying attitudes, and buying habits. Dalda will try to isolate some broad segments that make up the market for different items on its product line. For example, health conscious consumers for Dalda cooking oil with vitamin E. Similarly, modern working women looking for convenience for the Dalda flavored oil market (this line extension will be discussed later in detail).
Bases for Segmenting Consumer Market
Geographic Segmentation
The market for oil and banaspati is highly commodity driven. Moreover, the perceived difference between various brands is very little. Therefore, Dalda has to ensure easy access and availability or else it would lose out to competitors.
Geographical locations:
Karachi, Lahore, Hyderabad, Faisalabad, Islamabad and Multan.
The neighbouring areas of these metropolitan cities also report to the above mentioned six branches.
Demographic Segmentation
The target audience will be primarily females starting from the age of 20 to round about 45 years of age.
For Dalda banaspati and cooking oil the income strata would be Rs. 4000/- plus. However, the new flavoured oils would be targeted at the upper strata of Rs. 10,000/- plus. As the loose oil/banaspati consuming segment comprises around 50% of the market, therefore, Dalda junior would continue targeting this segment.
Psychographic Segmentation
The entire product range would be targeted at females leading a trendy and modern lifestyle. Flavoured oils would especially be marketed to working women looking for convenient and smart recipes.
Behavioural Segmentation
We will try to increase the occasions of oil and banaspati consumption. Soon after Moharrum the marriage season will begin. This will be a good opportunity to cash on the seasonality effect.
Through the introduction of flavoured oils, we will be inducing new usage patterns.
Following are the extra uses for this category:
Can be used in salad dressings, dips, mayonnaise, etc.
Can be used as a drizzle in presentations.
Can be used in soups and stews.
Can be used for shallow, griddle and deep-frying.
Can be used for sauntering vegetables, sea foods and meats.
Can be used for marinating meat.
Placement:
Edible oil and Banaspati is highly commodity driven. The final selling price is greatly dependent on the prevailing world oil prices. Besides this the perceived difference between the various brands ion this price sensitive category is almost negligible therefore the placement at retail outlets greatly determines the sales volume.
In order to cash on the shelf space all throughout the year LBPL lays great stress on having a strong distribution system. Each branch has a branch manager to whom several Assistant Branch Manager Report. Under each Assistant Branch Manager are Lever’s Distributor Managers. Each Distributor Manager is responsible for Five Distributors of Lever Range of Products. The entire inventory leaves the factory and goes to the depot where distributor has already submitted the total week’s requirements.
Higher margins would be tied with the sales delivered/achieved.
For Example:
Sales exceeding Rs. 100,000/= would entitle the retailer a commission of 5% of the
total Rupee Sales.
Similarly on the sales of 100 units of the five liters pack the retailer would be given five extra units free of cost. While on the sales of 100 units of the two and a half liters pack the retailer would be given two extra units free of cost.
Pricing:
The pricing strategy is cost based and we recommend replacement cost pricing for the repositioned Dalda instead of stock recovery pricing. As the current prices are dependent upon the prevailing world oil prices the new type of pricing strategy will ensure that the spread between cost and selling price is kept to a minimum. This will make the prices of Dalda more competitive as the fluctuations in the market prices will be absorbed in the final selling price.
We will maintain the current price of the existing product range. It is given in the following table. However, Lajawab and Crisp n Dry would be withdrawn from the market. The price of flavored oils would be as follows:
Dalda Ginger n Garlic ± Rs.130/- for 1.5 liters.
Dalda Lemon – Rs. 130/- for 1.5 liters.
Promotion:
Dalda always been seen as a very motherly brand, a brand which has been used generation after generation. The tag line ‘Jahan Mamta Wahan Dalda´ was the last repositioning given to this brand which yet again has its root from the motherly foundation.
We strongly feel that Dalda needs to take a diametric turn around in the message that it passes on to its consumer.
The following are the steps we have planned.
A teaser campaign for the new position would be designed. This campaign would be strictly focused on the novelty of Dalda. The advertisement would create brand awareness for the new line extension of flavored oils.
Continue marketing of Dalda Banaspati (VTF) and Dalda cooking Oil to not only the present segment of females aged 35+years but also to females between ages of 20-34 years.
Dalda Ka Dastarkhan will be re-launched with a completely new look on both FM ± 100 and PTV world starting from next quarter onwards i.e. May, June and July.
Critical Reflection:
My chosen product or brand I believe is in decline stage is because it has been around for so many years and since there are new entrants in the market and have made this brand take their foot of the paddle. It has not been the first choice of consumers anymore and consumers also thought that this brand has nothing new to offer to them. Sometime only rebranding the product can itself rejuvenate the whole brand and that is what I am trying to achieve through my marketing strategy.
Before this module marketing was just mere TV or print media ads but after this I have been able to understand or somewhat got an idea of marketing. Marketing is not just something shown to us; it has other concealed or very extensive research and analysis parts which is not always visible to the end user or the customer.
The experience gained from the module was helpful in understanding of the topic in hand, and how to approach the topic. It made the concepts of marketing clear and gave understanding that a single product cannot be aimed at all the customers or at all the people. While devising marketing plan I came across this matter and tried to segment my product for a particular set of potential customers.
The process has further enhanced my point of view of understanding the product and then need to proceed ahead with the marketing plan. The first P in the marketing mix is just about this same scenario where you need to understand all three levels of product thoroughly before any sort of plan can be initiated.
The components of a professional marketing plan are Executive summary, Situation analysis, Marketing Objectives, Target Audience or Target Markets, Key messages, Implementation Plan, Measurement Ideas and Budget.
Executive summary provides the high-level summary of the information which is conveyed through the plan. It will work as an overview of the whole marketing plan. The situation analysis will show where we stand now and analysis of the surrounding and the markets. Key market place opportunities involve in the competing market. Statement of Marketing Objectives will be where we decide our objectives and where we want to be with our marketing strategy. This involves the targets in terms of revenue, client base etc. Target audience is the segment we want to focus on and will aim out marketing strategy or marketing efforts at these particular set of people or groups. For each and every target audience or target group we need to have a specific Key message to appeal them or to attract them towards the product. Implementation plan is the pathway which leads to how the strategic steps are taken to achieve targets of the marketing campaign. Action plan is the actual timeline of all the actions which are to carried in order to implement the plan and all the steps are taken. Marketing plan do need to have a measurement procedure or measurement process in place to record and evaluate every step once is taken on and it is finished.
The experience gained from the module was helpful in understanding of the topic in hand, and how to approach the topic. It made the concepts of understanding the logic behind how to successfully understand and approach consumer perceptions, how they are managed and altered and how consumers reach towards buying decisions. It also made it clear and gave understanding that a single product cannot be aimed at all the customers or at all the people. While devising marketing strategy I came across this matter and tried to segment my product for a particular set of potential customers.
The process has further enhanced my point of view of understanding the product and more importantly the target consumer of the product. This module has helped me understand that we need to identify our target consumer and also his or her behaviour before devising any strategy that impacts on the consumer positively.
For each and every target audience or target group we need to have a specific Key message to appeal them or to attract them towards the product. Before the module it was not the understanding, as I perceived that marketing campaigns contains same message for everyone but this perception has changed now.
Initially I misinterpreted and mixed-up some parts of the analysis which upon a review was correctly before the final draft was furnished. I was able to combine learning and techniques of consumer behaviour with the task in hand and what needs to be addressed. The objective of the report was efficiently conversed by usage of model, theories and learning material which also resulted as a contribution to overall learning and grooming.
Overall, this report was a learning and full of exploration experience which is totally different to the information we can extract from the books and journals. I believe that I can now understand the complex and critical field of consumer behaviour in a more organised and efficient manner.
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