Maggi’s New Flavours – Launched in New Style

Place and distribution strategy

The approach used and the process involved by a company to distribute their items or service to the consumer is known as place strategy in marketing mix. The customer must get the product at the right place and at a right time. Efficient and effective distribution is significant when an organisation plans to achieve the overall marketing objectives. The turnover will be at stake if the market demand is taken for granted.

A small video presentation for the is same is here.
Source: (YouTube, 2016)

Distribution channel members comprises of manufacturers, wholesalers, retailers, consumers, etc.

And this channel has been designed involving various combinations of these channel members. There a three types of channels viz. intensive distribution, selective distribution and exclusive distribution
Analysis for Nestlé’s Channels of Distribution:

Retail: It is a distribution centre for a number of products in a particular warehouse or other specialised set up or a store to cater directly to the customers at their nearest vicinity. These, stores could be a general store, a super market or a convenience store.

Online: with the facility of buying products from internet the companies are adapting online marketing for easy and effortless consumer experience, and many other benefits that the customer gets from buying from the internet.zchtplaceindirectSource:(Yorku.ca, 2016)

Nestle has introduced new flavours under Maggi Hot heads specifically for young adults. The product being in a snack industry under the fast-moving consumer goods (FMCG) nestle has naturally opted for intensive distribution. Intensive distribution generally goes with heavy promotion, acute prices, with many products.

 

hotheads
Source: (Anon, 2016)

Intensive Distribution deals with the distribution of products priced low or compulsive purchases. Nestle India Ltd. Nestle had announced the launch across India of the fresh variants of Maggi instant noodles. Nestle abides by the FMCG strategy of distributing that engages rupturing the volume.  And particularly they have launched the product in a combo deal with an online marketplace retailer namely SnapDeal.

 

Details of Design Strategy used by Nestle:

Push and Pull strategy make it easy for the flow of products from the suppliers to the manufacturers and ultimately to the end consumer.

Pull Strategy: Nestle induces the customer by offering customers to pull products from the channel. They achieve this by heavily advertising their products to the customers, and by offering discounts or promotional offers or coupons or rebates, etc. Nestle has made a promotional offer on the online launch of Maggi hot heads brands by giving combo packs at discounted prices. From last 5 years nestle has spent each year a $48M USD to $70M USD on advertising and sales, More on this.

The significant benefits of using pull strategy is that it gives the organisation an opportunity to have a direct contact with the customers. Receive an instant payment since the customers do not have a term loan or grace days to payment, instead make an online or in shop at the cashier. The company have more room for margin since the intermediaries’ spot is now vacated. It facilitates the customers to come up with new ideas (Smart Insights, 2013).For disadvantages I’d refer you to this blog.

Push Strategy: Distribution partners are induced by nestle to push the products through the channel. They capitalise it by offering incentives to the sales force, advertising partners, price discounts and offer allowances for marketing activities. However, if there is a major retailer or a supermarket the then the problem of home brands replacing the established product arises.

As markets, the environment and customers are open to change it’s best to use a combination of both strategies.

internet-distribution

 

But by far the best distribution till date is online distribution. The benefits are endless and growing. Thus, the companies must place the product by understanding the customers needs and develop a strategy for the most effective distribution channels and allocate resources across channel options.

I Hope you enjoyed thoroughly!!
Compliments and Feedback will be highly appreciated!!

Thanks,
Dhaval Salla

 

Refrences

 

Anon, (2016). [online] Available at: http://i.ndtvimg.com/i/2016-06/hot-heads-on-snapdeal-625_625x437_61466746308.jpg [Accessed 26 Sep. 2016].

Yorku.ca. (2016). [online] Available at: http://www.yorku.ca/lripley/zchtplaceindirect.jpg [Accessed 26 Sep. 2016].

lacobucci, D. (2014). marketing management. 4th ed. mason: cenage learning.

YouTube. (2016). Marketing Mix: Place Strategies. [online] Available at: https://www.youtube.com/watch?v=r2JJYyeKOkk [Accessed 26 Sep. 2016].

oppewal, H., tojib, D. and Louvieris, P. (2013). experimental analysis of consumer channel-mix ue. journal of business research, pp.66 (11), 2226-2233.

Smart Insights. (2013). The Push and Pull product distribution model – Smart Insights Digital Marketing Advice. [online] Available at: http://www.smartinsights.com/marketing-planning/marketing-models/push-pull-product-distribution-model/ [Accessed 26 Sep. 2016].

Who Wins? Taste(Kids) Vs. Nutrition(Mothers) I’d say- Bournvita Biscuits

The STP Strategy

The three vital stakes of contemporary marketing strategy are segmentation, targeting and positioning Source: (YouTube, 2016). Today’s line of attack is to acknowledge that there are diverse requests in the commercial centre and that a product or service should be customized particularly to meet these contrasting requests to capitalize the opportunity for utmost success.

Segmentation:
To triumph this, initialize with exploring the business sector, well the identification procedure should be given high attention, that how optimally demands could be segmented amongst the buyers who varies from each other for their buying behaviour and product or service necessities. Identifying and applying this marketing technique gives the product its unique quality which advances the organisation to stand out in the competitive market (Anon, 2016).

maxresdefault2

Source: (I.ytimg.com, 2016)
TEXT (in the picture): SUBAH KA BISCUIT = BISCUIT FOR MORNING

 

Strategy used by Cadbury -now- Mondelez India Foods

stp 1 imge

Source: (Anon, 2016)

Geographic Segment: (Ambwani, 2016) Bournvita Biscuits has been specially established for a specific country i.e. India. They have identified its growth after their first product Oreo in India, which comes as the 5th biggest market for Oreo. “India is not only contributing to the growth of Mondelez, but it is also offers tremendous future growth potential for the company. We are demonstrating this through our investments that we have made to enhance capacity, and expand cold-chain infrastructure,” Chandramouli Venkatesan, Managing Director, Mondelez India Foods(Ambwani, 2016).

A quick glance on why India’s future on Biscuits and Cookies Industry (ValueNotes Strategic Intelligence, 2016) is going to be strong.

 

Psychographics Segment: Mondelez India Food has developed a product, which has selected kid’s favourite morning health beverage which is loved by the mothers, for offering high nutritional value and blends them perfectly into a biscuit, with this it attempts to influence the attitudes and personalities of their perspective buyers (Anon, 2016).

 

Demographic Segment: This brings the pin-points the age – 0-16 (kids) and the 21-45 (mother) at the same time sex- Female (mothers)

 

Behavioural Segment: (Anon, 2016) It has analysed that almost 50% of the biscuits have been consumed in the morning and, since the beverage has always been a morning drink. It’s been a purposively designed and Titled as a “Biscuit for Morning” Bournvita biscuits to capture the morning snacking product

With this I would like to conclude the Strategy used to develop in Segmentation founded by (Abledd,1978) cited in(Anon, 2016)  who mentions segmentation’s core significance that segmentation may spearhead to high earning opportunities and strategic windows that permits new competitors to contest proven market leaders

01_bournvita

Source: (S3.firstpost.in, 2016)

Market Targeting

A target market is the market or segments of market which comprise the emphasis of the organisations’ marketing endeavours (Anon, 2016).

Strategy used by Cadbury -now- Mondelez India Foods

Single marketing Strategy: Mondelez India Food is taking a risk of putting everything at stake with focusing on their previous achievement in the nutritive beverage drink and successful biscuit Oreo by assuming the extraordinary response for this innovative product line (Anon, 2016).

Factors Influencing Choice of Targeting Strategy

Stage of product-market maturity for Mondelez India Food will enjoy no completion. They already have a wide and undifferentiated and untapped target market.

 Extent of buyer differentiation for Mondelez India Food has less opportunity for an extensive segmentation since their buyer’s needs are similar when compared to markets for buyers with different needs.

Market position for Mondelez India Food has relatively a higher market share and this plays a significant role in determining the target market it will penetrate in. And adding to this they have established their core strength i.e. the love for the child’s taste in the morning beverage product Bournvita, which they have innovated to reach out to the kids and influence their mothers by their unique quality of having the nutritive element to it.

Capture

Source: (Economictimes.indiatimes.com, 2016)

Positioning

It is the most vital call and action plan that management takes for the firm and its marketing – Davis, 1977(Anon, 2016) .Though it is one of the most controversial area of new product development – (Marken, 1987) cited in (Anon, 2016).


Qualitative approaches to Positioning Research-
Utilizing secured techniques in the process of qualitative research, pictures can be traced that serves the purpose of how branding of a firm is positioned in the mind of the observer. Some of these are (i) the brand of the company as an animal or a person. (ii) Role Play. (iii) The friendly Martian.

The strategy used by Mondelez India Food is Role Play(Anon, 2016). As they have publishing their advertising across social media. In this Advertise their idea as to project Mother who rises up early morning and sets the platform for her kids to perform gymnastic skills and gives them these biscuits as their mid-morning snacking biscuit.

This gives a stimuli to most of the viewers and helps them in articulating the product’s use and/or associate them to it. These include:

  • Association technique.
  • Concept Boards.
  • Animatics.
  • Cartoon and story completion.
  • (v) Visual product mapping.

Before I open the window to welcome your compliments I’d like to link you to the advertising campaign published by Mondelez India Food Source: (YouTube, 2016) to strategically SEGMENT, TARGET & POSTION Bournvita Biscuits.

 

-Thank You for Enjoying the blog
D.R. Salla

 

 

 

 

 

 

References

 

Ambwani, M. (2016). Cadbury Bournvita Biscuits to hit shelves in May. [online] The Hindu Business Line. Available at: http://www.thehindubusinessline.com/companies/mondelez-india-launches-cadbury-bournvita-biscuits/article8494083.ece [Accessed 8 Aug. 2016].

 

Anon, (2016). [online] Available at: http://eds.a.ebscohost.com.ezproxy-f.deakin.edu.au/eds/pdfviewer/pdfviewer?sid=3638b8f2-e0c1-4681-a124-b48522112db1%40sessionmgr4007&vid=1&hid=4102 [Accessed 8 Aug. 2016].

 

Anon, (2016). [online] Available at: http://www.dnaindia.com/money/report-with-cadbury-s-new-biscuits-mondolez-india-eyes-morning-market-says-chella-pandyan-2231041 [Accessed 8 Aug. 2016].

 

Economictimes.indiatimes.com. (2016). [online] Available at: http://economictimes.indiatimes.com/thumb/mondelez-india-promotes-bournvita-biscuits-as-subah-ka-biscuit-via-new-ad/52620365.cms?width=300&height=191 [Accessed 8 Aug. 2016].v

 

I.ytimg.com. (2016). [online] Available at: https://i.ytimg.com/vi/tRWvopZ3YSg/maxresdefault.jpg [Accessed 8 Aug. 2016].

 

S3.firstpost.in. (2016). [online] Available at: http://s3.firstpost.in/wp-content/uploads/2013/06/01_Bournvita.jpg [Accessed 8 Aug. 2016].

 

ValueNotes Strategic Intelligence. (2016). Biscuits and Cookies Industry in India 2015-19 – ValueNotes Strategic Intelligence. [online] Available at: http://www.valuenotes.biz/insights-publications/publications/biscuits-and-cookies-industry-in-india-2015-19/ [Accessed 8 Aug. 2016].

 

Anon, (2016). Bournvita Biscuits debut in India. [online] Available at: http://www.mondelezinternational.com/newsroom/our-stories/bournvitaindia [Accessed 8 Aug. 2016].

 

YouTube. (2016). New Bournvita Biscuits TVC 2016 – Subah Ka Biscuit. [online] Available at: https://www.youtube.com/watch?v=mK-GixtiTpI [Accessed 8 Aug. 2016].

 

YouTube. (2016). Segmenting, Targeting, and Brand Positioning Application Idea. [online] Available at: https://www.youtube.com/watch?v=5btiQlLKGyc [Accessed 8 Aug. 2016].

 

Is Apple – Futureproof?

Currently Apple has the highest revenue ($233 billion) in the technological industry, making a profit of $53 billion, with $586 billion market cap for the previous year. These achievements qualify apple as the largest tech organisation as well as lands in the 8th biggest company in the world. And, 4th biggest in the North America on the Forbes Global 2000 (Forbes.com, 2016).

Apple, under Tim Cook’s leadership, still outperforms its competition in every aspect that could be measured. Simultaneously apple also passed the news for the iPhone sales falling-off for the first time ever since its inception. And, with the later news some speculators suspected that the company’s golden period is over (Forbes.com, 2016).

chartoftheday_4149_iphone_sales_n

Source: (Richter, 2015)

Stock price of apple was dipping with the release of iPhone 6 and 6 Plus, in contract to the increase in the shares by 33% in the second half of the year, the increased market swapped the extreme losses in the first half. The downfall in the stock price was seen after the release of the report of the1st Quarter’16. Tim Cook is faced a lot of pressure in context to showcasing lack of innovation (Marketrealist.com, 2016). Since Apple is yet to launch any trendsetting products, although an iTV is speculated. It is believed to be a new bunce opportunity. It will be a totally new genre apple will tap and there’s plethora of information regarding the same (Marketrealist.com, 2016).

The need of the hour for Apple is to turn the tables, specifically for its new iPhone, since the iPhone 6s sales figures did not meet the expectation. And the speculators like the wall street analysts and Deutsche Bank Research Note have noticed about Apple’s Strategy for its new iPhone 7 is that Apple is on a three-year upgrade cycle, as opposed to the earlier strategy it used to follow launching new model every alternate year. It typically took the same hardware and improvised the components. Whereas, the iPhone 7 will have a few upgrades, it will stick to the same external design (due to three-year upgrade cycle). Now, Apple argues it has made a three-year lifespan for its first owner.

 

Strategy analysis – BCG Matrix

growthshare

Source: (Netmba.com, 2016)

At the moment it is a Question mark. So let’s evaluate the iPhone 7 in the market and see how well will it pull out the revenue. (Inc.com, 2016) With the findings of Quartz it suggests that the only 10% of the current iPhone owning adults are hoping to buy the new iPhone in the current year if it is not redesigned. And, as apple supports its three-year plan for its first owner, they will probably make less iPhone units this year. This makes assures us that iPhone 7 will not be a Star. So according to the BCG matrix, if the iPhone 7 is analysed then it will be clear that though the sales volume will not exceed the iPhone 6 unit, but it will still have lots of iPhone 5, 5c and 5s owners who will be keen to upgrade to the latest iPhone version available and it will also attract non-iPhone users as well. Hence without investing huge money on an already successful product Tim Cook will still manage to have an edge in the market by generating maximum profits incurring minimum additional cost/expense on the product development, as compared to the costs involved in developing the new product and which might attract new risks altogether. Hence, iPhone 7 will be a Cash-Cow for Apple, which apple must have already discovered.

 

Product Differentiation

 

(Marketrealist.com, 2016) Apple tries to hike the market demand for its products by differentiation, that requires making its products unique and attractive to the consumers. Apple has always built products with superior quality and never gave attention to the high prices it costed the brand to be the number one brand today. So, understanding that the customers have a willingness to pay more and thus, it maintains a premium price to the cost of unit volume, Apple has managed to create an artificial entry barrier to competitors.

c77a464e4c63b23bc4c2ddb6318b4eee.jpg

Source: (S-media-cache-ak0.pinimg.com, 2016)

Though iPhone’s sales were lower than expected, Apple is still leading the market leaving behind Google and Microsoft its’ industrial competitors’, with a huge difference. Apple is not giving a blind eye to the dipped sales, in fact they have made the made a clever move to reduce the cost on producing a new phone and bringing the new and unexpected risks with it, they have smartly gained on maximizing the profit, investing a little on the upgrades. Apple iPhone initially pulled the customers by surprising them each time with each launch. But now since they are market leaders. It’s time for them to enjoy the fruits, and also hiked the standards for its competitor’s as well.

i’d say Well played.

 

 

dhavalsalla – 215228659

 

 

 

 

 

References

Forbes.com. (2016). Forbes Welcome. [online] Available at: http://www.forbes.com/sites/samanthasharf/2016/05/26/the-worlds-largest-tech-companies-2016-apple-bests-samsung-microsoft-and-alphabet/#3e93084e89ee [Accessed 25 Jul. 2016].

Inc.com. (2016). Why Apple’s New iPhone Strategy Is a Huge Risk. [online] Available at: http://www.inc.com/business-insider/apple-huge-risk-new-iphone-strategy-hopes-boost-sales.html [Accessed 25 Jul. 2016].

Marketrealist.com. (2016). Apple’s premium pricing strategy and product differentiation – Market Realist. [online] Available at: http://marketrealist.com/2014/02/apples-premium-pricing-strategy-product-differentiation/ [Accessed 25 Jul. 2016].

Marketrealist.com. (2016). Why innovation could be the key to Apple’s growth – Market Realist. [online] Available at: http://marketrealist.com/2014/01/apple/ [Accessed 25 Jul. 2016].

Netmba.com. (2016). [online] Available at: http://www.netmba.com/images/strategy/matrix/bcg/growthshare.gif [Accessed 25 Jul. 2016].

Richter, F. (2015). Infographic: Have iPhone Sales Peaked in 2015?. [online] Statista Infographics. Available at: https://www.statista.com/chart/4149/iphone-sales/ [Accessed 25 Jul. 2016].

S-media-cache-ak0.pinimg.com. (2016). [online] Available at: https://s-media-cache-ak0.pinimg.com/236x/c7/7a/46/c77a464e4c63b23bc4c2ddb6318b4eee.jpg [Accessed 25 Jul. 2016].