Cost Of Marketing Orientation

The purpose of this report is to find marketing strategies to launch “Srikas” at Ceylon Biscuit Limited. The task one revels marketing process and benefits and cost of marketing orientation. The two bring out how macro and micro environment influence the Srikas and segmentation of Srikas. The task three express extended marketing mix of the Srikas. Finally task four explains how ansoff’s matrix chart is applied to Srikas and how international marketing differs from domestic marketing.

Introduction

Company background

Ceylon Biscuit Limited (CBL) is one of the fastest growing and largest conglomerates in Srilanka. Currently it manufactures and markets many leading brands in biscuits, confectionery, cereal, organic fruit products and many other categories globally. CBL Recognized as a technology and innovation leads producer.

New product

Ceylon Biscuit Limited is going to launch a new variety of chips “Srikas”. It is bring a new flavor which is not obtained in Srilanka. In the present world the young age group are more susceptible for developing diabetes Due to their lifestyles and food habits in order to avoid these health problems and satisfy the consumers to have healthy food the company introduce the ‘Srikas’. The ingredients added to make these is from Srilanka. It is full of protein vitamins and minerals to help keep kids active and healthy.

LO 2) Concepts of Segmentation, Targeting and Positioning

2.1 ENVIRONMENT FACTORS

Micro Environment

Competitors

Srikas face a wide range of competition. The present competitors of Srikas are Lays, Pringles, Pop Pop and Tip Tip.

Marketing intermediaries

Marketing intermediaries help the company to promote, sell and distribute Srikas.

Customers

The main consumers of Srikas are children.

Suppliers

The Srikas suppliers are mainly farmers and honey collectors. They give high quality ingredients to make better quality product.

Public

The public is one who has the potential interest or impact on company’s ability to achieve its objectives. In advertising the company must not misuse anything against the society then only CBL maintain the brand name. CBL has erected bud holds in order to gain good will of public.

Macro environment

The company and all of other sector operate in a larger macro environment of forces that shape opportunities and pose threats to the company. The factors are outside the control of the business.

PEST Analysis

Pest analysis is very important that company considers its environment beginning the marketing process.

Political Environment

This refers to the government policies that affect business such as government regulation, privatization policy etc…

It is important for CBL to have good relationship with the government, and since the government controls legislations such as importing and distributing limitation and product safety and etc. The company is in favour of the political environment under “Mahinda Sinthana” obtained machineries to upgrade Srikas.

Economic Environment

This includes interest rates, taxation changes, economic growth, inflation and exchange rates. High interest- It affects the business because borrowing cost increase.

Inflation – It may provoke higher wage demands from employees and raise cost.

Tax – By paying National Development Tax the production cost will increase and price war between competitors.

Social Environment

It’s very important to be socially responsible because it basically creates an image for the company and its brands. At CBL takes this point as a main consideration to prove the customers with products with the assurance of quality. Which also comprise of demographic cultural aspects of the macro environment, these factors affect the consumer needs and these size of potential markets. The key factors are following:

Health consciousness

Population growth rate

Age distribution ( children)

Emphasis on safety

Career attitudes

Technology Environment

CBL has adopted technological changes in Srikas including product design and packaging. Consumer can order online and pay by credit card when ordered on as a bulk. Being advance in technology is very important because it basically help us overcome competitors, saves production cost, money, time and etc. Hence by adopting the new technologies will provide and overall company advantage.

SWOT Analysis

S- Strength

CBL has high Experience

New flavor – This flavor is not available in Sri Lanka and world wide

Knows how to manage resources without wastage

High quality product at an affordable price

Super- store and outlets located all over the island.

Well trained workforce – CBL engaged workers and appoint them after professional training

W – Weakness

Communication / language issues in providing labels to the country (CBL print on packet in English which is difficult to be read Singales and Tamils)

As it is new product so high level of borrowing cost and low rates of return

Undifferentiated products (in relation to the competitors)

O – Opportunities

Changing consumer taste

Technological Advance – CBL using the machineries produce more output in a short time

Less income tax is paid because it is a new product

Market trend is favourable – (most buyers are affected by the fast food so Srikas can achieve the market because it is 100% natural)

There is no exact substitute for the product available in the market

T- Threats

Srikas face lot of competition in the market

High cost of production (because it is newly launched product hence the opening cost is high)

Inflation in the economy

Competitors have superior access to channels of distribution

Consumer switching costs are high

Porter’s five forces

Threat of new entrants

Product differentiation

Economic of scale exist

Capital requirements

Threat of substitutes

Brand loyalty customers

High switching cost for customers

Power of suppliers

Raw material cost constitute more than 50% of the total expenses

Rivalry among Existing firm

High competition

Low profitability- (as it is introduction level)

Intense due to the entry of foreign firm

Bargaining power of customers

Increased choice – (high bargaining power)

Combined purchase power of shop, canteen and supermarkets

2.2) Market segmentation

A market is really a mass, homogeneous group of customers each wanting an identical product. Market segmentation is a technique based on the recognition that every market consists of potential buyers with different needs and different buying behavior. These different customer attitudes may be grouped into segments and a different marketing approach may be taken by an organization for each market segment.

The level of marketing segmentation for the Srikas would be the mass marketing which is the same product in the same way to all the customers. And the segmentation variables are as follows:

Geographic

Srikas would be marketed and distributed all island since it’s in the introduction level, after improvement according to the growth rate the product will be distributed to international market.

Behavior

Target market is made according to the patterns in which the people in the market live and spend their time and money. Buyers in a market will differ in their wants, resources, locations, buying attitudes buying practices and any of these variables can be used to divide a market.

Demographic

Males and females

Srikas targets mainly for children

Suitable for all race and nationalities

Psychographic

Everybody can afford to buy it because it is 23/= so no need to consider income level.

2.3) Target Market Strategy

Single segment strategy

Since Srikas is on the introduction level. By concentrated on the single strategy for it is served with one marketing mix could save the cost of marketing. Hence the Srikas reaches the maturity stage the target market strategy could be changed.

Selective specialization strategy

In this strategy, several marketing mixes are implemented in different segment. The Srikas is marketed differently in different segments, which is why this target marketing strategy is also known as differentiated strategy.

Product specialization

Srikas manufactured is customized and then marketed, so as to cater to different market segments.

Market specialization strategy

In this form of target marketing CBL first finalizes the market segment it wishes to cater to and then manufacture a variety of products exclusively for this segment. Srikas’a target market is children.

Full market coverage strategy

Srikas use this strategy when it would be serve the mass market. This means a single marketing mix combination can be used or even several marketing mixes are used to cater to segment made in this entire market.

2.4) Buyer behavior affects marketing activities

Personal

Everybody can eat Srikas but the company’s target is for children. But now Srikas is going to increase the sale teenagers are different varieties.

Physiological

Most of the people believe the chips are not healthy food but Srikas definitely change the trend of buyers. Due to its natural ingredients added. To the expectation of people Srikas is less than other chips.

Social Factor

A customer’s buying behavior is also influenced by social factors, such as the group to which the customers belongs and social status. In a group, several individuals may interact to influence the purchase decision. The typical roles in such a group decision can be summarized as follows;

Initiator- the Srikas consumers are children

Influencer – a person whose view or advices influence the buying decision

User- Srikas’s customers his or her all families used the aloneness

2.5) Positioning

CBL contains Halal certificate, ISO standard, SLS standard and super brand award these give power of quality for their products and give the customer confident. Srikas differentiate in flavor; packet colour and product design from the competitors and build credibility. Company website has more information about Srikas and customers can share their comments of the Srikas at Face book, Yahoo, and Twitter. In which helps to maintain a good position in customers mind.

3.1) Product

It is the complete bundle of benefits or satisfaction that buyers perceive they will obtain if they purchase Srikas. It is the sum of all physical, psychological, symbolic and service. Srikas would be comparatively the cheapest among the other competitive products. Since it is the introduction level each packet consists 16g being 1g more than the ordinary packets.

Quality

The quality of Srikas is ensured like all the other products produced by Ceylon Biscuit Limited. CBL are trusted with high quality products from the Srilanka. As for the srikas the quality assured by the Health Department throughout the production process itself.

Features

The ingredients added to make Srikas is from Srilanka. The ingredients added are not only tasty but also gives energy. By eating these Srikas the children are protected from other diseases because bitter guard is a good killer of all germs. As such the company is making use of bitter guard in a special way. Black gram is used for energy Tapioca for taste and honey for sweetening.

Brand

The product Srikas is manufactured under the well-known brand CBL from Srilanka. This is famous worldwide for its superior quality and variety of biscuit products.

Packaging

The product of Srikas is packed in pink colour which gives an attraction to the small children and it doesn’t pollute the environment because it is made of paper.

Services

The services are available only to the retailers who will get free delivery of the product and later on according to the improvement of sales will be provided with designer self and name board of Srikas.

Figure

Potential Product

Generic Product

The Core Benefit

Figure

The core benefit – to satisfy the nourishment

Generic product – Srikas

Potential product – In future the company will add more fruits flavor example strawberry and pineapple

3.2) Place

The coverage of the product would be developed area such as cities but once the products has reached a higher market share than the distribution could be take place in rural area and sub rural areas. Srikas is available for all supermarkets, retailors shop and school canteens.

Distribution Channel

Manufacturer Retailer Customers

Srikas want improve its distribution channel because now it is in introduction level after the growth stage it will increase the distribution channel and distribution coverage.

3.3) Price

The Srikas would be penetration pricing because it involves the setting of lower, rather than higher prices in order to achieve a large, if not dominant market share. The Srikas would be 23/=. This strategy is often important for the entry of new market to build on a relatively small market share. This will only be possible where demand for the product is believed to be highly elastic.

Penetration pricing, the price for the product is set artificially low in order to gain market share. Once this is achieved, the price could be increased.

Introducing different sizes of product cans in different prices and local pricing strategies to cope up with the global competitors.

Figure

Price must reflect the relationship of supply and demand within the market place.

3.4) Promotion

Promotion is a very important part for the Srikas because it needs to create awareness to do this wide range of techniques could be used to communicate with Srikas target market. CBL will be using the follows promotion activities:

Advertising

CBL uses famous cricketer Shangahara for its commercial advertisement as a children are interested in cricket it encourages them to buy the Srikas. Its advertising will telecast in Sirasha, Shakthi and MTV on Cartoon programme time its daily reach very soon among the younger’s they like to watch cartoon.

Sales promotion

With each packet complement packet is attached. The complement packets are stickers, spider man, Benton and babie. If 25 empty packets are sent to CBL a draw-lot is done and the first three are taken to ‘leisure world’ children’s park. These encourage the children to buy more packets.

Public Relations: Doing press conferences and press releases of the launch and product sponsoring children activities and such

Direct mailing

Collect the mail ID of costume and send the detail of product…..

Free gifts

CBL provided some free gifts with small kits and any other child foundations….

Advertising on Facebook

Advertising on facebook is a nice way to introduce Srikas……..

Poster

Poster is an easy for everyone. Because some peoples are don’t have time to see a television and newspaper but the poster are often read by more than one reader. So CBL published colorful posters.

Promotional mix elements push and pull strategies, advertising above and below the line including packaging, public relations and sponsorship, sales promotion, direct marketing and personal selling, branding, internet and online marketing 

Promotional Mix

Personal Selling

Direct marketing

Sales Promotion

Public relation

Advertising

Internet E-Commerce

3.5) Extended marketing Mix

Figure

People

Creating a strong powerful sales team, covering the whole island. Developing the relevant technology among the workplace and factories, providing the staff with the professional training.

Process

Introducing online presence for each product, to begin acquiring the relevant technology.

Physical evidence

CBL employees are wearing same uniforms and it’s refers the company name to the public. CBL sales vehicles are painted by company name.

LO4) Marketing Mix in different contexts

4.1) Ansoff’s Matrix

Market Penetration

Product Development

Market Development

Diversification

Product

Market

Figure

Marketing penetration – customer’s value improvement (Increase customer satisfaction by decreasing cost to serve and increase the product quality.

Product development – Adding value of existing increasing the product quality

Market development – New customer segments

Diversification – diversification into related business.

CBL’s new product Srikas is facing wide range of market in Srilanka. At present people expect different taste and healthier food in the new lifestyle since the Srikas has natural flavor with different ingredients mixed together to give the customers a satisfaction on this product. At the movement the target market for teenagers. At present the Srikas price is low as it is in the introduction level but the price will increase at the growth level. Srikas is being distributed all island wide. The flavor used in Srikas is not available worldwide but only in Srilanka because all these ingredients are obtained from Srilanka from this the CBL will get an opportunity to enter the international level. When the Srikas enter the international market the CBL will change the marketing mix. As such flavor is added for additional taste and naturally the price will increase because of the competition in the international market.

4.2) Differences in marketing products and service to business rather than consumers

B to C Market

This is business to consumer marketing (B2C). A consumer decision process as having five stages as follows;

Problem recognition- as purchasing is a problem solving process

Information searching- the consumer may perform this search informally in terms of memory of past experiences.

Evaluation of alternatives by the consumer- this should be reflected in the marketing mix

Purchasing decision- the consumer decides which brand or product to buy.

Post purchase evaluation- the company will be interested to know if the customer is satisfied with the product.

CBL is not directly marketed to their customers. It is distributed through the retailors.

B to B Market

Some firm market products to intermediary firms, rather than to ultimate customers. Therefore, the marketing mix of the firm should target the intermediary firm.

Benefits of B2B

Outsourcing the unprofitable parts of our business

Speeding up our product development activities –

Reducing time to market

Improved business and market intelligence.

Understanding our market better than our competitors

Cloning our business in further markets

Improving the speed of communication

Facilitating communication between our customers and suppliers

Reducing wastage through additional sales channels

How does B2B marketing differ from B2C

In B2B customer relationship is more important than B2C

The types of order will be different. B2B customers place bigger orders and there will be repeat orders

B2B customers will expect trade credit whereas in B2B transaction credit may not be given as customers are individuals.

4.3) How international market differs from domestic market

International marketing can be defined as the application of marketing strategies, planning and activities to external or foreign markets. International marketing is of consequence to firms which operate in countries and territories other than their home country, or the country in which they are registered in and have their head office. The factors influencing international marketing are culture, political and legal factors, a country’s level of economic development, and the mode of involvement in foreign markets

The CBL is located in domestic market. Its follow srilankan policies and regulation. CBL distributed Srikas in all island wide. Compare to the international market it face less competitors in domestic market it is opportunity to increase the market share.

Conclusion

The Ceylon Biscuit Limited is a leading company in Srilanka. CBL’s new product Srikas can achieve the expect market share. The assignment gives more information about Srikas. Now Srikas is in introduction level. The company satisfies the customer through the Srikas. Srikas is being distributed all island wide but the distribution channel will expand at growth level.