17431809 Strategic Marketing at DALDA

8/8/2019 17431809 Strategic Marketing at DALDA

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Executive Summary

This report focuses on the followingareas:

Target Market and market segments

Product Positioning

Consumer Markets and Consumer Behavior

CompetitorsProduct 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 detailand Levers Strategies regarding the

promotion of Dalda brand are also covered.

Swot Analysis has also been discussed.


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Preface

This report is an application of theMarketing 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 intothe creative world of marketing. we need to know

how vital role marketing plays in anyorganization as they all reach out to satisfycitizen and customer needs, providing them

value resulting in company profits. our aim wasto objectively analyze these principles as applied

in the business environment in Pakistan.


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Acknowledgements

My heartiest gratitude to everyone who

helped me in carrying out this study.

Special thanks are due to Ms. Sara Khan

for her much needed guidance.

We are deeply thankful to Mr. Chaudhary

Mohammad Basharat (Group Marketing

Manager) and Mr. Shehzad Khan (Product

Manager) for their valuable assistance.

Our heartiest regards to Mr. Naeem Khokar

(ex Business unit Manager ODF).


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Unilevers Philosophy

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.


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Unilevers Corporate Purpose

Our purpose in Unilever is to meet the everyday needs of peopleeverywhere 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 areour 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 togethereffectively 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 inwhich we live.

This is Unilevers road to sustainable, profitablegrowth for our business and long-term value creation

for our share-holders and employees.


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Unilever History

Today, Unilever the Anglo-Dutch consumer goods business is oneof 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 forthem. 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 instigatedhim to stock and to add outlets and distributors. Lord Lever Hume was

the buying man, manufacturer, production manager, quality assurancemanager, distribution manager, marketing manager and everything of

the company. He soon established soap factories in Europe, NorthAmerica, Australia and the Far East, and oil mills at Port Sunlight inthe UK and Balmain, Sydney in Australia. His diligence, hard work

and passion for innovation added different products to the Levers

product mix.

The reasons behind the creation of Unilever in 1929, when it was

created by the merger of Margarine Unie and Lever Brothers, weresound 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 ofsupplying goods for household needs.

After 1917 he moved into the food trade, acquiring fish shops andcanned 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


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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. By1986 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 Unilevers packaging companies and the majorpart of its agribusiness interests were also sold, leaving four core

product groups - home and personal care, foods and specialtychemicals - 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 Companys resources has been

invested in emerging economies, growing from 16 per cent of totalUnilever investments in 1985 to 27 per cent in 1996.

Unilevers 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 frozenfoods 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 isnow well placed to meet the opportunities in developing and emerging

markets which the twenty-first century will offer.


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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&BOil 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. Furtherdiversification on the foods side of the business has taken place with

the introduction of margarine and cooking oils. They have a seedsbusiness, an industrial detergents business, and an ice cream business.

Unilever had acquired Liptons business worldwide In Pakistan Lipton

was merged with LBPL in 1984. Legal merger became effective in1989.


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Product Lines in Pakistan

Personal

wash

Fabrics&ho

me care

Personal

product

Oil & dairy

based

products

Walls ice

crme

Beverages

Hard soaps Fabric wash Hair care Banaspati Lipton\Brook

Bond(Leaf Teas)

Lifebuoy Surf SuperActive

Sun silkshampoo

Dalda Cornetto Yellow Label

Lifebuoyplus

Micro surf Lifebuoyshampoo Cooking oil

Feast Supreme

Lifebuoygold

Surf excel Harmonysoap

Daldacooking oil

Top Ten Top Star

Toilet soaps

Sun lightwashingpowder

Skin care Daldasunfloweroil

Star Cup Richbru

Lux Sun lightsoap

Fair &lovely skincrme &lotion

Plantacooking oil

Calippo Taaza

Rexona Wheel Dental care DaldaLajawab Split BB Tips

Le SancyHome Care

Closeuptoothpaste Margarines

Fruiti Red Label

Lyril Vim Powder Pepsodent Blue Band Paddle Pop Dust Teas

Vim Bar Master Line 3-D Pearl Dust

IndustrialFats

Solo Ruby Dust

Oils and

Ghee

Mini Milk Kenya Mixture

Spread Howzat Super Dust

Take Home1 Ltre Pack

Red Rose

Polka


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ODF Division Product Line

This report concentrates on the Dalda brand of ODF Division of Lever BrothersPakistan

The ODF division is catering both to the consumer markets and the businessmarkets. 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 lineof products is called the Masterline.

Daldas History

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& levers interaction with Dada Co. insigned L in Dada and it was called asDALDA the brand of Indo-pak.

Y e l l o w f a t s

B a n a s p a t i g h e e C o o k i n g o i l

C o o k i n g f a t s & o i l s

O D F D i v i s i o n


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LEVELS OF A PRODUCT

Core Product

Cooking needs fulfilled (all products)

Actual Product

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% polyunsaturated.

Easy to open tins packaging applies to all the oils and ghee products.


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Augmented Product

ODF products have little or no augmented features as repeated buyingand 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.


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MARKET

The set of all actual and potential buyers

of a product or service


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Levers Interaction with Its Market

The target market of Lever comprises of health, quality and taste

conscious people, hence Levers commitment to tailor its products

according to its customers is evident from the fact that launching ofeach 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 nowavailable in Karachi and Islamabad.

Levers Generic Strategies

Market Penetration

Promotional activities are increased during Ramzan, Winters (wedding

season) and Moharram since more oil/banaspati is consumed duringthese months.

Product Development

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, alighter colored, Ultra-refined Dalda was re-launched in November1997. Apart from new features, LBPL also added a new product,

Sunflower Cooking Oil, to the ODF product line in 1991.

Note: Levers R&D has recently come up with Dalda Lajawab which

is elaborated in the Product Section

Market Development

One Litre packs of Dalda cooking oil were added in order to serve thelower 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.


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Market Segmentation, Targeting And Positioning

MARKET SEGMENTATION

LBPL segment their market on the following criteria:

Variable Typical Breakdowns

Geographic

Region Country-wise, province-wise, city-wise, etc.

Demographic

Age Under 25, 25 - 45, Over 45

Gender Male, Female

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.

Psychographic

Social Class A - F Households - A being Upper class and F being the lower class.

Behavioural

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


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TARGET MARKET

Dalda Cooking Oil, Dalda Banaspati, Dalda Sunflower Oil, Dalda

Lajawab and Planta Cooking Oil.

Variable Typical Breakdowns

Geographic

Region Dalda is a nation wide brand. Although its salesare mainly in urban sind and urban Punjab.

Planta Cooking Oil: Mainly Punjab

Demographic

Age 25 - 45

Gender Traditional female housewifeIncome Households A and B *

Households C** (Dalda Cooking Oil)

Education At least Matriculation

Psychographic

Social Class Households A and B*

Lifestyle and Personality Dalda Cooking Oil is mainly targeted athousewives who are more or less in the 25 - 45

age group. This woman is traditional but

educated (at least completed her matric) andloves 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 willbe 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 gheewants to provide her family with a healthier

alternative - though she is not totally obsessed

with health considerations.

Dalda Sunflower Oil is targeted at housewiveswho go for extra health benefits and are extra

cautious about their family's health.


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PRODUCT POSITIONING

Dalda cooking oil: The cooking expertise for the whole family.

Dalda Banaspati ghee: Substitute for desi ghee but healthier withthe 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.


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Consumer Markets And Consumer Behavior

Characteristics Affecting Consumer Behavior

Culture

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.

Subculture

Educated, health conscious consumers use Dalda Cooking Oil more in

the urban areas. The reasons differ for the various consumers forexample there are certain C class households who use Dalda because

it has been used in their families for ages - their mothers used it, theirgrandmothers 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.

Social Class

LBPL has divided the classes in to A to F households. Class A

households are the upper class, high-income groups. In thesehousehold 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 classmost 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.


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Social Groups

Family

Family plays an important part. In all the advertisements, be it

cooking oil or banaspati or margarine, emphasis has been placed onthe 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 winsthe 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.


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Consumer Behavior Roles

Dalda Cooking Oil, Dalda Banaspati, Dalda

Lajawab and Planta Cooking Oil

Initiator:Housewife

Influencer:Family, traditions, advertisements, friends, neighboursDecider: Housewife

Buyer:Husband, Housewife, servant

User:Whole family

Competitive Position And Competitor Analysis

In Pakistan, LBPLs main competitors in the foods section are local or

other specialized one-product multinationals. In home and personalcare, 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, Habibhas also launched sunflower oil in an attractive plastic can packaging.

LBPL mainly concentrates in keeping market share above Habibs asits 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 regionfrom Nawshera to Multan.

Dalda Cooking Oil is a premium priced oil. It provides 30% of LeverBrothers turnover and has 76% of the market share of cooking oils. It

is more dominant in Karachi and other southern cities. Habib and


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Tullo oils are the main competitors for Dalda Cooking Oil. Habibs

recent acquisition of the ISO 9002 award is yet another hindrance to

the growth of Dalda cooking oils in the quality consciousmarket. SoyaSupreme 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 gheeflavored oil positioned to lure health conscious people who grew up

using ghee. They are both very popular in Punjab where gheeconsumption 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.


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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

2.50 ltr 180.00

Planta (LBPL) 5.00 ltr 345.00

2.50 ltr 180.00

Soya Supreme 5.00 ltr 332.00

3.00 ltr 206.00

Tullo 5.00 ltr 323.00

2.50 ltr 172.00

Habib 2.50 ltr (tin) 174.00

5.00 ltr (tin) 303.00

Sunflower Cooking Oil Pricing

Dalda (LBPL) 4.50 ltr 330.002.25 ltr 173.00

Tullo 4.50 ltr 340.00

2.25 ltr 175.00

Brand Packaging Size Retail Price (Rs.)

Banaspati

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


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The Marketing Mix

The marketing mix is the set of marketing tools that work together toaffect the market. The four elements of the mix are, of course, the

product itself; the priceat 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.


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PRODUCT

Anything that can be offered to the marketfor attention, acquisition, use or consumption

that might satisfy a want or need


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Product Classification

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, aretypically staple goods which is true for almost all of the products in

this brand.

Product Attributes

Product Quality

LBPL promises the highest quality for all of its products. As such theODF products are also manufactured to the highest standards. The

consistency in LBPLs promises and the delivered product please

consumers.

Product Features

A products features can set it apart from the competition anddifferentiate 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 bettertasting.

Dalda Sunflower Oil: Lighter and healthier than most other oilsexcept 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 LBPLs ODF products.


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Product Services Personnel Image

TotalCustomerValue

Packs/Tins ofODF products

CookeryProgram

AdvisoryService

Social andEsteem

needs met.

Product Design

Design is more than skin deep, it goes to the heart of the product and a

good design contributes to the products 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.

Dalda Lajawab

Philosophy

Research must be consumer focused and technology driven- a worldwide commitment

Lever has once again demonstrated its compliance with its customer-

oriented policy by the extension of Dalda Lajawab in its current

product line, thats 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. DaldaLajawab

Consistency Medium Heavy Very Light Light

Vitamins A, D, E A, D A&D


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Packaging

All ODF products packaging material is imported. Even the ink usedon the packaging is imported. The packaging is of the highest

standard, at least in the local market. The Dalda brand is available intins, bottles and poly-bags. Planta is available in tins. All packagesare clearly and legibly labeled as to contents and ingredients. Best

before dates are also fast becoming standard. All packages are easyand safe to use. The packaging for the Dalda brand has retains the

same green colour since its introduction 50 years ago.

Branding

Branding is an aspect of marketing at which LBPL seems to excelespecially when we think of the Dalda brand. Since its introduction so

many years ago Dalda has retained the same motherhood and cookingexpert 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:

BRANDS

LEVELS Dalda Planta

AttributesPremium quality, highprestige,

The oil which tastes like ghee.Best of both worlds.

BenefitsTasty food. Cooking ease. Health, nutrition and good

food.

ValuesMotherly love, tradition Motherly love, tradition

PersonalityCooking expert, mother Young educated housewife also

young mother


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Brand Equity

Brand equity is the amount of power and value a brand name carriesin 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. Heres how LBPLs ODFbrands stand:

BRANDS

LEVELS Dalda Planta

Awareness High High

Preference Medium Medium

Loyalty High Medium

Dalda is probably the most widely known of all LBPLs ODF products

and its equity in the market is high. Daldas positioning is that ofcooking 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 disappointthe 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. Itderives most of its equity from the Lever name and from being a sister

brand of Dalda. Dalda Sunflower Cooking oil and Dalda cooking oilhave the target market in the Karachi, Lahore and Islamabad. Dalda

Lajawab is targeted towards A and B class people and is showing

repeat purchases.


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Brand Strategy

Existing Product Category New Product Category

Existing Brand NameLine Extension

(Dalda Cooking Oil)(Dalda Sunflower Oil)

Dalda Lajawab)

Brand Extension

Multi-Brand(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, whichteach 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 stagesand 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.


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RECOMMENDATIONS

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 DALDAS OLD STRATEGY AND

SLOGAN OF JAHAN MAMTA WAHAN DALDAHAS TO BE CHANGED.

CANOLA OIL HAS TO BE LAUNCHED

IMMEDIATELY AS IT IS THE MOST HEALTH

OIL AND IS GAINNG A LOT OF POPULARITY.


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PRICE

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.


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The Price

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).

Products Net Weight Packaging Retail Price

Dalda

Banaspati 5.00 kg Tin Rs. 330.00

2.50 kg Tin Rs. 160.00

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. 180.00Planta 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 andCompetitor 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 singlemarket price. The reason being that sellers can differentiate their

products from each other using quality, features, style andaccompanying 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 sellsits ghee in Poly bags LBPL and Habib differentiate themselves from

the entire market on the basis of quality and so on.

Elasticity

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 goup or down. ODF consumer products have relatively elastic demand

i.e. the amount of LBPLs ODF products is relatively responsive to

price where a change of 5-10 rupees can affect demand. This is


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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 therising inflation is taking a substantial bit out of LBPLs demand curve.

Pricing policy is also being affected by duties being levied on the

import of edible oil. The industry is becoming increasingly competitivewith 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 thecustomer ultimately pays to get the product:

Product Service Personnel Image

TotalCustomerCost

Price paid tobuy LBPLsODF products

Time spent infindingDalda/Planta/Blue Band

Energy spent infinding/usingDalda/ Planta/Blue Band

The psychic cost ofnot buying a foreignODF Brand

Pricing Strategy

LBPLs marketing objective is primarily to tap the upper-middle andupper 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 andpremium 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 inthe 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 fromsatellite channel cookery programs to local TV where they can view

LBPL advertisements.


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The following grid summarizes the above discussion on pricing

strategy:

Higher Price Lower Price

Higher Quality Premium Strategy(Value-based pricing)

Good-Value Strategy

Lower Quality Overcharging Strategy Economy Strategy


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RECOMMENDATIONS

WE FEEL THAT DUE TO HIGH COSTS OF

INGREDINTS THE PRICES OF OIL CANNOT BECHANGED DRASTICALLY,AS THESE

DECISIONS ARE CONTROLLED BY

UNILEVER.

WE SUGGEST THAT THE COMPANY GOES

WITH COST RECOVERY PRICING.

IT SHOULD ELIMINATE SOME DOG BRANDSLIKE DALDA CRISP.

THE MARKET AND COMPETITRION SHOULD

BE ANALYZED TO SEE WHETHER

DISCOUNTS SHOULD BE GIVEN OR NOT.


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PLACE

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


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Place

Lever Brothers Pakistan believes in synergy, that is a perfect blend ofall the components of the marketing mix. Proof lies in it having one of

the most efficient and largest distribution (networks) systems in ourcountry.

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 beachieved. By concentrating on its distribution efforts, it helps LBPL

promote its product and gain an advantage over its competitors.

CHANNEL LEVELS

LBPL aims to achieve maximum retail coverage and is not selective in

its distribution technique. It has no direct interaction with itswholesalers 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

Traditional Channels

Factory Depot Distributor Wholesaler

Retailer

Customer


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FIELD FORCE

LBPL also has a large field that is engaged in helping it manage theretail 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.

Sales Setup

Sales Controller

GSM TMM

Branch Managers Sales CategoryManager

Area Managers

LDM or Territory Managers and JMs


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COLLECTION PROCESS

LBPL has a unique system for the collection of its payments. Thesystem 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 preparethe 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 toany 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 inartificial 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, newerones 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 contractthat specifies the necessary required terms and conditions of the trade.


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Levers Distributorship Process

Lever divides the distributors 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 inbig cities can have more than hundred sections.

Distributors are given 3% profit on sales plus redistribution cost, Octriand 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.


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RECOMENDATIONS

"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


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PROMOTION

Element in an organizations marketing mix

that serves to inform, persuade and remind

the market of a product and the organization

selling it.


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PROMOTION

LBPL being a market-oriented and customer-centered company itsmarketing efforts are relatively the most.

The most concentrated promotion techniques used are televisionadvertisements. 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.

Visibility 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 vendors shops, sign boards,buntings, flags etc.

Media Marketing

Lever uses different news papers and magazines in promoting Dalda

but the major emphasis is on advertisements, shown at the times lovingmothers are watching TV The ads also run at different times of the day

specially between 6.30 to 7.30.

DALDA

The punch line has remained the same through the ages, which hasturned 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 cheerfulfamily. 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 fourmonths.

Re-launch: The color of the oil was lightened as sales werent pickingup 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 andhealth. Concentration was more on the color change.


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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 allocatedtowards 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 heavilytowards its target market.

Sales Promotion

It also plays its role in promoting Dalda by arranging different events

like cooking contests, games and shows.

Personal Selling

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 tothe retailers.

Other mediums

Print ads in magazines such as Women's Own, She, etc. and those

read by the average but literate housewife. Buntings, posters, tradeflags (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 ofdishes. The viewer will also remember the brand name through the

message Dalda Ka Dastarkhawn. A housewifes best friend in every

way.

The symbol and the color of the tin is also a good way to communicate

to the consumer who cant read but can easily recognize the tin by thepalm leaf symbol or the yellow and green color scheme.

There is an advisory service for the convenience and help of theconsumer a cookbook to gift and keep. A videocassette of the televised

cookery show.


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Sales promotion is done to increase sales build image of product in the

consumers so called black-box and develop a relationship with yourconsumers.

Premiums are offered during Ramazan or offers like a free chat masalapacket, 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. Brandpositioning used is about benefits of the product itself.


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RECOMMENDATIONS

WE FEEL THAT LBPL SHOULD ADVERTISE

THE ODF PRODUCTS ON SATELITTE AS WELLAS 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 BERELAUNCHED 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.


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SWOT ANALYSIS


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STRENGHTS

1. DALDAS products have the largest market share in Pakistan in

oil and banaspati market.

2. DALDAS products have very high customer loyalty.

3. LBPL takes care in keeping the highest quality of the products it

produces.

4. The product range of the entire ODF division has very brand

awareness.

5. in the banaspati category DALDA is the only fat free brand.

.

WEAKNESSES

1. DALDA is a very old brand their has been very no change inpackaging since ages, people feel that the new better packaged

brands have better products.


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THREATS

1. BANASPATI and OIL is also sold loose to a large rural market.

2. 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 daldas and plantas decline in market

share.

3. The overall market of oil and banaspati is declining.

OPPORTUNITIES

1. The company can cash on dalda to introduce new products,

they have a large market share in the central and northern

areas of Pakistan.

2. People in the metropolitan areas are inclined towards branded

products.

3. the fat free banaspati is still popular and can be advertised to

gain the market in health conscious people.


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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

Growth

Low

Market

Growth

High Market Low Market

Share Share


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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.

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17431809 Strategic Marketing at DALDA

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