THE IMPORTANCE OF UNDERSTANDING THE BUYER BEHAVIOUR AND THE APPLICATION OF MARKETING MIX ELEMENTS FOR ORGANISATIONAL SUCCESS

Prepared By

U. Yogachandran

PCM II/2012/KAN - 0030

Slim Kandy July 2012

Preliminary Certificate in Marketing

SRI LANKA INSTITUTE OF MARKETING

Acknowledgements
My sincere thanks my lecturers Mr. Bharatha Herath, Ms. Perly Liyanage and Ms. Tharangi Wijesooriya, for guiding me to complete this assignment.

Its my duties to thank Ms. Indika and all other staffs of SLIM-Kandy, for providing an excellent environment to study.

I wish to sincerely thank Mr. Sanath Piyawardhana (General Manager-Sales & Marketing, OLCL), for guiding me to follow PCM and giving instructions to complete this assignment and inspiring me.

Furthermore I wish to thank Mr. L.P.L. Hemantha (General Manager-Operations, OLCL) for giving me details.

Also I wish to thank Ms. Shiromy Liyanage (Asst. Quality Manager-OLCL), Mr.Ikram (Area Sales Manager - Expack) and my colleagues of PCM for giving me assistance for this assignment.

I would fail my duties if I do not specially thank my beloved wife for encouragement given to me to complete this assignment.

Contents
1. Product 1.1 Introduction to selected B2C Marketing Company a) Product portfolio of Fonterra Brands Lanka (Pvt) Ltd 1.2 Introduction to selected B2B Marketing Company b) Product portfolio of Expack Corrugated Cartons (Pvt) Ltd. 2. Marketing Mix 2.1 Introduction of Selected Brand 2.2. Detailed Marketing Mix Elements of Anchor Full Cream Milk Powder a) Product attributes of Anchor Full Cream Milk Powder b) Price attributes of Anchor Full Cream Milk Powder c) Place attributes of Anchor Full Cream Milk Powder 2.3 Effective Marketing Mix of Anchor Full Cream Milk Powder a) Matches customer needs b) Matches corporate resources c) Creates competitive advantage d) Well blended 3. Organizational buying behavior 3.1 Introduction of Selected Product 3.2 Detailed Analyses of Buying Decision Process of Slotted Case Cartons. 3.3 DMUs of Selected B2B Buying Process. 4. Levels of Products 4.1 Introduction of selected product

4.2. Five levels of Anchor Full Cream Milk Powder. a) Core Product b) Basic Product c). Expected Product d) Augmented Product e) Potential Product Findings and Conclusion References Limitation

Executive Summary

To From Subject

: : :

The Examiner PCM Student The Importance of Understanding The Buyer Behaviour And The Application Of Marketing Mix Elements For Organisational Success

Date

06.06.2012

As an application of Marketing Mix elements in B2C, I have selected Anchor Full Cream Milk Powder for analyzing application of Marketing Mix elements for the organisational success. I have selected B2B buying behaviour towards Expack Corrugated Cartons (Pvt) Ltds for understanding the importance of the buyer behaviour. I used tables, figures and pictures in this assignment, in order to describe my assignment easily.

Introduction
I have selected Fonterra Brands Lanka (Pvt) Ltd and Expack Corrugated Cartons (Pvt) Ltd as B2C and B2B companies respectively in task 01. In task 02 I analyzed the Marketing Mix Elements of Anchor Full Cream Milk Powder, which is marketed by Fonterra Brands Lanka (Pvt) Ltd. In order to complete the task 03 I selected the OLCLs buyer behavior towards Expack Corrugated Cartons (Pvt) Ltd. In task 04 I analyzed Anchor Full Cream Milk Powders product levels.

Methodology
I have done this assignment on understanding the Buyer Behaviour and Marketing Mix, in task 01 I selected Fonterra Brands Lanka (Pvt) Ltd as B2C Company and Expack Corrugated Cartons (Pvt) Ltd as B2B Company. I gathered data from internet and field to introduce those companies and its product portfolio. I select Anchor Full Cream Milk powder to for my detailed analyze of Marketing Mix, I gathered Data to analyze from Mr. Sanath Piyawardhana, an Ex Sales Manager of Fonterra Brands Lanka (Pvt) Ltd. I Selected Orient Lanka Confectionery Private Ltd (known as OLCL)s buying process of master cartons from Expack Corrugated Cartons (Pvt) Ltd in task 03 for understanding the buyer behaviour towards to the B2B Company, I gathered data from Mr. L.P.L. Hemantha (General Manager-Operations-OLCL), Ms. Shiromy Liyanage (Asst. Quality Manager-OLCL) and Mr. Ikram (Territory Manager-Expack Corrugated Cartons Pvt Ltd). In task 04 I have analyzed product levels of Anchor Full Cream Milk Powder, I gathered data from Mr. Sanath Piyawardhana, an Ex Sales Manager of Fonterra Brands Lanka (Pvt) Ltd for analyzing it. As a summary I have gathered primary data from consumer research, market observation and discussion with respective company staffs, and for secondary data I referred web sites, previous marketing related researches, brochures and magazines.

Task 1

1. Product
1.1 Introduction to selected B2C Marketing Company I have selected Fonterra Brands Lanka (Pvt) Ltd as B2C for my assignment. Fonterra Brands Lanka (Pvt) Ltd is the market leader in the milk products in Sri Lanka, which is started 30 years ago. a) Product portfolio of Fonterra Brands Lanka (Pvt) Ltd Following products are marketed by Fonterra Brands Lanka (Pvt) Ltd in Sri Lanka under the brand name of Anchor. Anchors product portfolio as follows. Table 1.1- Product portfolio of Fonterra Brands Lanka (Pvt) Ltd Product Anchor Full Cream Milk Powder Target Market Even though this is special product for children. Fonterra is not targeting to a

particular age segment.

Anchor 1+

Specially developed for children between the ages of one and three.

Anchor Pediapro

Targeting children between the ages of one and three.

Anchor Pediapro Mama

Targeting

Pregnant

mothers

&

Breast

feeding mothers.

Anchor Shapeup

For those who want to keep slim and healthy

Also Fonterra is marketing products under the brand names of Newdale, Anelene and Ratthi. 1.2 Introduction to selected B2B Marketing Company I have selected Expack Corrugated Cartons (Pvt) Ltd as B2B Company for my assignment. Expack is an ISO certified, award winning manufacturer and marketer of printed corrugated cartons to both the local Sri Lankan and export markets.

b) Product portfolio of Expack Corrugated Cartons (Pvt) Ltd. Table1.2 - Product portfolio of Expack Corrugated Cartons (Pvt) Ltd Product Regular Slotted Case Description Packaging any type of product from FMCG to Horticultural to Industrial products

Die Cut Boxes

The cartons are used for packaging of food, vegetable, as well as for livestock and can withstand extreme temperatures.

Laminated Boxes

Special Laminated boxes which is a requirement for direct shelve.

Other Packaging

As a part of Ex-Packs go Green concept, Expack has developed products such as wardrobe cartons, pallets, tea chest cartons, tuna cartons and many more.

Task Two

2. Marketing Mix
2.1 Introduction of Selected Brand I have selected Anchor Full Cream Milk Powder for my detailed analysis of Marketing Mix applications. 2.2. Detailed Marketing Mix Elements of Anchor Full Cream Milk Powder a) Product attributes Table 2.1- Product attributes of Anchor Full Cream Milk Powder Marketing Mix Elements Variety 2 varieties, Anchor Full Cream Milk Powder and Anchor Full Cream Milk Powder Instant. Design Greenish New Zealand mountains with blue background, it highlights about the nutritional factor and the source. Quality Always gives consistent quality, made with World Health Organizations (WHO) and Food and Agricultural Organizations Standards. Features Brand Name Highlights about the nutritional factors. Separate family name and it positioned in the top of the mind of customers. Always maintaining that Anchor word which in red, an anchor symbol is top of it. Packaging Immediate container with aluminum foil to protect from the sunlight, moisture and other external factors, and inner pack is covered by an outer container, informative. and outer pack is Created TOP of the mind awareness to the customers. Customer Anchor buys for Description Key Unique Feature

maintain his status, rather than buying a local milk

powder.

Sizes

Anchor Full Cream Milk is having 75g, 250g, 400g, and 1kg - and the Anchor Instant variant has two pack sizes of 400g and 1kg

Services

Gives warranty to its customers by giving 2 customer hotlines, Customer hotline numbers are 0112488255 and fax no is 0112488017.

b) Price attributes Table 2.2 - Price attributes of Anchor Full Cream Milk Powder Marketing Mix Elements List Price Retail prices Anchor 75g Anchor 250g Anchor 400g Anchor 1Kg Rs. 58.00 Maintaining a high price & high quality strategy when comparing with its competitors. Rs. 165.00 Rs. 325.00 Rs. 810.00 Rs. 325.00 Rs. 810.00 Fonterra has introduced Rathi full cream milk powder as a fighter brand to fight with Description Key Unique Feature

Anchor Instant 400g Anchor Instant 1Kg Strategies -

Physiological pricing strategy, Price is competitive but always maintaining a premium price comparatively, to show customers its high quality.

competitors, with a Sri Lankan lesser name, price. with While

Discounts

To the trade are starts with Rs. 18.00 per case to maximum of Rs. 90.00 per case for those buy 2 cases up to 15 cases. special discounts given in modern trade.

Rathi full cream milk powder fighting with competitors, Anchor

Full Cream maintaining Payment Terms Credit Terms Trade - Cash and cheque. Distributor Cheque 7 to 10 days credit to distributor 4 to 10 days credit to the dealers its premium pricing

with its high quality.

c) Place attributes Table 2.3 - Place attributes of Anchor Full Cream Milk Powder Marketing Mix Elements Channels Detailed diagram of distribution channels They not cover entire are given in figure 2.1. Coverage shops in Sri Lanka, but Description Key Unique Feature

Approximately cover around 40,000 outlets due to the brand power directly. and consumer demand, product reach almost all

Locations

Placed it in all possible outlets

Transportation Distributor/Direct Dealer has to provide potential outlets. transportation for the goods to their warehouses, Company paying an allowance for that.

Figure 2.1 Distribution Channels diagram of Anchor Full Cream Milk Powder.

Company

Distributors

Direct Dealers

Modern Trade

Whole Sale Shops

Retail Shops

Customer

d) Promotion attributes Table 2.4 - Promotion attributes of Anchor Full Cream Milk Powder Marketing Mix Elements Advertising Always promoting with the theme of Always targeting mothers Mothers endless love, to her child. Personal Selling Public Relations Sales Promotions Special children. activities for mothers Shop to shop visit emotional with her relationships child, also Description Key Unique Feature

highlighting

nutrition

and factors in their advertisings, because Fonterra identified

Promotions in modern trade, specially that mothers are the major Best Buy promotions in Cargills Food decision City makers, when purchasing milk powders.

2.3 Effective Marketing Mix of Anchor Full Cream Milk Powder a) Matches customer needs Anchor matches customer needs, always researching on consumer attitude changes, life styles, sales promotion & advertising, with that Fonterra maintaining Anchor marketing mix of Full Cream Milk Powder as per the customer needs. b) Matches corporate resources The marketing mix of Fonterra is always matches its corporate resources, Fonterra pre plans the marketing mix with its corporate resources. c) Creates competitive advantage Anchor Full Cream Milk Powder having the competitive advantages with its marketing mix. This is the reason for Anchor Full Cream Milk Powders success in Sri Lanka. d) Well blended Anchor Full Cream Milk Powders Marketing Mix is well blended with correct percentage, which gives superior value for customers.

Task Three

3. Organizational buying behavior

3.1 Introduction of Selected Product I have selected buying process of master case cartons, marketed by Expack Corrugated Cartons (Pvt) Ltd, which required by Orient Lanka Confectionery (Pvt) Ltd (known as OLCL), producers of Maam Biscuits. They purchase master cartons from Expack Corrugated Cartons (Pvt) Ltd, to store their biscuit packets. 3.2 Detailed Analyses of Buying Decision Process of Slotted Case Cartons. Table 3.1 - Detailed Analyses of Buying Decision Process of Slotted Case Cartons Problem Recognition Expack found a problem in the Orient Lanka Confectionery (Pvt) Ltd (OLCL), which is they need to store their new biscuit named Spicy Chicken, they need a master case to store their products, and initiator of this problem, is production General Manager of OLCL. General Description Needs OLCLs general needs descriptions of cartons are High Quality carton to store food products. Maintenance of Consistent quality Printing cartons as per OLCLs design Comparatively Low prices Minimum of one month credit facility Transportation provided Environment friendly products 25000 quantities required for first month

Expack can provide above facility.

Product Specification

Technical team OLCL expecting the following from the carton. Dimensions are 365 mm length, 265 mm width and 225 mm height per carton. 3 flute material 45g weight per 100 square centimeters. (45g/100cm2).

Can load minimum of 55kgs above the stored single carton. Appropriate printing as per design. Relatively easy model for users.

Expack decides that they can manufacture cartons as per the OLCLs product specifications. Supplier Search Expack contacted the Initiator to describe about their cartons, also they approached the influencer through contacts. Also Expack e-mailed to the General Manager of OLCL about their products, which they are giving to various manufacturing companies in Sri Lanka. Proposal Solicitation OLCL has invited selected 3 suppliers to produce a proposal for the cartons, Expack also got an opportunity to give a proposal to OLCL. Expack has designed a very well detailed brochure and sent it to OLCL, after that OLCL has decided to invite Expack to give a presentation about their cartons. Expack has special team for presentation, they went to OLCL to give a presentation to the decision makers and approvers of OLCL. Also Expack has given samples to OLCL which matches appropriate requirement of OLCL. Expack presentation team mainly focused about quality, credit facility, transportation and on time supply in their presentation. Supplier Selection OLCLs decision maker satisfied and decided to purchase cartons from Expack, Expack had following competitive advantage with comparing with its competitors. 50 days credit facility Warranty on cartons, returns acceptable Easily accessible geographical location Past history and reputation with OLCL Product quality

OLCL has signed an agreement with Expack to supply cartons. Order Specification routine OLCL agreed to generate an order for every 30 days and Expack agreed to supply the order within 15 days.

Performance Review

OLCL having monthly performance review meeting about their raw material purchases.

Time to time Expack sends questionnaire to OLCL about their service satisfaction level, user reviews, modifications required, and consistent quality.

3.3 DMUs of Selected B2B Buying Process. Expack has identified the DMUs of OLCL, in order to purchasing the cartons. They are given in table 3.2. Table 3.2 DMU member of Selected Buying Center DMU Unit Initiator User Influencer Buyer Decision Maker Approver Gate Keeper Selected Buying Center Member General Manager Production Production Manager and Packaging Materiel Stores Executive Quality Manager Purchasing Executive Director Operations Managing Director Receptionist

Task Four

4. Levels of Products
It is useful to marketers to think of a product as comprising of five levels. Figure 4.1 Levels of a product

Core Product

Basic Product Expected Product Augmented Product Potential Product

4.1 Introduction of selected product I have selected Anchor Full Cream Milk Powder to analyze the levels of a product.

4.2. Five levels of Anchor Full Cream Milk Powder. a) Core Product Core Product of Anchor Full Cream Milk Powder would be a mean of thirsty and nutrition.

b) Basic Product The basic product benefits of Anchor Full Cream Milk Powder as follows Aluminum foiled inner pack, which is protecting from sunlight,

humidity/moisture, and contamination, which helps to keep the milk powder in good condition for long period. Inner pack is certified for food grade. Outer package is covering the inner pack from damaging and also it gives very important details of the product such as weight, price, date of production, date of repack, date of expiry, usage details, customer care details, nutrition level and barcode. Full of protein, vitamins and minerals to help keep kids active and healthy. Anchor is an exclusive brand name of Fonterra, which is trusted by Sri Lankans.

c). Expected Product The Expected product benefits are as follows Nutritional values such as Vitamins, Milk Protein, Milk Fat, Carbohydrate, Riboflavin, Folate, Vitamin B12, Calcium, Sodium and Potassium. Consistent quality Source is from New Zealand, which is very popular for pure and healthy milk. Very good taste. Social respectable status. Various pack sizes - 75g, 250g, 400g, and 1kg.

d) Augmented Product The Augmented product benefits of Anchor Full Milk Powder are as follows. Every Drop is Guaranteed and 125 years of Proven Nutrition are the guarantees given to consumers. Manufactured World Health Organizations standards, which gives additional values to this product. Giving more milk protein and more milk compare with other milk powders. Agglomerated milk powder, which helps it to dissolve very well with water, which enables to no lumps in milk.

e) Potential Product The potential product levels to Anchor Milk Powder are given below. Introducing a small milk bag for a single glass of milk, similar to that the tea bags are in the market, which helps customers for individual consumption. Creating a Facebook/Twitter clubs for the mothers, to give awareness. Having CSR activities to the preschools. Even though Sri Lanka is a small country, Can introduce geographical segmentation, such as a special milk for the peoples of coolest part in Sri Lanka and a special cool milk for the peoples of the hottest part in Sri Lanka.

Findings and Conclusion

I found that success of Anchor Full Cream Milk Powder in Sri Lanka is because of the effective Marketing mix by Fonterra. Understanding the organisational buying process is the vital part of the success of a B2B organisation.

References
http://www.fonterra.com/ http://www.island.lk/2010/02/25/business6.html http://anchorpediapro.com/ http://www.expack.lk http://www.anchorinstitute.com http://sundaytimes.lk/120101/BusinessTimes/bt17.html Philip Kotler. Marketing Management, 12th Edition G.S. Sylvester. Preliminary Certificate in Marketing Recommended Study Text, Sri Lanka Institute of Marketing Presentation Slides of Mr. Bharatha Herath, PCM Lecturer, SLIM, Kandy.

Limitation

2000 words to the assignment body. One month period to complete the assignment.