Essentials of Marketing Management - Case Study Example

BUS 1303 Marketing Nadeem Ahmed Presentation: Current Market Situation Dettol is a brand that originated from India and established in foreign markets including the UAE. It has remained a trusted brand in among consumers globally for 75 years as a hygiene product. Reckitt Benckiser is the company that owns Dettol brand and has operations in 60 countries and direct sales in 180 countries. Since 1933, Dettol was launched as an antiseptic liquid mainly used in the management of injuries. Hospitals were among the main users of Dettol for first aid on cuts as well as a disinfectant for hospital surfaces and clothes. The consumer base continued to increase as people began using it for shower, as an after shave as well as swabbing surfaces in homes to protect children against germs. Brand extension has continued since its inception to the current broad product categories (Payne et al. 20). Brand Dettol brand originated from India where it was launched in 1932 by Reckitt & Sons Company. It was introduced in UAE market in 1995 by Reckitt & Colman Limited, which was formed through the merger between Reckitt & Sons and J&J Colman. The original brand category of antiseptic liquid has maintained leadership with a significant market share of 85%. It is trusted widely as a powerful antiseptic valued for its ability to kill a wide range of bacteria thereby protecting the body against infectious germs. The antiseptic liquid is marketed in a variety of sizes, ranging from 50ml to 500ml. Consumers use it for disinfection of clothes, floors, bathing as well as in first aid for injuries. The success of Dettol brand in terms of revenue has been augmented by its extension in other product lines. Dettol soap was the first brand extension in 1990, which was not successful in the initial launch as it sent a different message of family care rather than the original message of protection that consumers attached significant value to. However, the soap later acquired consumer loyalty after the message in its marketing strategy was changed to that of protection. The Dettol soap currently ranks at position 4 among soap products globally with a market share of 8%. Dettol liquid hand wash is also another brand extension that has gained leadership in the liquid hand wash market with more than 50% market share. Dettol kitchen gel is the latest brand extension in February 2013 and has accomplished 10.2% market share. Other product categories include body wash, after shave cream and Dettol wash proof Medicated Plaster that augments the uses of Dettol antiseptic liquid (Sprenger, 121). Organization that markets the Brand Dettol brand in the United Arab Emirates is marketed by Reckitt Benckiser Arabia (RBA), which is a subsidiary of Reckitt Benckiser plc. RBA was established 2008 in the UAE, based in Dubai where marketing operations to 36 states in the Middle East and Northern Africa are controlled. Apart from Dettol brand which is a market leader in its product category, there are other brands that the company markets, which have also maintained leadership within their product lines. These include laundry brands such as Vanish, surface disinfectants such as Harpic, kitchen detergents such as Calgonit, home pest control such as Mortein as well as the most recent brand Airwick for air care (Garner 186). Strengths The company brands have maintained market leadership in a highly competitive market. Dubai is a regional business hub characterized by significant cultural diversity and the company is strategically positioned to serve the countries in the Middle East. Dettol brand has significantly established consumer loyalty due to its association with protection of health as has been emphasized in the Dettol marketing strategy. The brand has emotional connections to consumers due to the understanding that it guarantees their safety and that of their families against germs. It has largely been accredited in the medical sphere for hygienic purposes especially for nursing mothers who need to use Dettol antiseptic regularly to clean surfaces that children get contact with often. The Dettol brand is characterized by a sword on the pack, green color as well as the clouding appearance when mixed with water. The company uses the sword and clouding as symbols of strength while the green cooperate color represents hospitals. These symbols have been applied ingeniously to promote Dettol products in advertisements. The various products sold under the Dettol brand name have been significant in maintaining strong market presence and hence the positive impact on the overall growth strategy. Dettol antiseptic has a strong market share of 86% that is unmatched by rivals. Reckitt Benckiser is a reputable company that customers associate with novelty (Payne et al. 22). Weaknesses Dettol brand has limited presence in the rural market in spite of it having excellent product categories marketed under it. Most of the Dettol products are priced above average in comparison to competing brands and hence are mainly positioned as high end products thereby giving competitors an entry point in the large unexploited market. The market share has stagnated as a result of rising competition from similar products by competitors as the company’s strategy to curtail imitation remains unchecked (Brandt 106). Market environment Micro Environment Factors RBA maintains a supportive micro-environment that helps the company to satisfy its customers. Marketing management of the company applies an all-inclusive strategy whereby all the relevant departments are involved in important decisions concerning marketing strategies. Components of the company’s internal environment include; accounting, purchases and supplies, research and development and the operations departments. Input suppliers are considered to form the foundation of the consumer value transfer system. The quality of goods and services depends on the inputs provided by suppliers and therefore significant emphasis is focused on quality of raw materials. The marketing intermediaries are crucial in the promotion, vending and distribution of company products. The company maintains a strong network of product distributors and marketing agencies in the UAE and also offers incentives to wholesalers and retailers of its products (Bremmer 131). Customers are also part of the micro-environment and are core to the success of the company. The research and development department is involved in consumer research to establish the changing needs and to develop strategies to satisfy these needs. Competitors on the other hand are part of the micro-environment seeking to outdo the company’s product offerings. They include Savlon and Suthol, which are competing with Dettol antiseptic. The company ensures market leadership through innovation and capitalizing on the strong brand equity. The public is engaged in the company activities through hygiene and healthy living programs such as the Dettol Surakshit Parivar that promotes good hygienic practices among mothers and school children. The company also collaborates with stakeholders such as Global Health Council to promote public hygiene as well as publishing periodicals to sensitize people about hygiene (Sprenger 121). Macro Environment Factors These are factors that influence the micro-environment that are better understood through PESTEL analysis. Politically, UAE and Dubai in particular are politically stable and supportive for investment. This has helped in establishing a strong base for the company in the region. Since its establishment, the company has not experienced undue pressure from government agencies or activist groups. The natural environment is enabling and all the raw materials necessary are available for the company’s production processes. Dettol products are acceptable by all social classes, ages and religious groupings for hygienic and medical purposes. The company therefore markets them without any negative social influence. Technological advancements have enhanced production and marketing strategies as consumers are provided with an opportunity to make orders online and also view the various product categories of Dettol brand with much ease than through the conventional manual promotions (Bremmer 131). Technology has enhanced the company’s supply chain management and more growth is expected in coming years as more consumers get connected to the internet. Economic factors are important in determining the purchasing power of consumers. However, the antiseptic value of Dettol products helps to maintain stability in consumer purchasing patterns as opposed to the influence of income patterns. Nevertheless, Dettol products are considered to be expensive among the poor rural communities. A relatively low inflation rate has been maintained in UAE and therefore the prices of Dettol products have remained stable. The company adheres to the legal requirements in UAE while maintaining environmental integrity in its operations. This has been important in the avoidance of expensive legal suits (Garner 186). Market Description Dettol has significant growth potential in the UAE and is progressively being promoted as an essential home care product because of hygienic value. Considerable school programs are being conducted as a strategy to reach as many homes as possible. The Dettol market in UAE continued to expand since 2012 when the economic crises began to lessen leading to more jobs being created while consumer confidence in home care products increased. Expatriate workers continue to enter the UAE labor force as more jobs are created thereby increasing the local market size in which Dettol commands 86% market share in its brand category. The current growth of the market is 2.8% and is expected to achieve 3.5% growth by 2015. Consumers mainly buy Dettol products from various hypermarkets in UAE, which are also used by the company to promote new product launch. The fundamental needs of consumers in buying Dettol products are personal and home hygienic purposes. The wide variety of uses makes Dettol a common household brand and this will continue as long as the economy remains stable thereby maintaining consumer purchasing power. Consumer needs will increase as people continuously become aware of the significance of hygiene to their health (Garner 186). Market segments Market segmentation is one of the key drivers to successful marketing of Dettol brand. Psychographic segment is based on the lifestyles of consumers whereby some are focused on hygiene especially for outdoor activities where consumers are likely to come in to contact with germs and also get bruises on their body. This segment also includes home surface disinfection. Dettol market is also segmented in terms of personality whereby it is considered to be an essential item among the adventurous group such as mountain climbers who may get injuries and use Dettol antiseptic. Behavioral segmentation is focused on consumers who highly rely on Dettol as the strongest disinfectant. This segment also comprises people who are very keen on disinfection in whatever activity they are involved in. Segmentation is also based on the rate of Dettol usage. Different quantities are packaged to serve a wide range of consumers, from 50ml to 500ml. Behavioral segmentation may change depending on consumer attitudes towards the effectiveness of Dettol products and therefore there is need to ensure that promotions focus on maintaining the current market segments and establishing more potential segments such as occasional purchase segment that is based on particular functions such as mother’s day and world hand washing day among others (Sprenger, 121). Marketing Opportunities Market Penetration Strategy The company can enhance growth of the Dettol brand through increased promotions to motivate the existing consumers to buy more of Dettol products. These promotions can also be targeted at consumers of competitor product such as Savlon to begin using Dettol and also to encourage consumers in the rural market where its presence is minimal (Ferrell & Hartline, 2011). Market-Development Strategy New products can be aimed at the emerging market of occasional users such as during celebrations. Distribution channels in cities as well as rural areas can help to develop the market for Dettol products. This involves recognizing prospective users and organizing promotions targeting them. Product-Development Strategy The company can enhance its market through developing new features such as colour and packaging design to avoid imitation of the long-lived features. Different quality levels can be developed to serve diverse consumer purchasing power to ensure that the entire market is served. Technological improvements in product development can help to improve quality, design and consumer satisfaction thereby attracting a greater market with the same products (Lancaster & Massingham 2011). Diversification Concentric diversification is an important approach that can be applied to develop different products with the existing technology for the new market segments, while the company can also undertake conglomerate diversification whereby new products are developed for emerging market segments. Horizontal diversification needs to be applied to retain customers by developing new products through innovative technology for the existing market segments (Ferrell & Hartline, 2011). This is a strategy whereby the company targets existing market segments by offering new product lines hence helping it to keep away competitors from bringing innovative products that may attract current customers of company products. References Brandt, P. L. Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading, Wiley; 1 edition, 2011. Bremmer, I. The End of the Free Market: Who Wins the War Between States and Corporations?, Portfolio Trade, 2011 Ferrell, O. C., & Hartline, M. D. (2011). Marketing Strategy (5th ed.). Mason: South-Western Cengage Learning Garner, C. A Traders First Book on Commodities: An Introduction to the Worlds Fastest Growing Market (2nd Edition), FT Press, 2012. Lancaster, G., & Massingham, L. (2011). Essentials of Marketing Management. London and New York: Routledge Payne, D. Gibson, W. & Lewis, R. Antiseptics: A forgotten weapon in the control of antibiotic resistant bacteria in hospital and community settings. Journal of the Royal Society of Health, 1998: 18, 18−22. Sprenger, R. Hygiene for Management. Highfield Publications, 2012 Appendix 1: Survey Questionnaire 1. (a) Have you ever used any Dettol product? Yes No (b) If yes in (a) above, name the product(s)……………………………………………………. (c) If no in (a) above please tick the most probable reason Expensive I have other alternatives Not available in the shops I do not know them 2. (a) Would you recommend any changes in the current products Yes No (b) If yes in (a) above, state the changes……………………………………………………...... 3. Which hygienic needs do you think will require more attention in future……………………... 4. How do you use Dettol Products? ……………………………………………………………… 5. How do you think you will use Dettol products in future?........................................................... 6. What do you like most in Dettol Products?.................................................................................. 7. How often do you buy Dettol Products?....................................................................................... Read More