Marketing Term Report – Reckitt Benckiser
Marketing Term Report – Reckitt Benckiser
Reckitt & Colman is a global consumer products company which manufactures and markets excellent household brands worldwide.
To really make a difference, they believe in acquiring and nurturing only the most
dynamic and aggressive people to bring their products to their customers.
The following includes their key brands and the major product categories that make their business worldwide
Within each product category there is a range of their brand portfolio and the key international markets where they have a presence:
- AIR CARE
- LAVATORY CARE
- SHOE CARE
- ANALGESICS, COLD/FLU
- FLOOR CARE
- FABRICS CARE
- PEST CONTROL
- SURFACE CARE
When we talk of their fabric care products the major categories included are mentioned below :
- SPRAY,N WASH
Robin is a long established brand. Today’s range includes detergents, fabric bleaches, fabric conditioners, ironing aids, laundry blue whiteners, stain removers and starches. They are available in following product ranges aerosols, cakes, liquids, powders, and triggers. The principle markets include
- Middle East,
- Europe, and
MACRO ENVIRONMENT DEMOGRAPHIC ENVIRONMENT
There are following features associated with the macro environment of the Reckitt and Colman private limited. We will discuss each of them in detail so as to give you a full idea of how it effects the product and how it caters to each of the consumer needs and behaviors
Demography relates to the study of age, size of the family, location, gender, occupation and other statistics. it is of vital importance for the strength of any company. RECKITT and Colman has also categorized its product on the basis of demographics. These are as follows:
It has divided the market into two income levels which are as follows:
- upper class 20000+
- b) middle class 12000+
They basically are trying to cater the needs of these people who are under these income levels.
“Any one who is any years old can use ROBIN BLEACH.” This was the information provided to us by the brand manager of RECKITT and colman private limited. However to be more precise they have tried to cater to the needs of people who are from 18_45 years of age.
People who are conscious of how they look would like to buy the product. So they must be educated enough to know what they want and what is the best that suits them. RECKITT has targeted at literate class who are at least matric pass.
Again they have chosen to divide their entire market into regions which are as follows:
- south Sind, Baluchistan
- central Punjab
- north NWFP
This helps the people at RECKITT to categorize their products well in to the potential markets.
Since washing is the job that is being consider as woman’s work, obviously RECKITT has decided to work towards attracting the housewives. They have shown advertisements and adds all catering to the housewives narrating their experience.
Mostly white clothes are needed in the summers that’s where the robin bleach comes. The seasonal environment strongly effects the company as their sales decline more than half during the winters when there is less demand for white clothing.
Reckitt and Colman has catered to those customers who value relationships and have deep family instincts. They would like their consumers to be fully satisfied with their products and also cherish using their products.
The need for the product is mostly on the need basis however some people use it habitually so the company should keep in mind that it should provide customers with both these qualities so as to provide them with satisfaction.
According to the survey there are 6-7 people per family size and RECKITT has to keep its product according to that need of the people.
RECKITT has the ability to adapt to the local economic environment. It has managed to strive and stay profitable even during the days of slumps. There is not much government pressures on the company. Since all the materials are locally manufactured, there is no excise duty. Other than that they have 15% sales tax on all the products which they do not find objectionable.
RECKITT gets all its major raw materials from Faisalabad. The formula which they use is originated in South Africa but it is now being locally manufactured here in Pakistan. There are 2 basic raw materials which the company uses and they are a) hypochlorides b) de-ionised water both of these are manufactured locally and then the bottles are packed in Karachi however the labels are prepared in Lahore. The company has the ability to cater to any problems that occur on the way and can deal if there are any shortages in the raw materials or if the demand of suppliers vary.
People in Pakistan have strong cultural ties and therefore they are greatly influenced by their cultural needs and demands. RECKITT has tried to adapt itself according to Pakistani culture. It has been an international company but it has made suitable changes to go with the conditions in Pakistan. People in Pakistan value cleanliness as it has been declared an essential by our religion. Keeping this core factor in mind, they have tried to augment it by providing tools that help the Pakistani people achieve their desired benefits.
RECKITT is in the process of producing a new bleach which is basically the product which we have taken for our marketing report. Since it has seen how the customer needs and demands changes with the advances in the field of technology, it has always been the first one to introduce new products or to give its existing products new features so that the old product does not loose interest among the public.
RECKITT has basically 3 major competitors which are :
- JAVEN- COLGATE
major threat to Reckitt has always been the unbranded products because they are most easily available products and because consumers find them cheaper and easier to use. Some people do not like the way the nosle of the bottle is operated therefore they are hesitant to use them. Basically these are the ways macro environment effects the way a company operates its business.
The product Robin Bleach, historically belongs to South Africa, since the demand of the product in Pakistan has been increasing during the last few decades therefore the need to produce the product locally becomes inevitable. The chemicals required for the production of Robin Bleach are Hypochloride, DI Water and Caustic Flakes. All of the raw materials are obtained by exploiting local resources. Hypochloride, DI Water and Caustic Flakes are obtained from Faisalabad, bottles from Karachi where as labels form Lahore.
Marketing intermediaries includes the retailers and whole sellers. The company has marked Karachi, Lahore and Islamabad as their top three areas to concentrate their product. In Karachi the retailing outlets are in Clifton, Defence, Nazimabad, F.B Area, Gulshan –e-Iqbal, KDA scheme, PECHS etc. The company cannot afford to establish their retailing outlets in lower middle class areas due to the unmatchable competition with the unbranded product producers. The financial intermediaries include the financial institutions that have provided financial assistance to the company. These includes ANZ Grindlays, Bank of America, City Bank, Habib Bank Limited, Muslim Commercial Bank and Standard Chartered.
Mostly the quality washing is required in the urban areas of the country; the product is therefore primarily targeted to the housewives of these areas. Since the need of the product arouses in educated and comparatively highly salaried group it has therefore been focused to the upper class part of the society, enjoying income more than Rs.12000 a month.
The retailer market includes retailer and wholesalers both. They performed the job as has been specified in the retailing section.
The Robin Bleach has been successfully launched in Australia, India Middle East, Nigeria and Pakistan. The biggest market share for the product comes form South Africa.
Robin Bleach like all other products have a number of competitors marketing their product as branded or unbranded. The branded competitors include ACI, Colgate Palmolive and Proctor & Gamble. However the main competitors of Robin Bleach are those marketing their product as unbranded (khula) Bleach. The producers of unbranded bleach easily adopt winning strategies, which sometime cannot be used by the big firms.
Publics are those groups who assist the company to launch its product in the local market. They help the companies to achieve their organizational objectives.
The financial publics include ANZ Grindlays, Bank of America, City Bank Habib Bank Limited, Muslim Commercial Bank Limited.
Media Public comprises of the advertising agencies like newspaper, magazine, radio, television, billboards and WEB sites etc. The company has made a new commercial for relaunching Robin Bleach that will be on air in the Tele-media in next few weeks.
The internal publics consist of workers, managers and board of directors. Newsletters are used to inform and motivate the internal public. They need to be motivated to reflect a positive effect on the external public.
The marketing process of Reckitt and Colman is divided into a strategic and a tactical phase. The strategic phase has three components—segmentation, targeting, and positioning (STP). The organization must distinguish among different groups of customers in the market (segmentation), choose which group(s) it can serve effectively (targeting), and communicate the central benefit it offers to that group (positioning).
The marketing process includes designing and implementing various tactics, commonly referred to as the “marketing mix,” or the “4 Ps”: product, price, place (or distribution), and promotion. The marketing mix is followed by evaluating, controlling, and revising the marketing process to achieve the organization’s objectives that is to introduce the new and improved Robin Bleach and to shorten its introductory stage.
The managerial philosophy of Reckitt and Colman puts central emphasis on customer satisfaction as the means for gaining and keeping loyal customers. Marketers of Reckitt and Colman urge to carefully and continually gauge target customers’ expectations and to consistently meet or exceed these expectations. In order to accomplish this, everyone in all areas of the organization must focus on understanding and serving customers; it will not succeed if all marketing occurs only in the marketing department. Reckitt and Colman also want their organizations to move from practicing transaction-oriented marketing, which focuses on individual exchanges, to relationship-driven marketing, which emphasizes serving the customer over the long term. Simply getting new customers and losing old ones will not help the organization achieve its objectives.
Here Reckitt and Colman have local competitors. Hence there are more goods and services than consumers need or want, Reckitt and Colman must work harder to convince customers to exchange with them.
THE MARKETING PROCESS
The marketing process consists of four elements: strategic marketing analysis, marketing-mix planning, marketing implementation, and marketing control.
The aim of marketing in Reckitt and Colman is to meet needs profitably. Companies must therefore first define which needs—and whose needs—they can satisfy. A key step in marketing strategy, known as positioning, involves creating and communicating a message that clearly establishes the company or brand in relation to competitors.
Having developed a strategy, a company must then decide which tactics will be most effective in achieving strategy goals. Tactical marketing involves creating a marketing mix of four components—product, price, place, promotion—that fulfills the strategy for the targeted set of customer needs.
Reckitt and Colman by integrating the marketing elements, can more efficiently utilize its resources. Instead of individually managing four or five different promotion processes, the company manages only one. In addition, promotion expenditures are likely to be better allocated, because differences among promotion tools become more explicit. This reasoning has led to integrated marketing communications, in which all promotional tools are considered to be part of the same effort, and each tool receives full consideration in terms of its cost and effectiveness.
Product Planning and development
Robin name is famous for 50 years. Robin is an umbrella brand of fabric brands. The first marketing-mix element is the product, which refers to the offering or group of offerings that will be made available to customers. Launching a new product is a good idea since there are good number of consumers who are brand loyal. Consumers want the brand to have trust-worthiness which is guaranteed by Reckitt and Colman.
In traditional economies, the goods produced and consumed often remain the same from one generation to the next—including food, clothing, and housing. As economies develop, the range of products available tends to expand, and the products themselves change.
In contemporary industrialized societies, products, like people, go through life cycles: birth, growth, maturity, and decline. The development of new products involves all aspects of a business—production, finance, research and development, and even personnel administration and public relations.
Taking advantage of previous investments, Robin bleach is introduced. Robin Bleach was first introduced in Nigeria and after its success it is planned to be introduced in other countries including Pakistan. One of the most important feature of this product is FABRIC SAFETY. This feature is also giving Robin bleach a differential advantage. This feature is augmenting the main functions of the bleach. Other important features are:
- Improved stain Removal
- Germ Killing
- Non-Irritant to skin.
The features are stated preference wise. Robin Bleach planned to market their product emphasizing on FABRIC SAFETY.
A key step in marketing strategy, known as positioning, involves creating and communicating a message that clearly establishes the company or brand in relation to competitors. The needs of the target market is always considered and that is why Robin Bleach is introduced to satisfy target market. The positioning of Robin bleach is done on the basis of product attribute that is Fabric Safety .
Product Mix expansion
Product Mix expansion is achieved by adding Robin bleach to an existing product line of Robin that is offered by Reckitt and Colman to customers. The product line of Robin include most famous Robin Neel which alone has 80% awareness in whole Pakistan
There are many types of bleach available in market. They are mostly open bleaches that are sold . They are developed and manufactured locally for local market.
Brands, Packaging and Other Products
Packaging and branding are also substantial components in the marketing of a product. In order to gain the competitive edge, brand mark of Robin is intended to identify the product from local products and to differentiate the product from competing products. The importance of packaging in the distribution of the product has increased with the spread of self-service purchases—in wholesaling as well as in retailing.
Reckitt and Colman rely strictly on their own brands since it is very large, well financed and well managed organisation . It has broad product lines as well as well-established distribution systems and large shares of market.
The product uses family packaging since Robin bleach uses highly similar packaging of bleach. The packaging is done in a bottle shape and is easy to use. Hence packaging is designed to facilitate the use of the product. For example the cap of the bottle indicates the amount of bleach to be poured which is widely used by housewives.
Labeling of Robin bleach is done in a similar fashion. Blue Robin is used as the brand label that is applied to its package. The descriptive label Robin Bleach gives the information about the product use. Labeling is done to provide information about the care, performance and other pertinent features of the product.
The blue color is adopted because fifty years back blue gives brightness and coolness. This is derived from the formulation that the color of water is blue and thus it gives an image to the consumers about Robin products.
Marketing a service product
The same general marketing approach about the product applies to the development of service offerings as well. In creating a successful service mix, Reckitt and Colman choose features that are preferred and expected by target customers, or the service will not be valued in the marketplace e.g. FABRIC SAFETY.
Price is considered by many to be the key activity within the capitalistic system of free enterprise. The market price of the product influences the wages, rent, interest, and profits. Price thus is a basic regulator of the economic system since it influences the allocation of the factors of production. The price of the product is a major determinant of the market demand of the item. It affects the firm’s competitive position and the share of the market. As a result, price has a considerable bearing on the company’s revenue and net profit.
The price of a product also affects the marketing program. Sometimes, due to differentiated product features or a favorite brand the effect of price on the demand of the product may be very less. In these cases the prices are more rigid or “sticky”- that is less responsive to the forces of demand and supply.
DEFINITION OF PRICING
Price is the amount of money and/or other items with utility needed to acquire a product. In other words, price is the value expressed in terms of dollars and cents, or other monetary medium of exchange. Utility here refers to the attribute of an item that makes it capable of want satisfaction while Value is the quantitative measure of the worth of a product to attract other products in exchange. One 500-ml bottle of Robin Liquid Bleach is priced at RS.19.50. This includes 15% sales tax and excise duty.
Thus the relationship between utility, value and price can be shown by the following flow chart.
PRICE – PRODUCT – QUALITY RELATIONSHIP
Pricing also has a psychological affect on the demand of the Robin Bleach. The customers rely heavily on price as an indicator of a product’s quality, especially when they must make purchase decisions with incomplete information. Studies have consistently shown that the customer’s perceptions of the product quality vary directly with the price. Thus higher the price, the better the quality is perceived to be. Reckitt & colman has known this fact and that is why the new Robin Bleach is priced slightly higher than the khula bleach. Good value indicates that a product has the kinds and the amounts of potential benefits – such as quality image and convenience. Reckitt & Colman offers these potential benefits in all of its products.
Nine Price Quality Strategies
Reckitt & Colman follows the high-value price strategy i.e., it has medium price but offers high product quality.##
A company usually is pricing the combination of
- The specific good or service that is the object of the transaction. Here it is the 500-ml bottle of Robin Bleach.
- Several supplementary services such as the warranty that Robin Bleach will remove stains and bring whiteness to the cloth.
- The want satisfaction benefits provided by the product. In the case of Robin Bleach it is the fabric safety.
PRICING OBJECTIVES OF R& C
The pricing objective selects must be compatible with the overall goals set by the firm and the goals for its marketing program. All the objectives are aimed at satisfactory performance in the long run. The major pricing objectives of Reckitt & Colman are as follows:
- Profit oriented
- To maximize profit
- Sales oriented
- To increase sales volume
- To maintain or increase market share
PROFIT ORIENTED GOALS
The most important objective of any business is to maximize profits. Reckitt & Colman is also a profit oriented firm. It tries to set the price that will maximize the profits. It estimates the demand and the costs associated with the alternative prices and choose the price that produces maximum rate on investment or cash flow. Reckitt & Colman also takes into account the affects of other marketing-mix variables, competitors, and legal restraints on the price.
A profit maximization goal is likely to be far more beneficial to a company if it is pursued over a long term. For this the firms even have to suffer losses in the short run. Re-launch of Robin bleach has been initially done by giving a discount of RS. 2 against the retail price of RS. 19.50. This has been done inorder to build a large clientele. Repeat purchases from this last group of customers will allow Reckitt & Colman to maximize its profits in the long run.
RELATIONSHIP BETWEEN PRICE, REVENUE MARKET SHARES AND PROFITS
Usually the firms price the product to achieve rapid growth or to discourage other firms entering the market. Reckitt & Colman has also been aiming to increase its sales volume. The sales of Reckitt & Colman showed a downward trend in the past few years. Management seeked higher sales volume by adopting discount or aggressive price strategy. Robin Bleach offers a discount of RS. 2 on its 500-ml bottle. Such discounts have greatly helped boosting up its the sale volume. Reckitt & Colman is willing to incur a loss in the short run in order to expand sales volume.
INCREASING THE MARKET SHARE
The pricing objective can also be to increase or maintain the market share. Reckitt & Colman have decreased its cost of production so as to increase its share in the market. For this the firm needed to increase its production so as to gain the advantage of the economies of scales and by the relaunching of Robin Bleach in the market with new added features like fabric safety, has been able to achieve its objective.
FACTORS THAT INFLUENCE RECKITT & COLMAN IN PRICE
In pricing, the company must estimate the total demand for the product. This is easier to do for an established product than for the new product. Thus the demand for the Robin Bleach was determined at different prices that the customers were willing to pay. Expected price, which is the price at which the customers are consciously or unconsciously value a product, of Robin Bleach is RS. 19.50.
Competition greatly influences the price of the product. Reckitt &Colman faces the competition from ACI, Javis and Colgate Palmolive. Besides these branded bleaches robin bleach has the biggest competition with unbranded or the khula bleach. It also faces competition from the other available substitutes in the market like the different detergents. Reckitt & Colman has to adjust the price after taking into consideration all these external threats.
Price Relation Program For Meeting A Competitor’s Price Cut
Other marketing mix elements
Price changes need to be made as the product moves over its life cycle to keep it competitive. Robin Bleach is currently at its introductory stage where the company has given discounts as an initial offer. The type of the distribution channel also affects the producer’s price. The extent to which the product is promoted is another consideration in setting up the price. The major responsibility of promotion is on the producer in the case of Reckitt & Colman therefore the price is charged slightly higher.
Price competition is present when a company is engaged in regularly offering the products priced as low as possible and accompanied by a minimum of services. Reckitt & Colman took up this strategy and offered low prices in the market. It is also practicing value pricing. This form of price competition aims to improve a product’s value – that is, the ratio of benefits to its price and related costs. To implement value pricing, Reckitt & Colman offers 500-ml bottle of robin bleach at low prices but with more benefits and at the same time is seeking ways to slash expenses so that profits don’t suffer.
Apart from the price competition, Reckitt & Colman also takes into account the non-price competition. It is trying to approach the brand equity of the customers for the new liquid Robin Bleach. To achieve this objective, Reckitt & Colman has developed new distinctive, unique Robin Bleach and has taken up an appealing promotional program. The distinguishing features of New Robin Bleach are whitener, germ killer, improved fabric safety and non-irritant to skin.
MARKET PRICING STRATEGIES
Reckitt & Colman has adopted market penetration strategy. In market penetration, a relatively low initial price is established for the new product. The price is set lower than the expected market price of the target market. In doing so, Reckitt & Colman has been successful in increasing the sales volume and the market share of Robin Bleach. It has adopted this strategy because the demand of Robin Bleach is highly elastic, economies of scale are possible and fierce competition already exists in the market.
Reckitt & Colman offers introductory or the seasonal discount to its customers. When Reckitt & Colman launched its product in the market, it offered a discount of RS. 2 on the bottle costing otherwise RS. 19. This was done as an introductory price.
GEOGRAPHIC PRICING STRATEGY
Reckitt & Colman has to take into account the freight charges to deliver robin bleach across the country. It is supplied in all the parts of Pakistan. Reckitt & Colman uses uniform delivered pricing strategy. According to this strategy, the same delivered price is quoted to all the buyers regardless of their locations. This strategy is sometimes also referred to as postage stamp pricing. The transport cost are a small part of the total costs of the producer therefore, Reckitt & Colman adopts this strategy.
ONE PRICE STRATEGY
The company has adopted a one price strategy, which aims to charge the same price to all similar customers who but identical quantities of a product. It has helped to build customer confidence in the producer since he doesn’t have to worry about the low prices paid by the other customers. The week bargainers are at an advantage due to this strategy.
Odd pricing is a form of psychological pricing strategy. In this case, the producer sets prices at uneven (or odd) amounts. This has also been done by Reckitt & Colman by setting the price of Robin Bleach at RS. 19.50 rather than at an even amount of RS. 20.
what is DISTRIBUTION?
Since ROBIN BLEACH is a new product, a lot of emphasis has been given on the right distribution strategies in order to make the product a big success. Let us now take a deep analysis of what distribution means to people at Reckitt and Colman and how do they desire to make it a differential advantage over its competitors.
What is a distribution channel
A distribution channel is used to move goods and services from producers to consumers. It tries to overcome time place and possession gaps that separates goods and services from the consumers. An effective channel of distribution should include both the producers and the consumers. However now that the marketing horizon has been broadened people are quick to realize the importance of adding wholesalers and retailers I the process as well.
Functions of marketing channels
There are basically 5 functions that members of marketing channel in Reckitt and Colman perform. These are:
information involves gathering and distributing marketing research and intelligence information where it is most needed. At Reckitt there was first a thorough research done on what was the best way to reach the consumer through various distribution strategies and then it was implemented.
promotion makes or destroys your product. So what should the member of marketing channel do is gather and develop a persuasive communication about an offer i.e. let the people know what they dont now about the product and then act accordingly.
in establishing contact, you find and then effectively communicate with potential buyers. It means that you make the product known to them. Sometimes this is done very effectively through teaser advertisements as well.
“A company without distributors”
“A company with distributors”
in this you keep in mind the way your buyer wants the product. The brand manager at Reckitt was telling us that when they were launching robin bleach, they thought of all the possible appeals to the consumers and the one that they thought was really lacking in other bleaches was good fragrance and skin care element so they have now added these features as differential advantages in their product.
once you have decided what the buyer want, you reach an agreement on price and other terms that ownership or possession can be transferred.
Reckitt and Colman uses both types of marketing channels. It includes the
- direct marketing channels
- indirect marketing channels.
A marketing channel that has no intermediary levels is known to be a direct marketing channel. Reckit has adapted this strategy by using direct supply of product to some of their consumers. This includes direct door to door services or through homes or offices etc.
where as any channel that contains some intermediaries are known as indirect marketing channels. Reckitt has some very reliable and effective intermediaries which have been handling their affairs for the past many years (we were not told of the exact names) the fig1 of distribution shows that when Reckitt uses more intermediaries, it reduces the number of its channel transactions whereas it has to interact more with other people if ii uses a direct marketing channel.
Basically the channel of distribution for Robin Bleach that Reckitt and Colman have used is as follows
“ FIGURE II ”
We can see from the above figure the way Reckitt has used its marketing strategy for the Robin Bleach. The product after being manufactured, goes to small agents who are then give the product to larger wholesalers. After wholesalers, it moves to retailers and lastly after reaching the retailers, they move to the consumers.
This is how Robin Bleach is distributed through out Pakistan. Even a small product like Robin Bleach has to pass through this whole process because Reckitt believes in everything to be best. By engaging a large number of wholesalers and retailers, it aims and targets at the more effective and efficient promotion of the product. We will discuss the role and advantages of the retailers and distributors after while in detail.
VERTICAL MARKETING SYSTEMS
Reckitt and Colman uses a contractual vertical marketing system. It means that independent firms at different levels of production and distribution are joined together through contracts.
Mr. Asif told us that it is necessary to have a contractual vertical marketing system in Reckitt because there are some services that are provided by the individuals better. Not one company can be broad or sufficient enough to fulfil all the needs and requirements associated with the distribution and promotion of the product, so different firms join hands together for the effective functioning.
Factors effecting choice of channels
there are various factors that effect the choice of distribution channel. The main distinctive features that Reckitt and Colman use for Robin Bleach are as follows:
First of all there is the analysis of the target market. It means that the people at the company decide and make assumptions on the type of the consumers that are willing to buy their products.
a). Type of the market
Robin Bleach is a consumer product. Therefore the market that Reckitt has targeted at is the households. They have kept other factors like education levels, income levels, weather, seasons, status, gender as well in mind which we have discussed in detail in the macro environment. After setting the target market, they set their distribution policies accordingly.
b). Number of customers
since Robin Bleach is aimed at households as well as some laundries etc., the distribution includes both the direct selling and sales through retailers.
c). Geographical concentration of the market
Since potential consumers of Robin Bleach are located all over Pakistan., it is not feasible to use direct distribution strategies. They have different distributors and retailers all over Pakistan with whom they have been doing business for quite some time now.
D). Order size
Distribution strategies also depend a great deal on order size. The larger the order size, the more feasible is the direct distribution techniques. Reckitt has seen that this strategy is used in case of larger orders whereas for smaller ones, distribution through agent is done.
While forming the distribution strategies there are also a number of things which are to be considered. For Robin Bleach these are as follows:
since Robin Bleach is not a very expensive product, it is distributed through agents or middlemen. However some times exceptions are made for large orders as well.
as in case of Robin Bleach, it is used more frequently in summers when white clothes are more in vogue. Therefore Reckitt sees to the fact that the product is essentially distributed effectively during the season.
C). Time Period:
there is no consideration of time periods. Because Bleach is something that does not expire, it does not require any special distribution as in case of perishable products like milk etc.
Some times things may not go the way you have predicted them to go. If this happens, middlemen play a major role in it. Reckitt reckons the following decisions while choosing an effective distribution channel.
A). Services Provides By The Middlemen
While choosing an appropriate middleman, Reckitt and Colman sees to the fact that he is providing the following two services:
- should be adequate
- should be feasible
With adequate it means that the middleman should posses are the necessary skills and requirements needed for the distribution of the product. It includes the proper delivery, knowledge about the product and also the knowledge about the inventory.
Other than that the middleman should be feasible to the company. It means that the cost of hiring a middleman should not exceed the benefits derived from it.
Reckitt also has some considerations before choosing the right distribution channel.
a). Direct Control
Since it wants to keep in contact with the most valuable consumers and customers, they use direct selling to some of them, specially the one with large order sizes.
b). Financial resources
the cost of the distribution channel should be feasible enough. It means that it should exceed the budget that is allocated for the distributions every year.
INTENSITY OF DISTRIBUTION
the intensity of distribution in case of Robin Bleach is INTENSIVE. It means that efforts are made in order to make it available at every store and retail outlet where consumer products are being sold.
We know that intensive distribution is usually for consumer product or for convenience good and since Robin Bleach comes in the category of both, we use it for intensive distribution. However Reckitt and Colman does not use an intensive distribution strategy for every product. Robin starch is available at only selective retail outlets.
PHYSICAL DISTRIBUTION AND LOGISTICS MANAGEMENT
In today’s scenario selling a product is sometimes easier than getting it to the consumer. Companies must decide on the best way to store, handle and move their products so that they are available to customers in the right assortments, at the right time, and in the right place. This is called logistics management. Logistics effectiveness will have a strong and major impact not only on the customer satisfaction but also on the company costs. A poor distribution is sure to destroy an otherwise good marketing effort.
The figure on the next page shows how the Robin Bleach is physically distributed. The product after being manufactured in the factory, goes to the agents and passing through wholesalers and retailers, it reaches the final consumer as shown.
Logistics are basically concerned with the “4 P’s” of the marketing mix. Reckitt and Colman has kept this thing in mind that the placing, pricing, promotion and product are all well planned and easily available to the consumer in order to avoid inconvenience.
Bleach is not something as urgently needed as medicine therefore the emphasis is not on speedy delivery but on delivery at the right time and at the right reordering level. The goal of logistic system should be to provide a targeted level of customer at the least cost. The company should have effective logistics objectives to guide its planning. For e.g. In case of Robin Bleach right amount of order size and the right time and placement are a major issue that are to be kept in mind.
“PHYSICAL DISTRIBUTION (logistic management)OF Robin BLEACH”
this is how the distribution strategies at Reckitt and Colman are set so as to provide the best service to the customers at the least cost and also for the effective management of the company.
what iS retailing
retailing is the sale and all activities related to sale of goods and services to ultimate consumers for personal non business use. Similarly retailers are those whose sales are associated primarily from retailing .
RETAILERS CLASSIFIED BY MARKETING STRATEGIES
Robin Bleach is a consumer product a convenience item, it is easily available at all the retail outlets. In Pakistan although the stores are nor classified the way they are done abroad, therefore sometimes it becomes difficult for a company to estimate the exact retailers it would like to have. But talking in general terms the brand manager at Reckitt told us that these are the following categories in which the stores are classifies tentatively. We will see each of them one by one.
“CLASSIFICATION OF RETAIL STORES OF Robin Bleach”
Basically departmental stores are those in which the largest variety of products are available. These are situated usually at areas where there are thickly populated and therefore easily accessed by everyone available in that vicinity.
Some departmental stores that have Robin Bleach are Kenhill, H.Karim Baksh Lahore. These stores do not provide price concessions but theses are highly likes by the people as they are situated in the thickly populated area and shoppers who usually buy their purchases at the beginning of every month find it easy to purchase from these stores.
Robin Bleach is also placed at such stores with the view that it will provide the customers with easy shopping facility and since people dont like searching for such a small product like Bleach, they wont have to go and buy some other brand.
These are also usually situated in good shopping vacinities. Examples of such stores are TES mart and Aghas. We were told that you will be able to find Robin Bleach there. As the aim is same to provide customers with easy access so that they do not have to go searching for the product too much.
The examples of such stores are various stores open by the petrol pumps. These include select(caltex), the shop (PSO), Mini mart( Shell). We went to check if these stores had Robin Bleach and found it on some of them. It was a surprise for us to see them at such places. However they were present at some major convenience stores like one opposite to city campus IBA and one opposite driving cinema.
Category- killer stores
these are a kind of limited line stores as shown in Stanton. Reckitt has its own retail outlets outside it factory and this is where they sell these products. We call them fair price shops. They exclusively sell the products of Reckitt and Colman.
in Pakistan the concept of general stores is also very common which is not very popular in countries abroad. They have different categories rather than having general stores. General stores are basically small stores that sell products of very basic necessities. These also include medicines and daily items for personal needs.
Robin Bleach is also made available in such stores. The basic purpose for retailing in Reckitt and Colman is that it should be available at every small store to maximise the convenience of the people and also to provide people with easy access to the product.
NON STORE RETAILING
Activities that result in transactions that occur away from a retail store is called non store retailing.
it includes door to door selling or personal selling. The samples of Bleach or the whole package of the products of Reckitt and Colman are sold at a special discounted price from the market. They use the samples of Bleach to give a practical demonstration of how effective the Bleach is and if the consumer feel satisfied with the product, they can buy it from their salesman.
Usually these activities are carried on in potential markets where there are chances to increase the sales. However at times these tests are also given in rural areas as these areas are basically not well informed about the existence of the product and how it operates. The villagers are therefore told how to use the product and where it can be bought from.
Direct selling also has other advantages for Reckitt. It provides them with the opportunity to know their customers response to the product and also it gives them a fair idea about what the customer wants more in it.
For consumers also direct selling has great advantage. It provides them with the opportunity to buy the product while sitting at home. Some potential customers do not go into the depth of the product while deciding to buy it. If they like the product they have bought from a sale representative, they might like to become a permanent consumer of the product.
These are the major points Reckitt and Colman keeps in mind when it adapts non store retailing as it wants to establish a direct link with its potential customers and also it wants to get a direct feedback from them.
direct selling is just a part of direct marketing. Direct marketing is using advertising to contact customers who in turn purchase products without visiting a retail store.
In direct marketing the customers are told about the product through mail, TV, news paper, magazines, catalogues and Internet etc. although Reckitt and Colman in Pakistan does not use any of the above mentioned direct marketing strategies, however we were told that these policies are used in the other countries of the world.
The reason these methods are not in Pakistan is because the people in Pakistan do not have enough knowledge of such practises due to low literacy rate. However as soon as there is little awareness among the people these procedures will be used here as well.
The example we were given was that in Pakistan there is no concept of buying from catalogues, which is a very important criteria abroad. So it cant be implemented in Pakistan. Since products are not insured or there is no system of suing if the consumer does not find the product to its satisfaction or the way it was advertised in the paper, people here are hesitant to buy the product without looking and touching it. Even for a small purchase like Robin Bleach, people are afraid to take the risk.
Also the delivery charges are sometimes higher than even the price of the product! Therefore until now Reckitt and Colman has failed to attract customers through direct marketing. However it will keep on trying though.
Promotion, the fourth marketing-mix element, consists of several methods of communicating with and influencing customers. Designing and managing the marketing-mix element to inform, persuade, and remind current and potential customers.
NATURE OF PROMOTION
The major tools are personal selling, advertising, sales promotion, and public relations. All of them are discussed below:
Sales representatives are the most expensive means of promotion, because they require income, expenses, and supplementary benefits. Their ability to personalize the promotion process makes salespeople most effective at selling complex goods, big-ticket items, and highly personal goods–for example, those related to religion or insurance
After the re-launch of robin bleach, the sales force visited various areas in Gulshan, north nazimabad and P.E.C.H.S. etc to build customer relationship, they gave out free samples and were asked to give their comments on the enhancements made in the product. A lot of finance was spent on it by Reckitt.
In few areas various supers stores were also visited by the sales representatives like Agha’s, Friendship. Salespeople are trained to make presentations, answer objections, gain commitments to purchase, and manage account growth
Advertising includes all forms of paid, nonpersonal communication and promotion of products, services, or ideas by a specified sponsor. Advertising appears in such media as print (newspapers, magazines, billboards, flyers) or broadcast (radio, television).The advertisements of Reckitt and Colman are shown on Television, Dawn news papers and brochures are also published. Robin bleach after is re-launch has adopted different advertisements both in news papers and T.V. Their latest advertisements are included in Appendix.
Their new slogan includes “ IMPROVED STAIN REMOVAL, WHITENING AND FABRIC SAFETY”. Print advertisements typically consist of a picture, a headline, information about the product, and occasionally a response coupon. Broadcast advertisements consist of an audio or video narrative that can range from short 15-second spots to longer segments known as infomercials, which generally last 30 or 60 minutes.
While advertising presents a reason to buy a product, sales promotion offers a short-term incentive to purchase. Sales promotions often attract brand switchers (those who are not loyal to a specific brand) who are looking primarily for low price and good value. Thus, especially in markets where brands are highly similar, sales promotions can cause a short-term increase in sales but little permanent gain in market share.
Alternatively, in markets where brands are quite dissimilar, sales promotions can alter market shares more permanently. This is due to a number of factors within companies, including an increased sophistication in sales promotion techniques and greater pressure to increase sales.
Several market factors also have fostered this increase, including a rise in the number of brands (especially similar ones) and a decrease in the efficiency of traditional advertising due to increasingly fractionated consumer markets. In case of robin bleach this sort of promotion is not that much followed.
Public relations, in contrast to advertising and sales promotion, generally involves less commercialized modes of communication. Its primary purpose is to disseminate information and opinion to groups and individuals who have an actual or potential impact on a company’s ability to achieve its objectives. In addition, public relations specialists are responsible for monitoring these individuals and groups and for maintaining good relationships with them.
One of their key activities is to work with news and information media to ensure appropriate coverage of the company’s activities and products. Public relations specialists create publicity by arranging press conferences, contests, meetings, and other events that will draw attention to a company’s products or services.
Another public relations responsibility is crisis management–that is, handling situations in which public awareness of a particular issue may dramatically and negatively impact the company’s ability to achieve its goals. Other public relations activities include lobbying, advising management about public issues, and planning community events.
Because public relations does not always seek to impact sales or profitability directly, it is sometimes seen as serving a function that is separate from marketing. However, some companies recognize that public relations can work in conjunction with other marketing activities to facilitate the exchange process directly and indirectly. These organizations have established marketing public relations departments to directly support corporate and product promotion and image management
THE PURPOSE OF PROMOTION
One of the attributes of a free-market system is the right to use communication as a tool of influence. The efforts taken up by the company’s reflects the freedom to use these tools.
Change location and shape
Promotional strategies are used to increase demand of the product by changing the shape of the demand curve. Robin bleach is a consumer product and exists in an environment of perfect competition therefore better promotional campaign can effect price and increase over all sales of the product.
Promotion Informs, Persuades and Reminds Consumers
The major three functions of promotion includes informing, persuasion and reminding consumer of the product. The most successful brand will be a failure if no one knows about it. Robin bleach has through its promotional campaign made sure that its consumers are well aware of the changes they have made in their product.
New brochures are made that are sent to all the retail outlets .A copy of such a brochure is included in the appendix . It clearly says “ New Offer” and “New International Formula”.
“Rs. 2 Off” is the strategy offered by the company to persuade consumers. In the intense competition that robin bleach faces from the open bleach , it should adopt a good promotional campaign to have a differential advantage.
Coordinated Promotional Campaign
If any changes take place in any element of marketing mix Promotional campaign should reflect it because it is through the promotional activities that the consumers comes to know about such changes.
Even in the case of Robin bleach it promotional campaign changed completely to show that the product is being re-launched. It’s brochures, its packaging and the changes in its prices were all coordinated. As Rs 2 off and the new improved formula now became the part of every advertisement and brochure Robin has introduces.
DETERMINING THE PROMOTIONAL MIX
A promotional mix is an organization’s combination of personal selling, advertising, sales promotion, public relations, and publicity
FACTORS INFLUENCING THE PROMOTIONAL MIX
There are four factors that should be taken into accounting determining the promotional mix:
The target market includes the housewives of upper middle class family. Robin blue faces a lot of competition from the local khula bleaches therefore a good promotional campaign is very important for this product.
Right now Robin Bleach has crossed the introductory that is the awareness stage and also the knowledge stage. People have also developed the liking for the product.
Geographic scope of the market
A lot of advertising is required and used by Robin Bleach. It I because personal selling may be adequate when the target market is local and situated near but as the market broaden and as it grows advertising becomes an important sort of promotional technique.
Type of customers
Promotional strategy depends impart on what level of the distribution channel the organization hopes to influence. Final consumers and middlemen buy same product but they require different promotional campaigns. It is because the purpose for which they require the product varies accordingly. Middlemen require it for resale and consumers for final consumption.
Robin bleach is sold to retailers and wholesaler through personal selling and brochures while advertising is required to sell it to final consumers. A formal communication is done to convince the distribution channel members to buy the product.
Concentration of the market
Since the total number of buyers are very large therefore the type of campaign should vary accordingly. Advertising in this case as mentioned earlier is most preferable. It reaches a lot buyers, but the disadvantage is that it is very expensive.
An advertisement on PTV 1 costs about Rs 180000 for just one minute of telecast. A Company that has a budget of Rs 1 crore cannot think of continuing its campaign for more than a month.
Nature of the Product
The nature of the product also influences its promotional strategies as we see in this case of Robin Bleach :
Robin bleach is a product that is relatively less costly and relatively is less risky and complicated and it appeals to a large number of buyers for its survival Therefore advertising is the major type of promotional tool that is used by the company for its promotion.
Degree of customization
Robin bleach is for the mass market and is not adapted to the changes of the needs of a specific market therefore it needs more of advertising than compared to those products that are tailor made to meet the specific needs of the customers and require personal selling.
Presale and Postsale service
Robin Bleach is a sort of product that does not require personal sales or demonstration therefore no such activities are involved in such case.
Stage in the Product Life cycle
When a product is introduces it should be made known to the target market As in the case of Robin Bleach when it was re launched few weeks back its promotional campaign was re designed to make its target market aware of the enhances formula they have introduces for the fabric care . Not only their advertisements but also their pricing strategies, their packaging were re designed to make the consumer aware of how the new Robin Bleach is different from the previous one .
Right now Robin Bleach is in its introductory stage because of the new formula introduced .It has been re launched by Reckit.
Reckit and Colman is a big, multi national company that has large available therefore it can spend a lot of money on its promotional advertising and other promotional campaigns. Lack of money can limit the options of the promotional campaigns that can be used by the company but in case of Robin thus is not the case.
When we talk of not just Robin bleach but any product of Reckitt and Colman the company is always ready to devote a huge amount to be spent on its promotional campaigns and since Robin bleach is the highest profit gaining Brand it should get its desired share from the profits of the company.
This section of our report consists of our analysis done on the effect of the re- launch of Robin Bleach. We conducted few interview with some ladies in various location of Karachi including Defense, Clifton., Gulshan and North Nazimabad.
Various retailers like Friendship store, Marvi and others were also visited by our group to ask them about the response of the customers after the re-launch of Robin Bleach.
Our analysis showed that Robin Bleach has successfully increased its sales volume after the re-launch .There has been also an increase in the company’s own sale. Almost al the house wives were happy with the new formula added in the product, this change was noticed by them after using Robin Bleach.