Marketing Strategies - Pauls Organic Full Cream Milk - Case Study Example

Marketing Report: Pauls Organic Full Cream Milk Executive Summary The key aim of this report is to examine the marketing strategies employed by Parmalat Australia Ltd to market Pauls full cream milk. Foremost, this report examines the marketing strategies employed by Parmalat Australia Ltd to market Pauls full cream milk in relation to ‘Segmentation’, ‘Targeting’ and ‘Positioning’ of the product. The marketing strategies used by Parmalat Australia are the key focus in this report mainly because the company has a strong brand equity and presence in the market. Furthermore, this report focuses on Pauls full cream milk because, it is one of the most purchased dairy products produced and marketed by Parmalat Australia (Parmalat 2012b). The findings of this report depict that when it comes to marketing Pauls full cream milk, Parmalat Australia has segmented its consumer market based on behavioural aspects of consumer markets. The company targets its identified market segments by using advertising and other promotional strategy so as to appeal to the specific needs of the identified consumer market segments (Lamb, Fair & McDaniel 2011). In the market, Pauls full cream milk is positioned based on its attributes and health benefits that it provides to its consumers. Additionally, this report recommends an integrated marketing mix for Parmalat Australia Ltd with regards to the 7P’s; product, place, promotion, price, process, physical evidence and process. TABLE OF CONTENT Introduction 4 Segmentation 5 Targeting 6 Positioning 7 Perceptual Positioning Map 8 Integrated Marketing Mix 9 Product 9 Price 10 Promotion 11 Placing 12 People 12 Process 13 Physical Evidence 13 Recommendations and Conclusion 14 References 16 Choice, 2009, Milk products review: Full Cream Milk Results, viewed on 30 August 2012 17 Introduction The key aim of this report is to examine the marketing strategies employed by Parmalat Australia Ltd to market Pauls full cream milk. Pauls Full Cream Milk is natural tasting and unhomoginised milk that is suitable for the whole family. This dairy product is a rich source of vitamins, protein and minerals and is available in both fresh and long life packs in different quantities (Parmalat 2012).Basically, Pauls Full Cream Milk is a dairy product under the brand name “Pauls Milk” that is currently owned, produced and marketed by Parmalat Australia Limited. Pauls milk was founded in 1923 and has over time been under different company names namely; Queensland United Foods Ltd, Pauls Ice Cream & Milk Ltd and Pauls Limited respectively. In 1998, Pauls Milk under Pauls Limited was bought by Parmalat Australia. Currently, Pauls Milk is a brand under Parmalat Australia Ltd. Over the time, Pauls Milk as a brand has evolved to incorporate a wide range of dairy products. Some of the key dairy products under the Pauls Milk brand include; Pauls full cream milk, Pauls butter milk, Pauls goat milk, Pauls skinny milk, Pauls trim, Pauls zymil, yoghurts and creams (Loscam 2007; Parmalat 2012b). In this report the focus will be on Parmalat Australia’s marketing strategies in relation to Pauls full cream milk. Foremost, this report will critically examine the marketing strategies used to market this diary product in relation to ‘Segmentation’, ‘Targeting’, ‘Differentiation’ and ‘Positioning’ of the product. Moreover, this report will recommend an integrated marketing mix for Parmalat Australia Ltd with regards to the 7P’s; product, place, promotion, price, process, physical evidence and process. Parmalat Australia’s marketing strategies will be the key focus in this report mainly because the company has a strong brand equity and presence in the market. This report will seek to highlight the marketing strategies that the company uses in order to maintain a strong presence in the market. Moreover, this report will focus on Pauls full cream milk because, it is one of the most purchased dairy products that are produced and marketed by Parmalat Australia (Parmalat 2012b). Segmentation Market segmentation involves segmenting or grouping a large market into different groups or segments based on similar consumer needs, trends and characteristics. Some of the key basis commonly used for segmenting consumer markets include; geographic factors, psychographic factors, behavioural factors and demographic factors (Bose 2004; McDonald & Dunbar 2004). Parmalat Australia employs segment marketing in order to effectively target its consumers by providing products that specifically cater to their needs. Thus, the company tries to identify market segments that have similar characteristics. When it comes to marketing Pauls full cream milk, Parmalat Australia has segmented its consumer market based on behavioural aspects of consumer markets. Some of the key behavioural aspects taken into consideration when segmenting this market include; benefits sought from the product, consumer tastes and brand loyalty. Pauls full cream milk targets the segment of the market that prefers organic and permeate-free full cream milk as opposed to skimmed milk. This dairy product also targets consumer market segments that are seeking for nutritional benefits sought from the consumption of natural full cream milk (Parmalat 2012; Parmalat 2012c). In addition to this, as a dairy product under the brand Pauls milk, Pauls full cream milk targets markets segments comprising of consumers who are loyal to Pauls milk. In Australia, Pauls milk is one of dairy brands with a strong brand equity and presence in the market. Hence, Parmalat Australia capitalises on the Pauls milk’s strong brand equity and presence in the market to market Pauls full cream milk (Parmalat 2012d). Targeting Targeting can be considered as a marketing strategy that entails using advertising and promotional strategy in order to appeal to the specific needs of the identified consumer market segments (Lamb, Fair & McDaniel 2011). Pauls full cream milk is distinctively targeted to different market segments so as to meet the diverse needs of consumers. For instance, in market segments where consumers are seeking for a dairy product that appeals to their tastes, Pauls full cream milk is marketed and advertised in print and electronic media platforms as a great natural tasting dairy product that is suitable for the whole family Pauls full cream milk also targets the market segment of milk consumers who prefer organic milk due to its perceived health benefits and who also seek the nutritional benefits of full cream milk as opposed to skimmed milk (Parmalat 2012). In order to effectively capture these market segments, Parmalat Australia ensures that, in the course of marketing or advertising in its print and electronic media platforms or in its label or packs, clear information is provided regarding the specific ingredients used in the creation of Pauls full cream milk. The company also ensures that it highlights the nutritional and health benefits of consuming the dairy product. In addition to this, the company targets market segments comprising of consumers who are loyal to the Pauls milk brand by strategically placing adequate volumes of Pauls full cream milk in local super markets, retail stores and chain stores so as to meet the demands of consumers who are loyal to the brand. The company also ensures that the product is available in different quantities in both fresh and long life packs. This multi-segment targeting has over the years enabled Parmalat Australia to profitably capitalise on various market segments and create strong brands that closely meet the needs of its target market (Parmalat 2012b; Parmalat, 2012c). Positioning Positioning can be described as a process through which marketers create an impression or an image of a product or brand in the minds of consumers in different target markets (Lamb, Fair & McDaniel 2011). Pauls full cream milk is positioned based on its attributes and health benefits that it provides to its consumers. Basically, Pauls full cream milk is positioned as natural and nutritional milk that provides a rich source of minerals, vitamins and protein. The company also positions this product as a healthier alternative to processed forms of milk (Parmalat 2012). The company does this by ensuring that, in the course of marketing or advertising in its print and electronic media platforms or in its label or packs, clear information is provided regarding the health benefits and specific ingredients used in the creation of Pauls full cream milk (Parmalat 2012). Moreover, Pauls full cream milk is positioned based on its price and quality characteristics. Pauls full cream milk is positioned as a quality, safe and reliable dairy product that provides consumers with value for their money (Parmalat 2012b) Perceptual Positioning Map Healthy/ Nutritious/ High quality *Pura Boost * Parmalat Pure Organic Full Cream Milk * Harvey Fresh * Pauls Full Cream Milk * Anlene *Fleurieu Jersey Premium Costly Cost-effective * Family choice milk * Farm House Milk Low Quality (Choice 2009) Integrated Marketing Mix The marketing mix concept was first developed by McCarthy (1960) and Borden (1964). This framework has over the years been extended to the 7p’s namely, product, price, promotion, people, process and physical evidence. According to Kotler and Armstrong (1993), the integrated marketing mix comprises of a set of variables that are controllable that a company uses in order to effectively respond to its target market. In principle, the key of the 7P’s integrated marketing is to enable organisations to develop and maintain a competitive edge in the market (Collier 1991). Product Kotler (1984) defines ‘product’ as anything that is provided to a market for attention, consumption or acquisition. In this case, Kotler’s definition of a product is relevant since it shows that products are not only tangible but also intangible. Clarke (2000) considers a product as the most essential aspect of an integrated marketing mix since it is what satisfies the wants and needs of consumers. Some of the key aspects of a product that play a critical role in determining customer satisfaction include; quality, brand name, packaging, varieties and features. When it comes to marketing Pauls full cream milk, Parmalat Australia should take in to account these factors in order to effectively meet the needs of consumers and maintain the competitive edge of the product in the market. For instance, the company should ensure that Pauls full cream milk is of high quality, in the sense that, it is safe for consumption, taste-full and nutritional. In order to realise this, the company should regularly conduct quality control so as to ensure that the product meets the set quality standards. Secondly, the company should continuously reinvent its packaging so as to have an appealing look that will capture the attention and loyalty of new consumers. Parmalat Australia should also focus on developing a varied range of product features in order to meet the needs of consumers in different market segments. For example, the company should innovate, fruit milk, full cream milk shakes, full cream powdered milk and full cream milk specifically meant for infants or sportsmen. Price Price refers to the cost or amount of money that is required or expected to purchase a particular product. Price is a key variable in the marketing mix that must be set based on the other 3P’s (Botten 2009). Currently, the Australian diary industry is very competitive. This market is characterised by aggressive price competition between new and established brands (Parmalat 2012c). Therefore, in order for Parmalat Australia to maintain its competitive edge in the market especially in relation to marketing Pauls full cream milk, the company should make sound pricing decisions. For instance, the company can employ product mix pricing strategies such as; penetration pricing for new dairy products and cost plus pricing for other products. Penetration pricing will help the company to raise awareness about a new diary product, encourage consumers to try new dairy products and help the company to capture a wider market share as compared to its competitors. On the other hand, implementing a cost plus pricing strategy will enable the company to get back its investments since the costs of dairy products will be set based on the cost accumulated through manufacturing and promoting the product (Richards 2012). Promotion Promotion can be described as the process of persuading, informing or reminding potential and regular customers about the qualities, price or location of a particular product (Botten 2009). In order for any business to be successful, the use of effective promotion is crucial. Some of the promotional strategies that Parmalat Australia can capitalise on in order to enhance its profitability and competitive edge in the market include; public relations, direct selling, advertising and sales promotion. These strategies can be used tactfully based on the nature of the identified market segments for Pauls full cream milk. For instance, when it comes to promoting this dairy product in market segments comprising of consumers who are seeking for nutritional benefits sought from the consumption of natural full cream milk , the company can use both print and broadcasts advertisements to highlight the nutritional or health benefits of consuming the dairy product. It is also essential for the company to focus on developing and maintaining a positive public image in order to attract customer brand loyalty (Clarity 2005). Placing When it comes to an integrated marketing mix, placing refers to the distribution channel used when delivering products to consumers (Clarity 2005). Distribution channels help companies to deliver their products more efficiently to consumers. Based on the nature of the company’s business and the type of products that the company produces and markets, Parmalat Australia should use a hybrid distribution channels as this will help the company to efficiently reach more customers. For instance, when it comes to marketing Pauls full cream milk, the company can distribute this product using a direct retail system, this involves selling the product in company-owned stored. The company can also use a direct marketing system, this will involve selling the product through direct mail. Additionally, the company can sell its products through a single-party selling system by selling its products through local grocery stores. This multi-channel or hybrid approach will enable the company to expand the distribution of its products and reach a wide audience of consumers (Sharma 2009). People In an integrated marketing mix, the term ‘people’, may refer to employees in an organisation or individuals who play a role in the service delivery or marketing process. The role of people in the course of marketing is very crucial. It is people who determine the effectiveness of different marketing strategies employed. Therefore, it is crucial for Parmalat Australia to focus on developing and motivating its workforce in order to realise better performance outcomes. One of the key strategies that the company can use to develop and motivate its employees include; implementing regular employee training programs in order to enhance the knowledge and skills of its employees. The training programs should focus on equipping employees with relevant skills and knowledge that will enable them to effectively market the company’s brands and products (Clarity 2005; Botten 2009). Process In an integrated marketing mix, the ‘process’, aspect may refer to the process of service delivery. In this case, factors such as effectiveness and efficiency of the service process in relation to aspects such as procedure or policies adopted, degree of mechanization used in the course of the service process, waiting systems, distribution systems and stocking among many other factors are taken into account. When marketing Pauls full cream milk, Parmalat Australia can ensure effectiveness and efficiency in its service delivery process by carefully selecting and training its service personnel, regularly conducting quality controls and audits to determine the effectiveness of the company’s service delivery (Botten 2009). Physical Evidence Physical evidence comprises of all the visible and tangible touch points that customers encounter before they buy a product. Physical evidence plays a critical role in influencing the judgment of consumers regarding a particular product. With regards to Pauls full cream milk, physical evidence may entail the price of the product, packaging or information on the product label or packs. It is therefore essential for Parmalat Australia to ensure that it uses suitable pricing strategies for the product, package the product in an appealing manner and display clearly nutritional or health information about the product in its packs or labels (Clarity 2005; Botten 2009). Recommendations and Conclusion Basically, this report has examined the marketing strategies employed by Parmalat Australia Ltd to market Pauls full cream milk in relation to ‘Segmentation’, ‘Targeting’ and ‘Positioning’ of the product. The findings of this report depicts that when it comes to marketing Pauls full cream milk, Parmalat Australia has segmented its consumer market based on behavioural aspects of consumer markets such as benefits sought from the product, consumer tastes and brand loyalty. The company targets its identified market segments by using advertising and other promotional strategy in order to appeal to the specific needs of the identified consumer market segments (Lamb, Fair & McDaniel 2011). In the market, Pauls full cream milk is positioned based on its attributes and health benefits that it provides to its consumers. Pauls full cream milk is generally positioned as natural and nutritional milk that provides a rich source of minerals, vitamins and protein (Parmalat 2012). In addition, this report has recommended an integrated marketing mix for Parmalat Australia Ltd with regards to the 7P’s; product, place, promotion, price, process, physical evidence and process. Some of the recommendations highlighted in this report include; Parmalat Australia should ensure that Pauls full cream milk is of high quality, safe for consumption, taste-full and nutritional by regularly conducting quality control so as to ensure that the product meets the set quality standards. The company should employ product mix pricing strategies so as to capture a wider market share as compared to its competitors. In order to enhance its profitability and competitive edge in the market, Parmalat Australia should capitalise on promotional strategies such as public relations, direct selling, advertising and sales promotion. Parmalat Australia should use hybrid distribution channels so as to help the company to efficiently reach more customers. The company should develop and motivate its employees by implementing regular employee training programs in order to equip employees with relevant skills and knowledge that will enable them to effectively market the company’s brands and products (Clarity 2005; Botten 2009). When marketing Pauls full cream milk, Parmalat Australia shoudl ensure effectiveness and efficiency in its service delivery process by carefully selecting and training its service personnel, regularly conducting quality controls and audits to determine the effectiveness of the company’s service delivery (Botten 2009). References Borden, H. 1964, “The concept of marketing mix”, Journal of Advertising Research, vol 4, pp. 2-7. Bose, C. 2004, Principles of Management and Administration, PHI Learning, New Delhi. Botten, N. 2009, CIMA Official Learning System Enterprise Strategy, Elsevier, Amsterdam. Choice, 2009, Milk products review: Full Cream Milk Results, viewed on 30 August 2012 Clarity, 2005, The marketing mix: 7P’s of the marketing mix, viewed on August 30, 2012 Clarke, G. 2000, Marketing a service for profit: A practical guide to key service marketing concepts, Kogan Page, New York. Collier, A. 1991, “New Marketing Mix Stresses Service”, Journal of Business Strategy, vol 12, no 2, pp. 42-45. Kotler, P. 1984, Marketing Management: Analysis, Planning and Control, 5th Ed, Prentice-Hall, New York. Kotler, P. & Armstrong, G. 1993, Marketing and Introduction, 3rd Ed, Prentice Hall, New Jersey. Lamb, C., Fair, J. & McDaniel, C. 2011, Essentials of Marketing, Cengage Learning, London. Loscam, 2007, Parmalat uses Loscam’s pine pallets, viewed on 23 August 2012< http://www.ferret.com.au/c/Loscam/Parmalat-uses-Loscam-s-pine-pallets-n671440> McDonald, M. & Dunbar, I. 2004, Market Segmentation: How to do it, how to profit from it, Elsevier, Amsterdam. McCharty, J. 1960, Basic Marketing: A Managerial Approach, Irwin, Toronto. 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