About Milkvita: “Bangladesh Milk Producers” Co-operative Union Ltd. This is known as by brand name MilkVita it was established by Bangladesh Government in 1973 after the liberation war based on the recommendation by FAO/UNDP. As a development project of the Government titled "Co-operative Dairy Complex" with the objective of ensuring fair price for the poor, landless and marginal milk producing farmers of the rural Bangladesh. Figure 1 Milk Vita 1 Task 1 (L.O- 1.1): Explain various elements of marketing process. The Marketing: It is the process or activity to communicate with actual or potential buyers of goods or services. The Marketing Process some steps like: create customer value, build strong customers relationship; companies must work to understand consumers and customer value. The market of milk vita: They used to supply Dhaka 2 to 2.5 lakhs liters of liquid milk per day but it was only early 3000-4000 liters was establishment of this project. As a get to know that they hoped in future the organization will able to market its capacity quantity of 4 lakhs liters per day. The Milk Union so far marketed 5.50 crores liters of liquid milk which worth TK.250 crores along with substantial quantities of milk products which worth TK.70 crores both together TK.350 crores. They marketed in major cities like rickshaw van co-operatives societies in additional to the retail agencies and wholesaling distributors. Dhaka, Chittagong, Comilla, Feni, Rangpur, Brahman-Baria, Sreemangal, Moulivi Bazar and diversification of products range as their demand per market. Target for Milk Vita does not need to segment or target the market of liquid milk it is because they are accept by all segment but for their other products they have set some target markets. Dhaka is their target market. They provide some services in the following line:       Free medication/treatment for cattle Free vaccination for cattle Training for animal development and husbandry/management Provides balance cattle feed supply at non profit or loss basis. Artificial insemination At farmer level the milk price is higher Distribution involves getting the right products to the right customers in the right place at the right time. Milk vita has taken proper way to distribute milk and milk products to the market. They are free to develop strong channel legally which suits them. Some distributor and wholesaler like: Exclusive Distributors, Exclusive Retails, Exclusive Territorial Managements, etc. Promotion is the direct marketing tools to communicate customer value and build customer relationships. This is an expense which is increasing than advertising in most of the companies. Both advertise and promotion getting importance by Milk vita. Others are radio, billboards, television, newspaper, etc. Milk vita’s sale and return on investment is very fast and that is why profit is on target. It is about 95% of liquid milk consumed in Bangladesh and received from middleman and farmers sources. The dairy plants supply only 0.5%. 2 Task 2 (L.O- 1.2): Evaluate the benefits and costs of a marketing orientation for a selected organization. Beneficiaries: Bangladesh milk producer’s co-operative union limited (BMPCUL). They help the rural socio-economy. They spread over to 12 milk-shed areas which covering about 20 districts with 48 polices stations and 1005 villages. In the milk production sector they are benefiting the farmers. And the direct beneficiaries are 80,000 landless, needy people and marginal milk producing farmers. 4, 00,000 farmers families member are directly associate with organization. More than 500 rickshaw pullers are associated with daily cash income for take care of livelihood. Pricing: Milk vita uses some pricing strategy like others similar companies. They priced their products such a way that the customer can afford it. If prices go high then they may be set to recover investment in new products. Low price sometimes used to gain market position. For example: in Ramadan their prices goes higher due to crisis. Being market leader they play with pricing to gain an abnormal profit. Opinion: They must survey their target market area regularly for getting more business scope. They should select strategy on sales executive, broker or middlemen etc. Every year milkvita show their income statement with loss it is because of their autocratic leadership. They should change their places of collecting raw materials which will reduce their production cost which may help to them to get more customers in this market. They can establish individual firms then it can help them to provide reasonable prices and good quality products. Distribution site can be awarded the person who have very good knowledge in their fields and should be planned in organize way should be in strict co-ordinate framework. They should use advertising strategy in media. 3 Task 3 (L.O- 2.1): Show macro and micro environmental factors which influence marketing decisions. Micro environment: It deals with a customer that affects its abilities of save like the company, suppliers, publics, competitors, customer market and market intermediaries. Micro-credit facilities: The organization started experimentation in micro-credit. Loan is sanctioned on easy terms to poor farmers for purchasing of cattle. Since 1994, milkvita has provided loans amounting to about 15.00 million taka. Public: It’s related with such as press conference, media, magazines etc for example: publishing annual reports and company group profit of BMPCUL or sponsorship of event by them. Macro environment: The large societal force which affects the microenvironment like demographic, geographic, political, cultural, natural, economical and technological. Natural in Bangladesh 90% are still performed with draft power in agro-activities from cattle’s. The process of harvesting, carrying, oil producing, etc is done by cattle’s. So as a result of statistical survey interpret that about 0.86 million buffaloes, 23.72 million cows, 1.24 millions lambs, and 24.19 million goats in Bangladesh. The livestock holding by house hold vary between 2.32-6.47 for cattle and 2.49-4.72 for goats. It shows that wide spread and low density of livestock proportion which causes problem against in adopting harmful diseases. Livestock is secondary types of activities for deriving economies benefits the nation in not paying much attention for improvement for livestock. 80% of the milk production of the country get from the cows and 20 % from buffaloes and goats of that 1.86 million metric tons. Economical is one of the important roles of market. It requires buying power as well as people. It has some factors that affect consumer purchasing power and spending power patterns. Milk vita must not forget about the major trends and consumer spending pattern. New technologies making new products and making market opportunities. It also changes rapidly and new technologies replace old technologies. If companies do not try to changes their old tech may be they soon find their products outdated and they will miss market opportunities. For examples- recently new machinery like milk homogeniser, dairy processing machinery etc. Political consists of law, government and pressure groups. This environment strongly affects marketing decision. For example –Milk vita had losses of 88.80 million taka in December 2013 alone compare to same month of 2012 because of country’s political situation. 4 Task 4 (L.O- 2.2, 2.3 and 2.5): Propose segmentation criteria to be used for products in different markets. Choose a targeting strategy for a selected product or service. Propose new positioning for a selected product/service. In the assignment we use one product (Milkvita Milk) for segmentation proposal based on business market and consumer market for segmentation criteria. Segmentation Criteria for Consumer market: Consumer market is market where we can divide buyers by their criteria. Buyer’s criteria play a vital role for the segmentation of consumer market which is called consumer buyer and business buyer. We explained consumer market segmentation by their criteria below: 1. Geographic Segmentation: Geographic segmentation is an important process- particularly for multi-national, global businesses and brands. Many companies have regional and national marketing programs which offering their products, advertising and promotion to meet the individual needs of geographic units. Proposal: Rangpur now became city is a commercial area. BMPCUL chose Milkvita Milk to launch in this area. It sold huge quantity rather than the other cities inside the country. So it can earn a good profit throughout the whole area for the organization. 2. Demographic Segmentation: Demographic segmentation includes age, gender, family, lifecycle, generations, income, occupation and education. Demographic factors are the most popular based on segmenting customer groups. Proposal: Milkvita Milk is being used specially the age of 4-9…….60+ years people. Usually in home it is being used spastically as well as in restaurant, small tea stall and bakeries is using this milk for the business purpose making different products especially sweet items. On the other hand male and female also drink milk in different taste. Segmentation Criteria for Business Market: Business Marketing is the practice of individuals, including commercial businesses, governments and institutions, which facilitating in the sale of their products/services to other firms or organizations which in turn resell to use them as components in products or services which they are offer or to use them for support their operations. Business marketing is also 5 called business-to-business marketing which is quite similar with one to one business. Business market segmentation is more useful, and it plays a vital role in marketing. 1. Psychographic segmentation: Psychographic segmentation means dividing a market into different group based on social (upper class, middle class, and lower class). Proposal: BMPCUL FMCG product (Milkvita Milk) choosing their segmentation based on commercial as well as local business zone likes shopping mall. For example- Shapno super shop mall, Agora, Meena Bazar, DCA, small retailer shop, general store etc are the business market point. Because of social class people buy their daily condiment mentioning shopping mall. (R-1) 2. Benefit segmentation: It is the segmentation that dividing the Milkvita’s market into groups according to the different benefits that consumers achieve from the product. Proposal: Benefit segmentation is more polite able for BMPCUL organization. For example, small businesses like general store, sweet manufacturer, retailer, tea stall, mobile hotel uses (Milkvita Milk) in a large/small quantity as daily basis so it will be more profit able on business marketing. Requirement’s for effective segmentation for selected product:  Measurable: The size, purchasing power, and profile of the segment’s can be measured. Certain segmentation variables are difficult to measure. In our country about eighteen core people of different classes, human being are using milk especially for child as well as for everyone to keep them fit.  Accessible: BMPCUL effectively reaches and served for their market segments. For examplethe company publishes many signboards, banner in the rural area with massage like “drink milkvita and keep yourself healthy”.  Substantial: There is no substantial to divide Milkvita milk.  Differentiable: The segments are conceptually distinguishable and respond differently for different marketing mix elements and programs. For example- all class people respond our product and huge demand for both male and female especially for child, age like 5+. 6  Actionable: By designing the effective programs it can be attracted and served the segments. For example- BMPCUL is a Government organization company who has huge amount of financial recourse, advance technology so it develop separate marketing programs for each segment which is totally maintain by the government sector. Basically targeting strategy is driven by the customer. We have already selected the product (Milkvita). Targeting Strategy: Companies & marketing professionals use a variety of marketing strategies to effectively convey a message or promote a product or brand. But our target buyers are family users as well as commercial consumer and whole country. There are four target strategies- differentiated, undifferentiated, concentrated and micro marketing. All of these target strategies are important for every business. But out target strategy is undifferentiated marketing. Undifferentiated marketing means ignore market segmentation differences and target whole market. That means by selecting a product targeting whole market. It is also called mass marketing as well. For example- salt. As like our selected product Milkvita Milk is used by all class people as drinking milk. As well as all of consumer and business buyer buy this product. By using this strategy BMPCUL can get maximum consumer and get more profit. Figure 2. Targeting Strategy Formula 7 By this above picture we are going to understand that first analysis target strategies than we chose target marketing from differentiated, undifferentiated, concentrated and micro marketing. Finally we implemented undifferentiated marketing. Then we have to explain the factors of the company. These are –  Company Resources  Product Life Cycle Stage  Competitors Market Strategies Company Resources: This resource can be usefully grouped under several categories. These are explaining below:  Financial Resources: Financial resources which concern about the ability of the business for finance of its chosen strategy. Finance resources would be included the following Factors: Finance Found Govt. Equity =41.5 Core. Govt. loan =44.63 core (Principal) Revolving Fund =5 core Corporation Fund =19.10 core Total =110.23 core  Human Resources: Human resources are the skill based of the business. Human resources include following factors: Staffing Resources More than 1000 skilled & unskilled staff More than 500 employees are specialist. 50 trainer 6 months training period Cultural Resources Corporate image Retail coverage Heritage Change to required to resources Overtime facilities Increment facilities 50% bonus of basic salary during religious festival.  Physical Resources: Physical resources that cover lots of operational resources which concerned with the physical capability to the deliver a strategy. These include: 8 Production facilities Production location is in Dhaka but it will be considered all of the country in future Production is held Chain of command Distributed by department Distributed by distribution channel Marketing Information Technology Advertise by website Take deliver by TV advertisement Product Life Cycle Stage: The stage through which individual product develops over time is called product life cycle stage. Figure 3 Product life cycle Stage “Bangladesh Milk Producers” Co-operative Union Ltd. This is known as by brand name MilkVita it was established by Bangladesh Government in 1973 after the liberation war based on the recommendation by FAO/UNDP. As a development project of the Government titled "Cooperative Dairy Complex" with the objective of ensuring fair price for the poor, landless and marginal milk producing farmers of the rural Bangladesh and on the other hand to provide the city dwellers with a regular supply of fresh and hygienic milk and milk products at a reasonable price. So we need development & research but we don’t want to decline it. 9 Competitors Market Strategies: The competitor of Milkvita Milk are Pran and Aarong. It has already taken maximum customer. The strategies are used by Milkvita Milk are:    Target costumer are civil people and business buyer Synchronous marketing Formula of Denmark In our assignment we have selected Milkvita Milk of BMPCUL. Before We positioning our product we would like to show some similar products information’s of another company. These are: SI. NO Name of the Enterprise Milk Sales Liters/Day (Average) % of Market Share 1. Milk Vita 1,20,000 69.16 2. Arong 35,000 14.00 3. Pran 39,850 16.63 4. Others 8,150 0.21 Total 2,03,000 100% List of milk 1. Milkvita milk 2. Aarong milk 3. Pran milk 4. Savar milk. Name Price Uses percentage 1. Milkvita 62 40% 2. Aarong 60 22% 3. Pran 61 24% 4. Savar 55 14% Positioning Map: Product positioning is related closely to the market segment. Product positioning involves in creating a consistent, unique and recognized customer perception. It is about a firm’s offering and image. A product/service may be positioned on the basis of a benefit or an attitude, use or 10 an application, a user, a class, a price or a level of qualities. It has targeted a product for specific market segmented and product needed at specific prices. In many different ways the same product can be positioned. 60 Milk Vita Price 50 Aarong 40 30 Pran 20 Savar 10 Quality Performance In this map the position of the product on two dimensions. One is price and other is performance- quality. This chart indicates the product relative market position and segmentation. Thus today’s other liquid milks are good but our product is best product in market because our product is pasteurized sweetened filled milk is scientifically recombined in the latest sophisticated plant under ideal hygienic conditions using super quality cow milk and non fat milk solids.(GUARANTEE) Choosing the Right Competitive Advantage A company is fortunate enough to discover several potential differentiations that provide competitive advantage. There are many competitive advantages. Thos are: 1. Important. 2. Distinctive. 3. Superior. 4. Communicable. 5. Preemptive. 6. Affordable. 7. Profitable. 11 From the above advantages we have selected Important, Affordable. 1. Important: Our product is different to other product that delivers a highly valued benefit for target buyers. 2. Affordable: Our product is affordable than other product so buyers can afford to pay the difference. Identify possible value My product is best product than other product. Because our product make sure to the consumer about quality, guarantee and our product is affordable than other as well as superior. So our customer can buy affordably. Develop a new positioning proposal Product development strategy Product development strategy means developing new products or modifying existing products so appear new and offering those products to current or new markets. For Milkvita Liquid milk we are going to develop new position by following product development strategy. These are:  Idea generation: By generating idea we founded some failure of starship condensed milk business. This are:       Less marketing Less advertising Lack of development and research Less investment for packaging No quality development from maturity level Better quality and advancement of competitor’s product For this above failure Milkvita lost maximum consumer and competitors will be captured those consumer. We have to solve this failure and develop our product by generating new ideas. We have found three ideas. These are: I. II. III. Make sugar and low fat milk Vitamin contains milk for children Product modification by different taste (Like: Mango flavor, chocolate flavor). 12 We will apply one idea in Idea scanning strategy.  Idea scanning: By analyzing those three ideas we will apply one idea that is Make sugar free and low fat milk (For diabetes patient). By developing and modifying this product diabetes patients also can use this product.  Concept development and testing: By niche marketing we will test this product by using diabetes patient in Rangpur zone.  Marketing strategy: Though our target buyers are regular buyers as well as children. So we have to follow some marketing strategies. These are:     Appoint more representatives for marketing the product just like one to one way. Campaign for our product in all districts. Maximum budget for marketing. Using marketing strategy.  Business analysis and product development: In this sector we analysis and develop our product depending on amount of sales production cost and profit margin. If that will profitable and positive for our company, will we develop this product and take Test Marketing step.  Commercialization: Commercialization is the introduction of product into the marketplace. By this system the product will be launched in competitor market. After applied above strategies we can produce proposal product at any time. At first we will sale this product in Rangpur as our commercial zone. Then we will consider all over the cities and will also export our product in other countries. 13 Task- (LO 2.4): Demonstrate how buyer behavior affects marketing activities in different buying situations. The study of consumers helps firms and organizations improve their marketing strategies by understanding issues. There are different king of buying situations which can affects the marketing activities. Such as Consumer Buyer: The consumer buyer behavior is very difficult to understand, what is going in their mind. On behalf of that the marketer has to introduce the product on the market. It is basically all about the CULTURAL, SOCIAL, PERSONAL AND PSYCHOLOGICAL matter of the potential or actual customer. Business Buyer: Business buyers purchase goods and services for further production, for use in operations or for resale to other consumers. In contrast to individual and households will buy for their own use and consumption. Figure 4. Consumer and buyer market 14 The Factors That Affecting The Consumer Buyer Cultural: Culture: Culture is the most fundamental determinant of a person’s wants and behavior. It is the set of beliefs, attitudes and behavior patterns relatively stable over time. For example: Milkvita is ore concern about the culture as they proving good quality cow milk for specially for children and women. Sub culture: It share common geographic, ethnic, racial or religious backgrounds. They continue to hold some values, attitudes and behaviour pattern that are uniquely their own. In consider the nationalities, religions, racial groups, and geographical regions. Many sub-cultures make up important market segments and marketers often design marketing programs tailored to their needs. For example: In our country there are different kinds of religious citizen living such as Muslim, Hindu, Christian, Buddhist etc. Social Class: Social class based on similarities incomes, education and occupation who shows the all most same value as well as interest in the society. Social Factors: Reference Group: It is called the membership group where the every single person having direct interest and influence to achieve a common goal. It is basically affect the consumer behavior throughout the normative appreciation. For example: Milkvita has got the highest market share in the milk industry so we can say that it is socially appreciated by the reference group. Family: Family is called the primary reference group because this is the most important consumer in the market or society. Role and status: A role and status can be define as he/she has some kind of involvement and dignity in any group such as family, club, organization etc by the position. Different kind of role contains different kind of status. 15 Personal Factors: Personal such a important sector which is varies man to man. The characteristics of human being is classified as a age and life-cycle stage, economic situation, occupation, lifestyle and personality and self-concept. Age and life-cycle stage: Man is mortal so in the mine time the people relatively buy goods or get services in different level taste. This all about the changes of age and life cycle stages. For example: When we was baby we used to have feeder but in the aged time we use glasses to have milk. Occupation: The consumption rate is totally depended on occupation of the consumer actually. In the world there is various kind of person who is doing their work and not shows almost same interest on same product. But milk is kind of undifferentiated product once upon a time we have to take it as continues or important food. Economic Situation: Economical situation influence the marketers to reprise and modify the product price on the market. Such as in 1999 the price of milkvita milk was only BDT=21/- taka. But now a days it quite impossible to have the milk on the same rate due to the economical changes in the country. Lifestyle: Lifestyle grabs something more than the person’s social class and personality which shows the pattern, activity, opinion and interest of themselves. Personal and Self-concept: This is the most unique and strong psychological characteristic which is motivated influence person to do something relatively. It is basically considered as consumer attitude for specified product or service. Psychological Factors: Motivation: Motivation means drive. It drives the customer to do the work throughout the advisement by any celebrities. For example: Tamim Iqbal has done advertisement for DANO company to grab market by motivating young child that having dano milk you can hit six(6) like Tamim Iqbal. Perception: This is a procedure by which customer select, organize and interprets information to form a momentous of the world. 16 Learning: Learning is a continues process whereby the person get knowledge from his/her experience. The Factors That Affecting The Business Buyer Environmental Factors: An environmental factor is highly impacted by the economical environmental situation which is related with primary demand, economic outlook and cost of money. It is been affected by the technological, political and competitive development of environment. Most of the things are controlling by the culture and custom of the country where the business is running. Organizational Factors: To achieve the organizational objective, the company must know how many customer are involved in the buying decision and why, companies limitations and straights as well. Interpersonal Factors: The interpersonal factors totally manipulate by the buying process where different type of participants influence each other. The factors are very delicate to understand. Milkvita also create a different market strategy to overcome the delicate to sustain in the market place by applying expertise skills. 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