External Marketing Audit of Sara Lee Corporation - Statistics Project Example

Marketing Audit Terms of References & Executive Summary The global organization that is going to be discussed is a very established one, Sara lee corporation is having headquarters in Chicago and it is having operations in 58 countries and nearly around 200 nations with having 150,400 employees all around the world, the company is having groups such as food and beverages, body care, house hold products and branded apparel. In food and beverages, Sara lee has a strong hold in the market, it provides packaged meat, coffee, tea and also baked goods, they are having strong market position at various points in Europe and specially U.K. In frozen food, the company is at the top in U.S with fair market positions in Europe and Brazil, while it is one of the largest producers of tea and coffee. In the body care section the company holds the top position in the European bath and shower market, in households side they are having one of the world famous shoe polishes named Kiwi. The company is trying to settle the market of branded apparel, which includes men’s and boy’s wear, also sports wear. The thing that should be kept in mind at this stage is that the Sara Lee is making most of those products in which brand switching is common, and there are relatively very few differences between the competitor’s products and the company’s products, for example the shoe polish Kiwi is having competition with Cherry Blossom, if a consumer would go to buy Kiwi and would not find it in a shop, he would buy cherry blossom rather than going to an other shop and look for Kiwi, the company is thus having every one as there target audience, but it also depends on the different products they are selling, such as in foods and beverages the real market segment is those individuals who are having no family and are working and living alone, it is a big segment in the U.K and fair in U.S, in the body care section the target audience is originally women but keeping in view the prevailing demands they have also started catering men in the society, in the house hold products, the main product is shoe polish, KIWI and they were initially catering men but due to increased usage of leather shoes by women they are also targeting them, specially after the introduction of sponges, another product the company is offering is the Ambi Pur air fresheners and body sprays which they are catering men and women both, also Sanex is a product used as body care product, they are again having women as their target audience, In the apparel section their target audience is again women of the society as they require more of comfort than men, but they have also introduced the sports wear which both men and women use. So the entire target audience consists of people who are young and energetic in life. Business Mission Of course every company’s mission is the profitability while providing something that sounds good to the customer, the company’s mission for customer is the product innovation and also the new product development, as their slogan suggests, “Our mission is to simply delight you…every day” External Marketing Audit Political Factors The political factors affecting the company are only related to the company not the customers, trade policies are now made by WTO, it is clearly specifying that the government makes such policies without knowing that it could also be questioning the country’s own economy, Sara Lee has somewhat been affected by such policies in the past, however due to modernization, the company has made fairly lucrative business in different areas of U.S. and Europe with much business in U.K, big disturbances in the sales were also seen at the 9/11 event, at that point it was disturbance in every part of every country which also include the areas where Sara Lee has operations, the supply to U.K was also decreased and thus the competitors Yardley had fair chance to capture the full market, however the big amount of share holders have also influenced company at few occasions, but not severely. Economic Factors Sara Lee is following the Capitalist Economy, it means that Sara Lee’s operations are not confined by the government of U.S. by owning its assets, the company is having its own assets, so that there is less fuss and confusion in trading with near by Latin countries, while the inflation rate and changing trade policies have affected the company in many ways, specially the exports have been affected after 9/11 when the products were having shortage around the globe due to serious confusion created in U.S, the supply to U.K was affected in those days the most. Social Factors The Company’s is also being affected by social factors but they are happy to follow few rules that are making the company a good one in the eyes of consumers, a good example is that when the Muslim community’s demand increased for precautionary meat around the world the company had to think in bringing something new which could pacify the Muslim customers and the company finally started coming up with the precautionary meat and they had some how managed to communicate the new concept to every one which is another good point in the favor of the company, there are specific muslim community in U.K which was considered special by the Sara Lee U.K, while the increasing population is also affecting the company’s forecasts and sales quotas, these are the challenges which company is willing to take happily. Technological Factors Every one of us know the role of technology which is increasing so quick and new products are being launched almost every day by the company with having innovation in most of them, the technology the company is using also needs to be updated on monthly bases, the company is therefore facing a big technological challenge as they sell all the products that are being manufactured on a chain machine, the R& D of Sara Lee works so effectively to identify the prevailing needs in the market and than tries to give accurate feed back to the company so that more developments can take place. Internal Marketing Audit Foods and Beverages “Sara Lee serves retail and foodservice markets for packaged meats, baked goods, coffee and tea. Sara Lee is a leader in the branded packaged meat business in the United States and Mexico, with important positions in Europe.  The company is a leader in the U.S. fresh baked goods market, and holds important positions in the U.S. and French refrigerated dough and Spanish fresh breads markets. Sara Lee also enjoys leading positions in frozen baked goods in both the United States and Australia, and is one of the largest producers of roast and ground coffee in the world.  Its primary markets are Europe [U.K.], the United States and Brazil”(Sara Lee). Product, Price, Place, Promotion. In the product section, the company is having a long list of food, the key brands are, Aoste, Ball Park, Bimbo, Bryan, Earth grains, Iron kids, Jimmy dean. In the beverage section the main products are pick wick, Senseo, superior coffee. The pricing is done on the basis of cost per unit with some profitability on it because the products are not luxuries in any ways, they are just to suit the customer’s taste which are people who are unable to prepare food them selves, the pricing ranges from pound 0.5 to 7. The products are available at nearly all the stores in the U.K. and else in the entire world, and most importantly they have a B2C relationship, which means that they are threat for the restaurants of the city and thus they focus only on customers. Numerous Sara Lee in order to has made efforts do promotional efforts, advertisement is a common thing, and importantly whenever new product is launched a special team visits the markets and than the product gets familiarity from the customer. House Hold & Body Care “Sara Lee Corporation markets branded household and body care products in nearly 200 countries, focusing primarily on four categories: body care, air care, shoe care and insecticides. Sara Lee is the number-one company in the European Bath and Shower market with Badedas, Duschdas, Monsavon, Radox and Sanex; a leading international producer of air fresheners with Ambi Pur, the world’s number-one shoe care marketer with Kiwi, and a leading marketer of branded insecticides in Europe and Asia with Catch, Goodknight, Ridsect and Vapona”(Sara Lee), they sell body care products through Douwe Egberts, a manufacturer and marketer. Product, Price, Place, Promotion. In the product section the products that are used are nearly around 20 but the key product being used are Kiwi, Ambi Pur and Sanex. The prices are again set on the basis of unit cost system with some profitability on it, the company is doing so because of competition and people are getting price conscious as well, the prices generally range from pound 0.25 to 4. The products are available at all the stores of U.K. in fact these product are easily available in other countries as well unlike food which is somewhat perishable nature. The company has taken every possible measure to promote the newly introduced items such as Brylcreem, Bama, and goodknigth. Though the old products are almost at maturity stage and they do not want to be advertised as usual as others. Branded Apparel “Sara Lee Corporation markets a portfolio of basic, non-fashion apparel brands in the intimates, underwear, legwear and sportswear categories. Well-known intimates brands include Bali, barely there, Playtex and Wonderbra. In the undergarments business, Sara Lee has leading brands such as Hanes and Just My Size. And you probably know our American hosiery brands L'eggs and Hanes. Champion and Outer Banks are two of our sportswear brands”(Sara Lee). These products have gained a lot of popularity in U.K. market. Product, Price, Place, Promotion. There are about 30 products being sold under this category, but the most important ones are Bali, Barely There, Champion, Hanes, Just my size, Playtex, wonder bra. The pricing is set on value-based principle, which means keeping in view the products value, and also because of the fact that the brand has been set in the market and here is relatively lesser competition, the pricing ranges from pound 5 to 20. The places are mostly all the clothing stores, while few of the products are available at the different stores in U.K. and also the company is now planning to have its own outlet in the market where only the company’s products would be place. The promotion is done in few products not all, such as Haynes, where a lot of positioning and promotion is done through advertisement. “At Sara Lee Corporation our business is brands. Leading brands. Trusted brands. Great brands, like Hillshire Farm and Jimmy Dean, Earth Grains, Douwe Egberts, Hanes, Playtex, Ambi Pur, Kiwi and, of course, Sara Lee. These and many other well-known names represent quality and value for millions of consumers around the globe who use our products every day. Across all our product lines - Food and Beverage, Branded Apparel and Household Products - we focus on market-leading, repeat-purchase, branded consumer packaged goods”(Sara Lee). SWOT Analysis Strengths The company is having operations in 58 countries, 200 nations, and has 150,400 employees. One of the few companies that are so diversified and versatile in identifying the needs and wants of society. They are among top in international ratings. Weaknesses They are having limited working capital and also influenced by trade organizations. They are having extremely complex network with a lot of fuss. Most of their products are vulnerable to the climatic conditions. Opportunities A lot of segments in the society are un-served and sales promotion and increased advertisement can create need in people. Has more potential of improving the products according to the growing competition and can also launch more new products. Threats Local companies, especially small firms, putting damage on numerous areas. Restrictions in the form of trade and quotas. The new business ventures of big groups. Marketing Objectives Recommendations (KIWI) Segmentation Kiwi should base its segmentation on a demographic basis focusing on age, gender and social class. In gender Kiwi can focus more on females by catering to their needs because the Gen-Xer’s now comprise of a high number of workingwomen. More females are reverting to the ease of wearing leather shoes in workplaces and Kiwi can cater specifically to them by advertising for them, showing females in workplace using KIWI. Conducting their marketing towards this sector can increase their market share. Another important aspect is age. Kiwi can cater to kids by segmenting them as separate market because school going kids need to polish their shoes and Kiwi should advertise so that cleanliness and hygiene should be portrayed to kids. Kiwi can also cater to the older generation (people above 50) by portraying to them a feeling of youth and energy. Kiwi also needs to segment the same classes furthermore by the personality of the users as the females and male must be hygiene conscious, authoritative and ambitious. Their lifestyle is not carefree rather is more professional and straight. Targeting Kiwi has to choose a number of segments. In our opinion the selective specialization is the best method as it has to cater to a number of segment but it also must start catering to the females in organizations and workplaces. These females are very necessary to target, as they are the future mothers and housewives as well as corporate leaders and they will be the influencing factor on their subordinates as well as their kids and husbands. The targeting of kids is necessary as they are the next generation, so a deep impact on their minds now can cultivate future buyers. Positioning In order to be the market leader KIWI has options to enhance it positioning strategies. Features: In this scenario Kiwi can improve by importing its materials and thus improving as well as enhancing their polish. They can also innovate their packaging thus differentiating it from others even more. (A new style of shiner or new shape of the bottle etc.) Service: Here Kiwi can open up small shoeshine outlets as it is done in other countries to improve not only their services but also their image. These outlets can charge a small fee and if strategically located can become a tremendous hit as people going to offices or going on a date or even going to school can get their shoes polished quickly. Image: In this department Kiwi can assert itself as the oldest brand of shoe polish available in U.S. and the most innovative. This can create an image of durability as well as reliability in the minds of the consumers. Sale promotions (original case) KIWI has a contract with very few of the public schools in U.K. in which a whole team of shoe shiners gives away free shoeshines in the schools. A sales representative also accompanies these teams to give small presentations and create presentations. This helps boost sales as the next time the child goes shopping with his mother, he will relate to the fact that Kiwi visited his school for a free shoe-polishing spree, and thus affect the final buying decision. They also have free give-always like stationery sets and small toys. They also give away free products to distributors when they purchase in bulk. They also give cash discounts to buyers who pay cash immediately and usually give 1.5%. The company develops schemes where retailers can win prizes like refrigerators, microwave ovens, and even cars if they sell a specific target of products. This strategy gives retailers incentives to push the Kiwi Product in the market. A sales staff regularly visits different supermarkets and checks on the shelf space given to Kiwi products with respect to competitor products. Door to door selling by the 200 sales force. Television advertising: They do not undertake any massive television advertising except for a few advertisements, which hardly make an impact on consumers. Printed advertisements: Ten percent of the promotion budget is spent on print media, which includes both newspapers and magazines. All types of local newspapers are used for various advertisements, depending on the purpose of the advertisement campaign. Different types of magazines are used for advertising. Recommendation: Focal point is that KIWI needs to concern itself with its undertaking a major advertising campaign. They should stop focusing mainly on sales promotions and start focusing more on creating a higher value for their product. They can create more value by emotional appeal in their advertising such as showing the people that they are the first brand of polish in U.K. or rational appeal that there brand is the most long-lasting and of a higher quality. When undertaking the campaign they should make sure they follow the principles of effective communication channels also. That is they should have a target audience in mind; they should know their communication objectives; they should design the message to portray a reminder; select a proper communication channel preferably TV and they should establish the budget. Another important point they can use is the fact that they should stop using percentage of sales method as their promotion budget estimate and start using OBJECTIVE and TASK method if they wish to become the market leaders once again. Budgeting: Kiwi uses percentage-of-sales method to determine the promotional budget. The finance department depending on the estimated sales figure pertaining to that year primarily decides the advertising budget. The promotion budget for the up-coming year is set in advance at the end of the current year. The budget is linked to a sales volume target. “Sales volume is monitored primarily on a weekly basis to evaluate the result of promotional activities on sales volume.” As communication is one of the main aspects of generating consumer interest as well as response it is very important for a company to have an integrated communication mix where there advertising, sales promotions and direct marketing must convey the same message, this is where KIWI falters. It does not have a proper advertising campaign and relies more heavily on sales promotions and according to their Marketing manager its public relations activities are almost non-existent, so these are the small issues if improved than can take company to have major profits, also the Sara Lee U.K. is willing to bring a full manufacturing of Sara Lee products in U.K. rather than importing them which is again creating a need of import substitution in U.K. as the Yardley is our own brand and we still are consuming so many of U.S. products. www.saralee.com Read More