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.

It’s 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 DMU’s 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 : The Examiner

From : PCM Student

Subject : 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) Ltd’s

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 OLCL’s buyer behavior towards Expack

Corrugated Cartons (Pvt) Ltd.

In task 04 I analyzed Anchor Full Cream Milk Powder’s 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. Anchor’s product portfolio as follows.

Table 1.1- Product portfolio of Fonterra Brands Lanka (Pvt) Ltd

Product Target Market

Anchor Full Cream Milk Powder

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 Description

Regular Slotted Case

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

Description Key Unique Feature

Variety 2 varieties, Anchor Full Cream Milk Powder

and Anchor Full Cream Milk Powder Instant.

Created TOP of the

mind awareness to

the customers.

Customer buys

Anchor for

maintain his status,

rather than buying

a local milk

powder.

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 Highlights about the nutritional factors.

Brand Name 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, and outer pack is

informative.

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

Description Key Unique Feature

List Price Retail prices

Anchor 75g - Rs. 58.00

Anchor 250g - Rs. 165.00

Anchor 400g - Rs. 325.00

Anchor 1Kg - Rs. 810.00

Anchor Instant 400g - Rs. 325.00

Anchor Instant 1Kg - Rs. 810.00

Maintaining a high price

& high quality strategy

when comparing with

its competitors.

Fonterra has introduced

“Rathi” full cream milk

powder as a fighter

brand to fight with

competitors, with a Sri

Lankan name, with

lesser price. While

Rathi full cream milk

powder fighting with

competitors, Anchor

Full Cream maintaining

its premium pricing

with its high quality.

Strategies Physiological pricing strategy, Price is

competitive but always maintaining a

premium price comparatively, to show

customers it’s high quality.

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.

Payment

Terms

Trade - Cash and cheque.

Distributor – Cheque

Credit Terms 7 to 10 days credit to distributor

4 to 10 days credit to the dealers

c) Place attributes

Table 2.3 - Place attributes of Anchor Full Cream Milk Powder

Marketing

Mix Elements

Description Key Unique Feature

Channels Detailed diagram of distribution channels

are given in figure 2.1.

They not cover entire

shops in Sri Lanka, but

due to the brand power

and consumer demand,

product reach almost all

potential outlets.

Coverage Approximately cover around 40,000 outlets

directly.

Locations Placed it in all possible outlets

Transportation Distributor/Direct Dealer has to provide

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

Whole Sale Shops

Retail Shops

Customer

Direct Dealers Modern Trade

d) Promotion attributes

Table 2.4 - Promotion attributes of Anchor Full Cream Milk Powder

Marketing

Mix Elements

Description Key Unique Feature

Advertising Always promoting with the theme of

“Mothers endless love, to her child”.

Always targeting mothers

emotional relationships

with her child, also

highlighting nutrition

factors in their advertisings,

because Fonterra identified

that mothers are the major

decision makers, when

purchasing milk powders.

Personal

Selling

Shop to shop visit

Public

Relations

Special activities for mothers and

children.

Sales

Promotions

Promotions in modern trade, specially

“Best Buy” promotions in “Cargills Food

City”

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 Powder’s success in Sri Lanka.

d) Well blended

Anchor Full Cream Milk Powder’s 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 Needs

Description

OLCL’s general needs descriptions of cartons are

High Quality carton to store food products.

Maintenance of Consistent quality

Printing cartons as per OLCL’s 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

OLCL’s 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 OLCL’s 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 routine

Specification

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 DMU’s of Selected B2B Buying Process.

Expack has identified the DMU’s 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 Selected Buying Center Member

Initiator General Manager – Production

User Production Manager and Packaging Materiel Stores Executive

Influencer Quality Manager

Buyer Purchasing Executive

Decision Maker Director Operations

Approver Managing Director

Gate Keeper 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

4.1 Introduction of selected product

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

Basic Product

Expected Product

Augmented Product

Potential Product

Core 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 Vitamin’s, 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.