Term paper on Marketing Strategy For The Ice Cream Sector

Marketing Strategy For The Ice Cream Sector Essays

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TABLE OF CONTENTS ITEM DESCRIPTION PAGE # 1. EXECUTIVE SUMMARY 3 2. SITUATIONAL ANALYSIS 4 3. MARKET SUMMARY 5 4. MARKET OVERVIEW 5 4.1 Macroeconomic Overview 5 4.2 Industry Overview 6 5. SWOT ANALYSIS 5.1 Strengths 7 5.2 Weaknesses 7 5.3 Opportunities 8 5.4 Threats 9 6. COMPETITOR ANALYSIS Table 1: Competitive analysis of lubricants market in S.A. 10

7. PRODUCT OFFERINGS 12 8. KEYS TO SUCCESS 12 9. MARKETING STRATEGY 12 10. MISSION 13 10.1 VALUES 13 11. OBJECTIVES 14 12. TARGET MARKET 14 12.1 SIZE OF MARKET 14 13. STRATEGIES 13.1 Sales and Distribution Strategies 15 13.2 Promotion Strategies 15 13.2.1 Promotion Strategy 15 13.2.2 Industry Exhibition 15 13.2.3 Packaging 16 14. MARKETING MIX 14.1 Product 16 14.1.1 PCMOS 16 14.1.2 HDEOS 16 14.1.3 Industrial Lubricants 16 14.2 Price 17 14.3 Promotion 17 14.4 People 18 14.5 Customer support 18

15. RECOMMENDATIONS 15.1 Organizational Factors 18 15.2 Sales Organization 18 15.3 Personnel count Projection 18 16. BIBLIOGRAPHY 19

UNILEVER COMPANY MISSION "Our purpose in Unilever is to meet the everyday needs of people everywhere - to anticipate the aspirations of our consumers and customers and to respond creatively and competitively with branded products and services which raise the quality of life". "Our deep roots in local cultures and markets around the world are our unparalleled inheritance and the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers - a truly multi-local multinational." "Our long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively and to a willingness to embrace new ideas and learn continuously. " "We believe that to succeed requires the highest standards of corporate behaviour towards our employees, consumers and the societies and world in which we live. " "This is Unilever's road to sustainable, profitable growth for our business and long-term value creation for our shareholders and employees"

2. COMPANY BACKGROUND Unilever is part of an Anglo Dutch fast moving consumer goods manufacturer and marketer, one of the largest of its kind in the world. Unilever South Africa is headquartered in Durban with facilities in Johannesburg, Stellenbosch, Durban as well as Pietermaritzburg and consists of four Operating Companies: Lever Pond's, Unifoods, Ola and Hudson & Knight. Unilever is also represented in South Africa by Elizabeth Arden. Because Unilever has a policy of marketing the brands and not the company. The result is that they have been an integral part of life in South Africa without the consumer being aware of it.

The following operating companies fall under the umbrella of Unilever South Africa

Unilever South Africa has Regional Innovation Centres that are a part of the ongoing research and development that Unilever continually conducts around the globe. It is this international status that makes this company such a dynamic and forward thinking company. Unilever South Africa has brand leaders in virtually every sector in which they operate. Apart from the massive investment in providing training for their people, Unilever is also the largest advertiser in South Africa, spending many millions annually in support of their brands. The focus of this report will be the operating company Ola South Africa Pty (Ltd) It will show what the current macro environmental trends are that influence consumers and how the current marketing strategy of Ola must be adjusted to suit the ever changing needs of the customers. It will give a future course of action regarding how the Product, Promotion, Place and Distribution of Ola Ice Creams should be adjusted with accordance to the new changes in the industry and the environment. . MARKET SUMMARY . MARKET OVERVIEW The Following trends and issues will impact on the success of Ola South Africa. Macroeconomic Overview Distribution of income The distribution of income is changing drastically as the emergent black middle class starts to displace its white counterpart. A greater percentage of black people are now found in middle and upper living standards category. The black middle class constitutes 8% of South Africa's 12million economically active black people. Social Class - Social class strongly influences consumer lifestyles, and is a good predictor of resources. People buy products to demonstrate their membership in a particular social class , and consumers also purchase goods that will help advance their social stand. Segmentation should ensure that social class is taken into consideration in relation to the target market. GDP growth rate - The anticipated growth rate for the year 2001 to 2002 is between 3 and 3.5%. The inland consumption rate is also expected to grow in line with this growth in GDP.

 Inflation . Interest Rates - Interest rates have been decreasing since 1999. An interest rate cut is expected towards the end of 2001. The consequences are that people will have more disposable cash to spend on luxury items such as ice-cream. Price of Oil - So far in 2001, the crude oil price has been unstable reaching a high of $31 per barrel. These increases have made the market unstable and more than one industry price increase has occurred in less than 6 months. The outcome of this for the consumer is an increase in the price of petrol. This influences the disposable income available to spend on luxury items and so far in 2001 the price of petrol has increased more than once. Health factors - The HIV pandemic also influences the amount of disposable income available to consumers, the cost of medication for anti retroviral drugs is very high and escalating medical costs eats into the consumers disposable income Climate - The climate in Africa is ideal for the consumption of ice-cream which is a seasonal summer product. Our winter is shorter and not as extreme as that of Europe so our total consumption should easily be more than that of other European countries Eating out - The trend of eating out is growing and and over the past 10 years has increased from 15 % to 30%. 4.2 Industry Overview 5. SWOT ANALYSIS The following SWOT Analysis captures the key strengths and weaknesses within the company and describes the opportunities and threats facing Ola South Africa. 5.1 STRENGTHS Distribution - Ola has a very strong distribution channel. They have 32 exclusive concessionaraires who agree not to deliver other brand of ice-cream. In addition the company supplies branded freezers to its retailers free of charge, but they are not to be used for rival brands. Inevitably, the majority of retail outlets do not have room for more than one freezer. Strong brand - Magnum is the number one selling luxury ice cream in South Africa as well as the world. It currently enjoys over 60% of the market share in South Africa Resources - Ola has been very successful in other countries and this has resulted in products like magnum being 50% bigger than any other ice cream brand in the UK. Knowledge acquired from other countries with regards to these products can be utilised in South Africa, her the product life cycle has not reach the full maturity is enjoys elsewhere in the world.

 Technology - The aquisiton of the Portable Data Terminals. and the PS8000 printers which ensure immediate tracking and verification of fixed assets, as well as a means to generate sales orders is what gives Ola the competitive edge with regards to distribution. The resources that they have allow them to indulge in technology that has resulted in faster order collection 5.2 WEAKNESSES Product portfolio The product range is large and uneconomical. There are a great number of products on the range that are very slow movers. Some of the products also have a limited shelf life and often expire on the shelf. Caltex seeks to supply a full range and this has resulted in some of the products in the range being uneconomical. Level of service for the Manufacturing plant The manufacturing plant does not deliver the required level of service to the sales people in the field. Often orders are not met and they have been incidents of contamination of products. These have sometimes lead to loss of accounts when customers are not satisfied with the level of service. Positioning in township spare shops market Caltex has to make adjustments to penetrate this growing market sector. There are a considerable number of spares shops operating in the townships that are moving high volumes for the DIY mechanic and individual. Castrol seems to be dominating this market and has established distribution points at locations near taxi ranks and major shopping centres within the townships. Weaknesses in certain sectors There are lucrative markets like the pulp and paper as well as the crop spray market, which Caltex is currently not involved in. Internationally Caltex has access to this technology and some operating Caltex companies are very strong in these areas, but this advantage is not utilised here in South Africa. Spares shops and service centres Caltex is not well represented in these sectors. The smaller non-franchised service centres use small volumes but since there are many of them, the combined volume is rather substantial. However, there is the added advantage that their negotiating power is weak, and therefore capital equipment investment is low and this culminates in low discounts. 5.3 OPPORTUNITIES Brand and product strength Ola can take advantage of the strength of their brands like Magnum and Cornetto which have established themselves strongly in the ice-cream sector. Growth in cutting oils an opportunity exists in the highly specialised and lucrative field of cutting oils. Caltex have the technology to become a market leader in this field. Communication Caltex should create adverts that are relevant to the local market. Traditionally Ola uses international adverts which they apply to the market, although they are successful to some extent. A local flavour would ensure better success.

 Taxi Recapilatization Project The government intends to change the taxi industry by having fewer but bigger diesel engine minibuses. The plans are at an advanced stage. Larger taxi's means a bigger platform to advertise products, especially among the growing black market. Ola must be proactive and ensure that it is at the forefront when manufacturers are decided. Contact should be established and maintained with companies like Toyota, Iveco and Mercedes Benz. 5.4 THREATS Brain Drain With the current exodus of highly qualified professional, a major threat is the that the people that have been groomed and trained might leave the country or work for competitors, taking along with them valuable skills. Healthier Substitute Goods substitute goods such as yoghurts are a threat to the industry as products such as yoghurts are being offered as a healthy alternative to ice-cream , especially in light of the growing trend of leading healthy lives. companies, this results in volatile prices to the customer. These may lead the consumers to be price sensitive and more prone to switching suppliers. 6. COMPETITOR ANALYSIS In South Africa, Ola has one main competitor. Nestle. Table 1: Competitive analysis of lubricants market in South Africa COMP STRENGTHS WEAKNESSES

SHELL Nestle chocolates are an established brand in S.A. and therefore they can diversify easily to other related goods. Their core business is chocolate, not ice-cream Lack of technological resoures which related directly with ice-cream Strong in marketing planning.

Good with major accounts

Distribution cost advantage due to joint venture with BP.

Strong product technology.

Strong brand awareness Strategic Direction Closer to Caltex in product technology and service. They also compete with Castrol with an effective PCMO brand (Helix). 7. PRODUCT LIFE CYLCE 8. PRODUCT OFFERINGS The primary point of differentiation that Caltex lubricant offers is as follows: Sales people with exceptional selling skills and who come from a technical background. The people are capable of independently performing the entire product support function Superior product design, the products have been designed, not only with technology from Caltex, but also with technology from Chevron and Texaco, which are powerful international companies in their field. 8. KEYS TO SUCESS Rectifying the inefficiencies of the manufacturing plant to ensure an acceptable level of service to the customer. Customers must be able to obtain the right product at the right time in the correct quantities. Building the brand by active advertising that relates to the local environment. Counter the effects of the BP acquisition of Castrol by more aggressive marketing. Tapping into the specialised field of cutting oils Acknowledging that the source for competitive advantage lies within the human capital and implementing measures to retain this capital. Acknowledging that Black empowerment is a reality and that as major players Caltex cannot afford to carry on without a Black empowerment partner. 9 MARKETING STRATEGY After a thorough investigation of the current marketing strategy and also based on the information detailed above, its evident that for Caltex to be able to be successful,...