Principles of Marketing: Strategic Marketing At DALDA
Principles of Marketing: Strategic Marketing At DALDA
This report focuses on the following areas:
- Target Market and market segments
- Product Positioning
- Consumer Markets and Consumer Behavior
- Product Development
- And Competition Analysis
- The Marketing Mix
- Product i.e. all the products under the Dalda brand of Lever Brothers Pakistan Ltd.
- Packaging, Branding and Life cycle stages have been covered
- Price and Pricing Strategies have been discussed
- Distribution system is discussed in detail and Lever’s Strategies regarding the promotion of Dalda brand are also covered.
- Swot Analysis has also been discussed.
This report is an application of the Marketing concepts used as a business function by the Oils, Dairies and Fats Division of Lever Brothers Pakistan Ltd. (LBPL)for Dalda Brand. The goal of Marketing is to create customer satisfaction profitably by building value-laden relationships with important customers. It calls on the organization to think “customer.” and regard him as the King
we, as students require an in depth insight into the creative world of marketing. we need to know how vital role marketing plays in any organization as they all reach out to satisfy citizen and customer needs, providing them value resulting in company profits. our aim was to objectively analyze these principles as applied in the business environment in Pakistan.
“Success depends upon providing the right mix of international and local brands for the local consumer.”
“International expertise means we can focus relevant experience and people on new markets – fast.”
“Research must be consumer focused and technology driven – a worldwide commitment.”
“Our international competitive strength is the depth and quality of our people and their ability to network.”
Unilever’s Corporate Purpose
“Our purpose in Unilever is to meet the everyday needs of people everywhere – to anticipate the aspirations of our consumers and customers and to respond creatively and competitively with branded products and services which raise the quality of life.
“Our deep roots in local cultures and markets around the world are our unparalleled inheritance and the foundation of our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers – a truly multi-local multinational.
“Our long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively and to a willingness to embrace new ideas and learn continuously.
“We believe that to succeed requires the highest standards of corporate behavior toward our employees, consumers and societies and world in which we live.
“This is Unilever’s road to sustainable, profitable growth for our business and long-term value creation for our share-holders and employees.”
Today, Unilever – the Anglo-Dutch consumer goods business – is one of the largest companies in the world with sales (1996) over $50 billion.
Lord Lever Hume packaged the first bar soap and named it as SUNLIGHT thus changing the complexion of a industry that could have thrived as a cottage industry.
Lever Hume with Sunlight on his bicycle used to go to ladies and tell them that this yellow color perfumed soap was specially branded for them. Although there were some resistance in the initial stages of its launch but the high quality and consumer oriented product was accepted by the majority of target market. Increasing sales instigated him to stock and to add outlets and distributors. Lord Lever Hume was the buying man, manufacturer, production manager, quality assurance manager, distribution manager, marketing manager and everything of the company. He soon established soap factories in Europe, North America, Australia and the Far East, and oil mills at Port Sunlight in the UK and Balmain, Sydney in Australia. His diligence, hard work and passion for innovation added different products to the Lever’s product mix.
The reasons behind the creation of Unilever in 1929, when it was created by the merger of Margarine Unie and Lever Brothers, were sound commercial ones. Margarine Unie of the Netherlands and Lever Brothers Limited of the UK competed for supplies of oils and fats which they put to different uses, but they were both in the business of supplying goods for household needs.
After 1917 he moved into the food trade, acquiring fish shops and canned foods, meat and ice cream businesses.
The rapid post-war economic growth and technical progress provided great opportunities for Unilever. The company soon recognized that it must adapt to new markets and new technologies, investing significantly in its research facilities and expanding through acquisitions in new geographical and category areas.
The Company moved into chemicals, packaging, market research and advertising, and the number of these businesses increased through acquisitions during a period of further diversification in the 1970s. By 1986 the company had sold most of its service and ancillary businesses, many of which had grown to a considerable size. At the beginning of the 1990s Unilever’s packaging companies and the major part of its agribusiness interests were also sold, leaving four core product groups – home and personal care, foods and specialty chemicals – which by then (1991) accounted for 96 per cent of sales.
Unilever clearly recognized the need to expand into emerging markets. An increasing proportion of the Company’s resources has been invested in emerging economies, growing from 16 per cent of total Unilever investments in 1985 to 27 per cent in 1996.
Unilever’s designated core categories are now: laundry, personal wash, prestige, mass skin, hair, oral, deodorants, ice cream, yellow fats, tea and culinary products. Other categories, including frozen foods and home care, are regarded as offering much potential in the more distant future.
World-wide strategy for the core categories is combined with custody of the so-called “Unilever brands” – those brand names which are present across several regions and whose central strategic co-ordination will add significant value. The companies are still free to innovate when developing brands to suit their particular market place.
All these moves reflect the needs of a business which is expanding ever further throughout the world and facing tough competition. Unilever is now well placed to meet the opportunities in developing and emerging markets which the twenty-first century will offer.
LEVER BROTHERS IN PAKISTAN
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.
LBPL pioneered the business of processed animal and poultry feeds in Pakistan in 1960. However due to immense difficulties this business had to be closed down in 1980.
Surf, first of the non-soapy-detergent powders was introduced in 1963. It was produced by arrangement with Futehally Chemicals (Pvt.) Ltd.
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.
Unilever had acquired Lipton’s business worldwide In Pakistan Lipton was merged with LBPL in 1984. Legal merger became effective in 1989.
Product Lines in Pakistan
|Personal wash||Fabrics&home care||Personal product||Oil & dairy based products||Wall’s ice crème||Beverages|
|Hard soaps||Fabric wash||Hair care||Banaspati||Lipton\Brook Bond(Leaf Teas)|
|Lifebuoy||Surf Super Active||Sun silk shampoo||Dalda||Cornetto||Yellow Label|
|Lifebuoy plus||Micro surf||Lifebuoy shampoo||
|Lifebuoy gold||Surf excel||Harmony soap||Dalda cooking oil||Top Ten||Top Star|
|Sun light washing powder||Skin care||Dalda sunflower oil||Star Cup||Richbru|
|Lux||Sun light soap||Fair & lovely skin crème & lotion||Planta cooking oil||Calippo||Taaza|
|Dalda Lajawab||Split||BB Tips|
|Lyril||Vim Powder||Pepsodent||Blue Band||Paddle Pop||Dust Teas|
|Vim Bar||Master Line||3-D||Pearl Dust|
|Industrial Fats||Solo||Ruby Dust|
|Oils and Ghee||Mini Milk||Kenya Mixture|
|Take Home 1 Ltre Pack||Red Rose|
ODF Division – Product Line
This report concentrates on the Dalda brand of ODF Division of Lever Brothers Pakistan
The ODF division is catering both to the consumer markets and the business markets. Under the cooking fats and oils they produce Dalda Banaspati Ghee, Dalda Cooking Oil, Dalda Sunflower Oil, and Planta. Under yellow fats they have Blue Band Margarine.
For business customers such as Pizza Hut, LU, and Peek Freans, the special line of products is called the Masterline.
In united India people used to eat ghee derived from milk or animal fats Dada &co. were the stockiest & distributors of vegetable oils one of the co. brand click & lever’s interaction with Dada Co. insigned L in Dada and it was called as “DALDA” the brand of Indo-pak.
LEVELS OF A PRODUCT
Cooking needs fulfilled (all products)
- Dalda cooking oil: good quality cooking oil for the health conscious consumer with attractive yellow green tin with soya bean pod symbol, vitamins A, D and E added.
- Dalda Banaspati Ghee: quality ghee in yellow tin packaging with palm tree symbol.
- Dalda sunflower oil: very light oil for the extra-health conscious consumer with emphasis on its light nature
- Planta cooking oil: ghee flavored cholesterol-free oil for health conscious consumers. Has a bright blue yellow and green packaging in tin
- Dalda Lajawab Its an emulsified vegetable oil for health conscious and above this taste conscious with 18% of saturates and 60% poly unsaturated.
Easy to open tins packaging applies to all the oils and ghee products.
ODF products have little or no augmented features as repeated buying and short-term use characterize their consumption. However, the following are available for all the products:
- Easy availability due to an efficient distribution network.
- Warranty assured due to the fact that a company of international repute with high quality standards makes the product.
- Other than cooking needs other nutrients such as vitamins A, D and E and mineral calcium are also supplied by these products.
Dalda Cooking Oil: Has vitamins A, D and E, light consistency.
Dalda Banaspati: Has a low content of trans-fatty acids (0-5%) and also contains less Poly-unsaturated and is hence healthier.
The set of all actual and potential buyers of a product or service
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. The most recent example is of Dalda Lajawab that was test marketed in Lahore and after successful acceptance it is now available in Karachi and Islamabad.
Lever’s Generic Strategies
Promotional activities are increased during Ramzan, Winters (wedding season) and Moharram since more oil/banaspati is consumed during these months.
LBPL adds new features to its products every two years in order to hold on to the existing customers and win new ones. For example, a lighter colored, Ultra-refined Dalda was re-launched in November 1997. Apart from new features, LBPL also added a new product, Sunflower Cooking Oil, to the ODF product line in 1991.
Note: Lever’s R&D has recently come up with Dalda Lajawab which is elaborated in the Product Section
One Litre packs of Dalda cooking oil were added in order to serve the lower end of the market. Plus Levers is now promoting Blue Band not only as a spread but also as a product that can be used for cooking, baking, etceteras, hence targeting a separate market altogether.
Market Segmentation, Targeting And Positioning
LBPL segment their market on the following criteria:
|Region||Country-wise, province-wise, city-wise, etc.|
|Age||Under 25, 25 – 45, Over 45|
|Income||A – F Households with Class A households having the highest income and Class F having the lowest.|
|Education||Uneducated, Primary School, Matriculation, Intermediate, Bachelors, Masters, PhD.|
|Social Class||A – F Households – A being Upper class and F being the lower class.|
|Purchase Occasion||Regular occasion, special occasion|
|Benefits Sought||Quality, service, economy|
|User Status||Nonuser, ex-user, potential user, regular user|
|Loyalty Status||None, medium, strong, absolute|
Dalda Cooking Oil, Dalda Banaspati, Dalda Sunflower Oil, Dalda Lajawab and Planta Cooking Oil.
|Region||Dalda is a nation wide brand. Although its sales are mainly in urban sind and urban Punjab.
Planta Cooking Oil: Mainly Punjab
|Age||25 – 45|
|Gender||Traditional female housewife|
|Income||Households A and B*
Households C** (Dalda Cooking Oil)
|Education||At least Matriculation|
|Social Class||Households A and B*|
|Lifestyle and Personality||Dalda Cooking Oil is mainly targeted at housewives who are more or less in the 25 – 45 age group. This woman is traditional but educated (at least completed her matric) and loves taking care of her family. She is caring and nurturing and wants the best for her family. She is quality conscious and health conscious and will be prepared to pay a premium price for good quality products. She goes for cooking expertise, good taste and high quality.
Dalda Banaspati is targeted at the housewife who though wants the same taste as desi ghee wants to provide her family with a healthier alternative – though she is not totally obsessed with health considerations.
Dalda Sunflower Oil is targeted at housewives who go for extra health benefits and are extra cautious about their family’s health.
Planta Cooking Oil is targeted at the housewife who wants the taste of ghee but without the harmful effects that can result because of the consumption of ghee. She is health conscious and wants to be accepted as a daughter-in-law, as a wife and as a mother who provides her family with good tasting food with nutritional value.
Dalda Lajawab is targeted at housewives who are more Health conscious and also want to win others by the Taste of food served.
* The Class A households are the highest income groups and Class B households are the middle-income groups. These are the household who are willing to pay a premium price.
** by introducing 1 Liter Poly Bags, LBPL is now also targeting the lower end of the market i.e. the Class C Households.
- 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 flavor not for normal but for special cooking.
Consumer Markets And Consumer Behavior
Characteristics Affecting Consumer Behavior
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. Hence oil and ghee are important ingredients.
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 – their mothers used it, their grandmothers used it – 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.
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.
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.
Role And Status
Being a premium quality product Dalda fulfills the esteem need since the brand name is very strong and is also associated with a multi-national company like LBPL.
Consumer Behavior Roles
Dalda Cooking Oil, Dalda Banaspati, Dalda Lajawab and Planta Cooking Oil
- Initiator: Housewife
- Influencer: Family, traditions, advertisements, friends, neighbours
- Decider: Housewife
- Buyer: Husband, Housewife, servant
- User: Whole family
Competitive Position And Competitor Analysis
In Pakistan, LBPL’s main competitors in the foods section are local or other specialized one-product multinationals. In home and personal care, LBPL faces similar competition mainly from Procter & Gamble.
Main competitors for oils are Habib and Tullo. Both are local brands with the former being a Market-Challenger for LBPL. Recently, Habib has also launched sunflower oil in an attractive plastic can packaging. LBPL mainly concentrates in keeping market share above Habib’s as its strong financial backing and predominance in certain areas gives it great potential to compete with it head-on.
Lever Brothers enjoy a good competitive position in the Pakistani market. Below is an analysis of its relative standing in the ODF division.
Competition In Oils And Fats
Lever Brothers have the largest market share in the cooking oils range followed by Habib and then Tullo. Shama is dominant in the region from Nawshera to Multan.
Dalda Cooking Oil is a premium priced oil. It provides 30% of Lever Brother’s turnover and has 76% of the market share of cooking oils. It is more dominant in Karachi and other southern cities. Habib and Tullo oils are the main competitors for Dalda Cooking Oil. Habib’s recent acquisition of the ISO 9002 award is yet another hindrance to the growth of Dalda cooking oils in the quality conscious market. Soya Supreme is also a potential competitor for Dalda and is relatively popular in Karachi and other southern cities.
Dalda Banaspati ghee and Planta face competition from local Shama (biggest competitor for Banaspati), Shahbaz, and Sufi brands as well as desi ghee. The former is ghee itself whereas the latter is ghee flavored oil positioned to lure health conscious people who grew up using ghee. They are both very popular in Punjab where ghee consumption is relatively high. Although the size of the market for ghee is falling, the market share of Lever Brothers in this market is rising. Right now the demand exceeds the supply.
The pricing of the major players according to direct competition is as follows:
|Brand||Packaging Size||Retail Price (Rs.)|
|Palm Cooking Oil Pricing|
|Dalda (LBPL)||5.50 ltr||345.00|
|Planta (LBPL)||5.00 ltr||345.00|
|Soya Supreme||5.00 ltr||332.00|
|Habib||2.50 ltr (tin)||174.00|
|5.00 ltr (tin)||303.00|
|Sunflower Cooking Oil Pricing|
|Dalda (LBPL)||4.50 ltr||330.00|
|Packaging Size||Retail Price (Rs.)|
|Dalda LBPL||5.00 Kg.||Rs. 297.00|
|2.50 Kg.||Rs. 180.00|
|Habib||5.00 Kg.||Rs. 333.00|
|2.50 Kg||Rs. 171.00|
|Tullo||5.00 Kg.||Rs. 300.00|
|2.50 Kg.||Rs. 148.00|
The Marketing Mix
The marketing mix is the set of marketing tools that work together to affect the market. The four elements of the mix are, of course, the product itself; the price at which it is offered for sale in the market; the place or how the product is distributed; and promotion which brings the product to the attention of the customer, arouses his/her interest, builds up the desire for the product and finally moves him/her to act/purchase the product.
The following section of this report will deal with the marketing mix used by LBPL for its Dalda brand.
Anything that can be offered to the market for attention, acquisition, use or consumption that might satisfy a want or need
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 is true for almost all of the products in this brand.
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.
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 coloring.
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 cookings.
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.
Packs/Tins of ODF products
Social and Esteem needs met.
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.
“Research must be consumer focused and technology driven- a world wide commitment”
Lever has once again demonstrated its compliance with its customer-oriented policy by the extension of Dalda Lajawab in its current product line, that’s 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.
Oils and Ghees
|Dalda C. Oil||Dalda B.Ghee||Dalda Sunflr.||Dalda Lajawab|
|Vitamins||A, D, E||A, D||A&D|
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 labeled 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 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:
|Premium quality, high prestige,||The oil which tastes like ghee. Best of both worlds.|
|Tasty food. Cooking ease.
|Health, nutrition and good food.|
|Motherly love, tradition
|Motherly love, tradition|
|Cooking expert, mother
|Young educated housewife also young mother|
Brand equity is the amount of power and value a brand name carries in the market. Firms can capitalize on high brand equity to increase profits and market share. Brand equity is measured on a three-level scale i.e. awareness, preference and loyalty. Here’s how LBPL’s ODF brands stand:
Dalda is probably the most widely known of all LBPL’s ODF products and its equity in the market is high. Dalda’s positioning is that of cooking expert and its equity has built up that image. Those who buy Dalda remain more or less loyal to it. Some buy it because their mothers and grandmothers bought it and some because they deem it the most dependable. In either case the product does not disappoint the purchaser.
Planta is targeted primarily at province of Punjab and specifically at the bigger cities of Lahore and Faisalabad. The brand seems to be doing very well in its target market and is building up its equity. It derives most of its equity from the Lever name and from being a sister brand of Dalda. Dalda Sunflower Cooking oil and Dalda cooking oil have the target market in the Karachi, Lahore and Islamabad. Dalda Lajawab is targeted towards A and B class people and is showing repeat purchases.
Existing Product Category
New Product Category
Existing Brand Name
| Line Extension
(Dalda Cooking Oil)
(Dalda Sunflower Oil)
New Brand Name
(Planta Cooking Oil)
| New Brand
(Blue Band Margarine)
Product Support Services
Consumable items require little or no support services. They are items, which do not require any complex instructions to use. As such there are no support services offered for these products.
However, the Dalda cooking advisory and the TV program Dalda Ka Dastarkhwan may be looked upon as a kind of support service, which teach users, how to better use the oil/ghee they have purchased.
Product Life Cycle Stages
All of the products in the ODF division face different life-cycle stages and understanding where each product stands is essential for the formulation of correct strategy. These are the standings:
Dalda Banaspati Ghee: Low growth, Mature product, segment may be drying up.
Dalda Cooking Oil: Near maturity, Medium growth. Still viable
Dalda Sunflower Oil: High growth possibilities in a small market. Current situation not encouraging.
Planta Cooking Oil: Medium growth, still possibility of further growth.
Dalda Lajawab: Introductory stage, possibility of rapid growth.
- “I FEEL THAT DALDA NEEDS TO LAUNCH A COMPLETE SET OF NEW MODERNIZED BRANDS TO ATTRACT THE YOUNGER FEMALE MARKET AS THEY ARE ALARGER SEGMENT AND DALDA’S OLD STRATEGY AND SLOGAN OF ‘JAHAN MAMTA WAHAN DALDA’ HAS TO BE CHANGED.”
- “CANOLA OIL HAS TO BE LAUNCHED IMMEDIATELY AS IT IS THE MOST HEALTH OIL AND IS GAINNG A LOT OF POPULARITY.”
The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service.
The chart provided below lists the prices of the various LBPL ODF products in the market. (These are retail prices because dealers did not reveal their trade prices).
|Banaspati||5.00 kg||Tin||Rs. 330.00|
|Sun Flower||4.50 ltr.||Tin||Rs. 330.0|
|2.25 ltr.||Tin||Rs. 173.0|
|Cooking oil||5.00 ltr.||Tin||Rs. 305.00|
|2.50 ltr.||Tin||Rs. 160.00|
|Lajawab||1.00 ltr||Poly jar||Rs. 180.00|
|Planta||2.50 kg||Tin||Rs. 160.00|
|5.00 kg||Tin||Rs. 305.00|
(Note: For lists of competitors’ prices please refer to the section on Competitive Position and Competitor Analysis)
The Structure Of The Market
The market for ODF products seems like a monopolistically competitive market. That means that it is a market in which many buyers and sellers trade over a range of prices rather than a single market price. The reason being that sellers can differentiate their products from each other using quality, features, style and accompanying services. The ODF market follows these criteria. There are a very large number of buyers and also a large number of sellers. Many of the sellers such as Habib, LBPL, Nayab, and Soya Supreme etc. can differentiate their products from the rest with the different features they offer. Soya Supreme offers UHT treated oil, Nayab sells its ghee in Poly bags LBPL and Habib differentiate themselves from the entire market on the basis of quality and so on.
The price elasticity of demand is the responsiveness of the quantity demanded of a product to the change in its price. Simply put it shows how consumers change their spending on goods when their prices go up or down. 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. Currently the pricing issue is a cause for concern at LBPL because the economy has fallen victim to a prolonged recession and as a result the rising inflation is taking a substantial bit out of LBPL’s demand curve. Pricing policy is also being affected by duties being levied on the import of edible oil. The industry is becoming increasingly competitive with competitors undercutting prices causing consumers to shift their spending patterns.
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:
Price paid to buy LBPL’s ODF products
Time spent in finding Dalda/Planta/Blue Band
Energy spent in finding/using Dalda/ Planta/ Blue Band
The psychic cost of not buying a foreign ODF Brand
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. Needless say that to support an image/perception of high quality, they have to provide high quality products as well. The promotion as discussed in the coming section is also targeted mostly at the affluent section of the market with the advertisements showing well-to-do families. The cookery program is also to attract affluent housewives away from satellite channel cookery programs to local TV where they can view LBPL advertisements.
The following grid summarizes the above discussion on pricing strategy:
- “ WE FEEL THAT DUE TO HIGH COSTS OF INGREDINTS THE PRICES OF OIL CANNOT BE CHANGED DRASTICALLY,AS THESE DECISIONS ARE CONTROLLED BY UNILEVER”.
- “WE SUGGEST THAT THE COMPANY GOES WITH COST RECOVERY PRICING.”
- “IT SHOULD ELIMINATE SOME DOG BRANDS LIKE DALDA CRISP.”
- “THE MARKET AND COMPETITRION SHOULD BE ANALYZED TO SEE WHETHER DISCOUNTS SHOULD BE GIVEN OR NOT.”
The set of people and firms involved in the transfer of the title to a product as the product moves from producer to ultimate consumer or business user
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.
LBPL aims to achieve maximum retail coverage and is not selective in its distribution technique. 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
Factory Depot Distributor Wholesaler
LBPL also has a large field that is engaged in helping it manage the retail outlets and increasing its sales volume. The brand manager himself goes on surprise visits to see if distribution is being properly dealt with according to LBPL standards or not.
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.
Branch Managers Sales Category Manager
LDM or Territory Managers and JMs
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.
Conflicts With the Distributor
Conflicts arise when the distributor does not comprehend to the specified standards of performance. Lack of efficiency on their part could result in commodities not reaching retailers in smaller, far off areas. The company may lose a portion of the customer this way.
Moreover, “hoarding” on the part of the distributor may result in artificial shortage of the product, excess inventory lying in the stockrooms resulting in high inventory hold costs.
LBPL does not want its retailers selling old tins of Dalda. They prefer removing those from the shelf and replacing them with fresher, newer ones so that the consumer receives the same pure and premium Dalda oil on every purchase.
LBPL operates through many small distributors. Disagreements arise when the distributor may insist on providing services to the competitors as well. This can distribute demand for the LBPL product.
Thus, to safeguard the company against all these and other conflicts, both the company and the distributor are bound by a legal contract that specifies the necessary required terms and conditions of the trade.
Levers Distributorship Process
Lever divides the distributor’s territories with respect to population, per capital income, high schools, middle schools, class, status, and number of outlets. Lever has a complete idea of merchants, wholesalers, superstores, and retailers. Forty to sixty outlets make one section (minimum) in which a van should move. In this way a distributors total territory is divided into six sections. Distributors in big cities can have more than hundred sections.
Distributors are given 3% profit on sales plus redistribution cost, Octri and bonuses.
Direct Dispatches from factory to distributors are made for Karachi and to the distributors with the requirement of full truck.
Lever Depots are in Turnol, Faisalabad, Lahore and Multan.
- “WE FEEL THAT DALDA AND PLANTA NEED TO INCREASE THE SHELF SPACE AS THIS IS WHERE THEY ARE BEING DEFEATED BY COMPETITION, THIS CAN BE DONE BY OFFERING SUBSTANTIAL TRADE DISCOUNTS AND HIGHER MARGINS”
Element in an organization’s marketing mix that serves to inform, persuade and remind the market of a product and the organization selling it.
LBPL being a market-oriented and customer-centered company its marketing efforts are relatively the most.
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.
Dalda concentrates most on visibility and availability. They pay a lot of attention towards this form of advertising. This includes print advertisements, price cards, posters at vendor’s shops, sign boards, buntings, flags etc.
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 The ads also run at different times of the day specially between 6.30 to 7.30.
The punch line has remained the same through the ages, which has turned out to be the identity of the product and has done wonders for it.
It reads: “Jahan mamta wahan Dalda”
The message concentrates on aroma, taste and a happy cheerful family. The family gives the mother credit for the great tasting food. The theme was image building. It informs about the product and persuades the consumers to buy it. Changes are made within four months.
Re-launch: The color of the oil was lightened as sales weren’t picking up especially in Karachi as buyers here preferred light oil. LBPL had to, due to influx of other foreign brands (competitive strategy). The message was the same though motherhood, love for the family and health. Concentration was more on the color change.
Sunflower oil launched in 1991. It gets little support due to strong competition from the likes of corn oil, canola oil, etc. therefore not much of the advertising budget, rather promotion efforts are allocated towards it. These ads emphasize lightness of the sunflower oil itself for fitness conscious consumers. Its stronger markets are Karachi, Lahore and Islamabad. Now Dalda Lajawab is being advertised heavily towards its target market.
It also plays its role in promoting Dalda by arranging different events like cooking contests, games and shows.
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 give the trade off to the retailers.
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.
Besides this, the cookery program that runs every Tuesday evening is a good promotion tactic as it shows use of the Dalda oil in a variety of dishes. The viewer will also remember the brand name through the message “Dalda Ka Dastarkhawn.” A housewife’s best friend in every way.
The symbol and the color of the tin is also a good way to communicate to the consumer who can’t read but can easily recognize the tin by the palm leaf symbol or the yellow and green color scheme.
There is an advisory service for the convenience and help of the consumer a cookbook to gift and keep. A videocassette of the televised cookery show.
Sales promotion is done to increase sales build image of product in the consumers so called “black-box” and develop a relationship with your consumers.
Premiums are offered during Ramazan or offers like a free chat masala packet, etc. to increase sales.
Different sizes (poly bag, plastic bottle, 2.5/ 5 Litre tin) are available for convenience of the consumer and to target all segments of the market. Packaging sent abroad to maintain standards. Brand positioning used is about benefits of the product itself.
- “WE FEEL THAT LBPL SHOULD ADVERTISE THE ODF PRODUCTS ON SATELITTE AS WELL AS ON PTV.”
- “WE ALSO FEEL THAT A SEPARATE RACK SHOULD BE PROVIDED IN ALL RETAIL STORES FOR DALDA LAJAWAB AS IT IS FACING A LOT OF PROBLEMS.”
- “DALDA KA DASTAKHAWAN’ SHOULD BE RELAUNCHED WITH AMORE MODERNIZED LOOK WITH POPULAR MODELS APPEARIMG IN IT.”
- “THE NEW MARKETING CAMPAIGN SHOULD ALSO BE LAUNCHED WITH A NEW LOOK AND VISION.”
- “THE PRODUCTS SHOULD BE PACKAGED IN BOTTLES AND OTHER MORE CONVIENIENT AND TRENDY CONTAINERS TO ATTRACT CUSTOMERS.THIS WILL INCREASE CUSTOMER SATISFACTION.”
- 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.
- The product range of the entire ODF division has very brand awareness.
- in the banaspati category DALDA is the only fat free brand.
- DALDA is a very old brand their has been very no change in packaging since ages, people feel that the new better packaged brands have better products.
- BANASPATI and OIL is also sold loose to a large rural market.
- The market is now being 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.
- 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 and the other LBPL brands are milking resources from it.
The entire product range alone accounts for 30 % profitability of the firm.
Dalda Lajawab is a dog .
Planta is a star.
Dalda sunflower oil is a question mark.
High Market Low Market
Procedures and Methodologies
Product Price, Place and Promotion have been discussed.
Numerous retail outlets were visited to observe the visibility of products in terms of display, print advertisement and also to evaluate the values and benefits derived by the customers for various products of Dalda brand.
Appointments with Mr. Chaudhary Mohammad Basharat (Group Marketing Manager) and Mr. Shehzad Khan (Brand Manager) were arranged to gather information.
Referring to the books of Marketing did further research about the main topics.