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Transcript of Marketing Management
Vitality is at the heart of everything we do. It's in our brands, our people and our approach to business. VISION STATEMENT
We help people around the world meet everyday needs for nutrition, hygiene and wellbeing, with brands that help people look good, feel good and get more out of life. CURRENT MARKET SITUATION
The Pakistani consumer market consists of around 180 million people who purchase billion worth of goods and services. This makes it one of the most attractive consumer markets in the world.
Unilever, established in 1964, is now the world’s leading manufacturer of margarine. Blue Band, a world renowned brand that was launched in Pakistan more than 20 years ago, now has a market share of more than 80% in the branded margarine industry, with an average growth rate of 25% in the spreads market in Pakistan over the last couple of years.
We decided to launch a healthy and credible alternative spread for consumers wishing to consume a margarine, which looks after their health needs. So far no company is catering to these consumers’ needs of Zero Trans fats, variety and taste. This is not so much of a saturated market and is relatively easy to penetrate keeping in mind the benefits being provided by our product. MARKET DESCRIPTION
Flavored margarine’s market consists of consumers such as kids who avoid having breakfast and people who dislike tasteless margarine. The specific segment being targeted in the first year is kids. Buyers can choose between varieties of flavors with the additional benefit of zero Tran’s fat. Eating a nutritious breakfast with the right amount and the right kind of nutrients has proved to enhance children’s ability to concentrate at school. Differentiation:
Our company offers greater customer value by differentiating its market offering by producing a unique flavored margarine. It offers great flavors along with nutrients, which will not only attract children but also youngsters and health conscious adults seeking a healthier lifestyle. Positioning:
We can make a clear image of our product in the minds of customers by ensuring them a healthy, delicious margarine in various flavors, clearly imposing a higher value compared to other competing products. PRODUCT ORIENTED MISSION STATEMENT:
We sell flavored Margarine
MARKET ORIENTED MISSION STATEMENT:
“Committed to provide quality margarine for a healthier lifestyle by adding flavors & taste to life. Start your day with flavored margarine and taste a difference in life.”
“Ensuring a healthier lifestyle by adding flavors and taste to life” COMPETITIVE REVIEW:
•International Brands Distribution:
Unilever has a wide reach and its distribution network reaches remote regions within the country. With a wide range of offerings, including low unit priced packs, Unilever Pakistan addresses all segments of the socio-economic pyramid.
We plan to market our product through intermediaries with distribution to convenience stores, super stores and at grocery outlets throughout the country. Furthermore we intend to consolidate distribution through the channel, which has seen the most growth in sales.
•Effective Distribution: Unilever Pakistan has one of the widest distribution channels with more than 650 distribution centers
This will allow the new product to effectively reach the shelves of every convenience and super store in the country.
“Frugarine”, the first flavored margarine in the country.
Flavors: Strawberry, apple and blueberry.
•Backed by a Strong Parent Company: Unilever Pakistan is a company with a strong financial and economic background.
- owns 80 different brands which penetrates the market in
> Home Care
> Personal Care
•New Brand: Despite being backed up with the established 'Blue Band', differentiating by taste will open new challenges for 'Frugarine'
• Higher Production Costs: Added flavors and ingredients in the margarine will significantly increase the production cost per unit.
•Increasing Demand for Low-Fat Products: significant rise in:
Other High-Cholesterol Related Diseases
The low-fat and Trans fats attribute in “Fruigarine”, specifically caters to these consumer needs.
•Low Promotion Efforts from Competitors:
Frugarine perked by its parent company enjoys a strong promotional campaign
Unlike the vaguely seen Nurpur, Millac and Adam's, Frugarine will have an edge by promotional activies
-Bill Boards THREATS:
•Intensive Competition: As stated before, “Frugarine” is likely to face extensive competition from
•Increasing Consumption of Unbranded Margarine and Butter in the Local Market Segmentation S.W.A.T WEAKNESS STRENGTHS OPPORTUNITIES THREATS OBJECTIVES AND ISSUES
We have set aggressive but achievable targets for the first and second years of our market entry.
First Year Objectives:
Second Year Objectives:
Our major issue is the ability to establish a well-recognized brand name linked to a meaningful positioning.
“Frugarine’s” marketing strategy is based on the positioning of product differentiation.
The “Frugarine” will be available in three different sizes:
30 grams which is for Rs.25/-
75 grams which is for Rs.45/-
200 grams which is for Rs. 95/-
PRICE ADJUSTMENT STRATEGIES:
Discount and Allowance Pricing:
We will give 10% discount to buyers who will buy in large quantities i.e. above 10 packs. Later, functional discount will be given to distributors for providing a warehouse to us.
Big super stores will enjoy location pricing since they will be dealing in large volumes.
Assuming that the launch of our product is successful and we are able to cover our costs adequately we would also offer promotional pricing in the near future where buyers will be entitled to high price cuts. Prices will be set below the list prices to create high demand.
DISTRIBUTION CHANNEL AND MARKETING SYSTEM
The distribution channel that we are going to use is indirect marketing channel, which includes sales through our distributors and dealers (Indirectly) to the business markets.
We’ll also use the Horizontal Marketing System as well. By working with organizations like Omore and other we’ll promote out product.
Brand Positioning: Our brand will be associated with a desirable benefit i.e. taste, flavors, variety and no unsaturated fats.
Brand name selection: The concept behind naming our brand ‘FRUGARINE’ is that it refers to the combination of FRUIT + MARGARINE
Brand Sponsorship: Our product will be launched initially as a Manufacturer’s Brand. It will also be launched under Co-branding where cooperating with other companies will cater our product in the market.
BRAND STRATEGY MARKETING STRATEGY
The Frugarine will be introduced in February. Following are summaries of the action programs we will use during the first 6 months of next year to achieve our started objectives.
Actions Programs BUDGETING AND PRODUCTION COSTS
Total first-year sales revenue for the “Frugarine” is projected at Rs.200 million, selling around 5 million units of Frugarine in various sizes and flavors. The average wholesale price per unit is thus anticipated to be Rs.40 per unit and the gross profit at the end of 1st year is anticipated to be Rs.66 million at the current GP ratio of 33%.
Break even calculations indicate that the new product will become profitable after the sales volume exceed 1.5 million units at the average price of Rs.40 per unit, variable cost of Rs.26.67 per unit and Fixed costs of Rs.20 million. We estimate that we will be able to break even within first 6 months of the operation.
20,000,000/ 40-26.67 = 1,500,000 CONTROLS
We are planning closely monitored quality and customer service satisfaction. This will enable us to react quickly if we face any problem that may occur. Other early warning signals that will be monitored for signs of deviation from the plan include monthly sales and monthly expenses. Given the market’s volatility, we are developing contingency plans to addressing fast-moving environmental changes such as new technology and new competition.