PROMOTION

Promotion (also one of the 4P’s of marketing) which is known as marketing communication is one of the major attribute for any of the product or services. For any brand one of the major issues faced is that of sustaining its market share. They need to trade off between maintain their brand in the market coupled with making acceptable profits. To attract more customers and to increase their market share, companies adopt various promotion techniques which help in generating revenue. For this purpose there are 8 major modes of communication in marketing communication mix as follows:

In addition to that it is very important that we understand the concept of Above the Line (ATL) and Below the Line (BTL) advertising and Through the line (TTL).

-       Above the Line (ATL) advertising is where mass media is used to promote brands and reach out to the target consumers. These include conventional media as we know it, television and radio advertising, print as well as internet.  This is communication that is targeted to a wider spread of audience, and is not specific to individual consumers. ATL advertising tries to reach out to the mass as consumer audience.

-       Below the line (BTL) advertising is more one to one, and involves the distribution of pamphlets, handbills, stickers, promotions, brochures placed at point of sale, on the roads through banners and placards. It could also involve product demos and samplings at busy places like malls and market places or residential complexes. For certain markets, like rural markets where the reach of mass media like print or television is limited, BTL marketing with direct consumer outreach programmes do make the most sense.

-          Through the line (TTL): “Through-the-line” marketing is the combination of above-the-line and a specific type of below-the-line activity that is direct marketing. The essence of “through-the-line” marketing is to use mass advertising for forming a prospects / customers database which can be used for direct marketing activities e.g. an ad in a magazine in which a toll-free number is displayed that is used for direct contact with prospects.

MAGNUM uses all these kinds of advertising extensively. A pictorial representation of these concepts is given as follows:

Read More

DISTRIBUTION

Distribution channel or the marketing channel plays a very crucial role in making the product available to the final customer or the target consumer. There are various types of marketing channels or distribution channels. These are:-

 Push and Pull Strategies:

In Push Strategy, manufacturer uses his sales force, trade promotion, money or other means to include intermediaries to carry promote and sell its products to end users. MAGNUM does not include any push strategies.

In Pull Strategy, manufacturer users advertising, promotion and other forms of communication to persuade the consumer. This is the form of communication MAGNUM prefers and uses. Magnum uses pull strategy as there is high brand loyalty and high involvement in the category. Kwality wall’s adopts pull strategy to persuade the consumers to demand the product from the intermediaries. It uses advertising, promotion and other forms of communication for generating the demand for the product. It also uses an exhaustive distribution network that includes kiosks, carts and stores spread across streets, malls and theme parks.

Direct and Indirect Channel:

Direct channel-In this type of distribution channel the direct they directly provide the finished goods to the customer without any intermediaries in between.

Indirect distribution- Indirect distribution channel consist of one or more intermediaries between the manufacturer and the final customers. MAGNUM uses indirect distribution for its products. 

 PRODUCER – DISTRIBUTOR – RETAILER - CUSTOMER.

Read More

PRICING

Pricing is the process of determining what monetary benefit a company will receive in exchange for its products. Factors that affect pricing of any product are as follows:

i.         Manufacturing cost

ii.        Market places

iii.        Competition marker condition

iv.        Quality of product

Pricing is the revenue generating element among the 4 P’s of the marketing and is considered to be one of the major determinants of a consumers buying decision process.

Pricing strategy of products change due to factors like:

·         Income level

·         Standard of living

·         Competition in the market.

Price is an important evaluative criterion, A comparative pricing chart for MAGNUM and its major competitors in the Indian market is as follows:

Name of the ICE CREAM	Quantity	Cost (in Rupees)

Hence we observe that even though MAGNUM  is priced at more than a lot of its competitors, it still enjoys the luxury of being the highest seller of ice cream  in the world.

Read More

PRODUCT MIX ELEMENTS

According to AMA, Product mix is defined as:

“The full set of products offered for sale by an organization. The product mix includes all product lines and categories. It may be defined more narrowly in specific cases to mean only that set of products in a particular product line or a particular market”.

Every company’s product mix has a certain width, length, depth. In case of MAGNUM, since it makes only ice creams, there will be no width of the product; however the rest will look as follows:

A product mix is the set of all products offered for sale by a company. Product line is a broad group of products for similar uses and with similar characteristics. An organization’s product mix has four dimensions: 

Width: The product mix width is the number of product lines in the product mix.

Length: The product line length shows the number of different products in a product line.

Depth: Some of the product types may be split into subgroups which is shown by the product line depth.

Consistency: Describes how closely related the various product lines are in end use, production requirements, distribution channels, etc.

Hindustan Unilever has a wide width offering personal care, home care, food and beverages, etc. Skin care, oral care, hair care, fabric care, beverages, food, etc are the product lines that Unilever as a parent company carries.The food line of HUL contains beverages like tea, coffee ,ice cream, food, etc.

The length of the ice cream line consists of the products of Kwality walls like frozen delights ,creamy delights, fruttare, paddle pop, cassatta, kulfeez.

The depth of the Kwality walls ice cream includes magnum, cornetto, feast, sundae, etc which are all chocolate related items.

Unilever’s ice cream product line is consistent as the distribution channels from which the ice cream products flow is the same.

Read More

PRODUCT LEVELS

CORE BENEFIT : The benefit the customer is really buying is satisfaction and indulgence. Magnum being a premium ice cream brand has to offer these basic benefits to the customer in order to gain the customer value.

BASIC PRODUCT : The basic product is premium choco bar. A chocolate coated ice cream bar that gives a luxurious ice cream experience.

EXPECTED PRODUCT: The expected product of Magnum is that it would provide that quality others cannot. Magnum is an adult focused ice cream brand, therefore it is important for the product to meet the expectations of the young customers.

AUGMENTED PRODUCT: Augmented product would be more variants and innovation in design and serving of the ice cream bar as compared to other competitive ice cream brands. The brand would introduce flavors above the customer expectations.

POTENTIAL PRODUCT: Potential product would be introduction of Magnum in new jars. Novelties in ice cream is an important factor for the growth of the potential product.

THE PRODUCT HIERARCHY

 1.    Need family : Quality ice cream

2.    Product family : Food

3.    Product class : Ice cream

4.    Product line : Kwality walls

5.    Product type : Chocolate bar.

6.    Item : Magnum

Read More

MARKETING MIX ELEMENTS

Read More

PRODUCT LIFE CYCLE

The Product Life Cycle (PLC) is used to map the lifespan of a product. It is the period of time over which an item is developed, brought to market and eventually removed from the market. There are generally four stages in the life of a product. These four stages are the Introduction stage, the Growth stage, the Maturity stage and the Decline stage. There is no set time period for the PLC and the length of each stage may vary. One product’s entire life cycle could be over in a few months. Another product could last for years. Also, the introduction stage may last much longer than the growth stage and vice versa. The four stages in a Product Life Cycle are:

Introduction: Product is introduced in the market with intention to build a clear identity and heavy promotion is done for maximum awareness. Before actual offering of the product to customers, product passes through product development, involves prototype and market tests. Companies incur more costs in this phase and also bear additional cost for distribution. On the other hand, there are a few customers at this stage, means low sales volume. So, during introductory stage company’s profits shows a negative figure because of huge cost but low sales volume.

Growth: In this stage, company’s sales and profits starts increasing and competition also begin to increase. The product becomes well recognized at this stage and some of the buyers repeat the purchase patterns. During this stage, firms focus on brand preference and gaining market share.

Maturity: At maturity stage, brand awareness is strong so sale continues to grow but at a declining rate as compared to past. At this stage, there are more competitors with the same products. So, companies defend their market share.  At this stage usually loyal customers make purchases.

Decline: Decline in sales, change in trends and unfavorable economic conditions explain decline stage. At this stage market becomes saturated so sales declines. It may also be due technical obsolescence or customer taste has been changed.

PLC OF MAGNUM

Magnum was introduced in 15th of June,2001.

Effective weights of mass audience advertising publicly displayed in the summer landscape, would strengthen consumer attachment to the brand and develop strong associations with the summer season .The first premium-quality ice cream to enter the adult impulse market. Magnum was introduced in Chennai first and then rolled out in other cities like  Mumbai, Hyderabad, Bangalore and Pune. Advertisements and campaigns were carried out to build the new product of Kwality walls-MAGNUM.As the chocolate bar is priced high as compared to other choco bars it was necessary to develop a demand for such a premium ice cream product in the emerging country like India.

Magnum is considered to be currently in the growth phase. The sales of Magnum have increased over the recent years as consumers now are more aware about this product through the expansion of intense television advertisements and creative marketing campaigns. Magnum’s goal during this stage would be to gain consumers preference and further increase their sales. 

Read More

COMPETITION AND COMPETITORS

For any product, one of the most important things to be thought about is its market competition. What are the closest substitutes to their products, who can be a threat to the market share of the product etc. There is however a noticeable difference between the words – competition and competitor.

Competition is a state in which a player enters while fighting or rivaling with another player in the same segment of products for the same area and same share of the market , whereas,

Competitor is an entity who is competing against another entity in the same marketing space, with a similar product and for the same market share as the other entity.

The competitive scenario in a market can be properly analyzed using Porter’s model of 5 forces analysis which is represented as follows:

The key competitors are:

Amul

Mother dairy

Baskin and Robbins

Local competitors

1. Industry (Segment) Rivalry:

The market in an industry can sometimes be unattractive if the product already has strong substitutes and competitors. This might lead to a large amount of strife between competitors. Such a market experiences a lot of price fluctuations.

Industry Rivalry for Magnum is High owing to the following:

There are powerful local players in the market like Amul, Creambells, Mother dairy, Top n Town, etc.

2. Potential Entrants:

A potential entrant refers to local entrants into the business which bring in competition to the product. On one hand, a local brand might find it difficult to establish itself in the market, however being locals; they have a greater understanding of the customer.

 Liberalization and globalization has made it easier for the foreign players to enter  the Indian market.(eg. Baskin and Robbins).

3. Substitutes:

Substitutes refers to products which might pose a threat to the product because they are almost identical or might even prove to be a better selling product if the company selling it goes for aggressive pricing.

There is a high threat from substitutes. There are a lot of cultural and traditional substitutes for ice creams like sweets, desserts, kulfi, etc.

4. Bargaining Power of Buyers

 Ice cream industry is a huge market. But Magnum is a luxury product so customers have a low bargaining power. However it depends on factors like pricing and availability of substitutes.

5. Bargaining Power of Suppliers

Magnum has a low bargaining power of suppliers as manufacturer can easily switch to a   different supplier at low cost.

Read More

BUYING DECISION PROCESS AND CONSUMER BEHAVIOR

For any product, it is essential to know what factors influence the consumer behavior. It is defined as the study of how individuals, groups and organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and wants. In layman’s terms, it refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants.

The Maslow’s hierarchy of needs pyramid defines diagrammatically as to WHY a consumer buys a product. It is as follows:

Digging into the concept of consumers buying decision process, we can find a 5 step model which is as follows;

1.    Problem Recognition: 
The buying process commences with the consumer realizing that he requires something. This realization later translates into a purchase. Magnum is not a solution to a problem but an exceptional alternative for the consumers who wish to experience a sophisticated and luxurious experience. Magnum is recognized as a symbol of royal treatment. It provides a sense of satisfaction and pleasure from its first distinctive crack to the last bite.  

2.    Information Search: 
After realizing the problem, the consumers next step is to find potential solutions i.e. product/s which might satisfy his current need. (Ask around as to which ice cream might give him maximum satisfaction)  This is called the information search phase. This information can be obtained from following sources-

     a.    Personal: Family, friends, neighbors etc.
b. Commercial: Advertisements, Flyers, Salespersons, Websites etc.
c. Public: Mass media, ratings etc.
d. Experiential: Contact with the product, use, feeling the product etc.

Since Magnum is Pro active with its promotions and advertisements, information can be found on all sources- personal,commercial, public and experiential.

3. Evaluation Of Alternatives: 
During this stage of consumer decision making process perspective customers are engaged in evaluation of alternatives. In other words, during this stage “consumers consider the relative importance of each attribute of the product-service mix”. Influencing customer behaviour at this stage of decision making process is critical for retailers in terms of improving their levels of customer attraction and retention. The consumer usually has in mind what exactly is he expecting from his potential buy. So it is on the basis of a few parameters that he evaluates and eliminates choices, coming down to a select few in order to make his final decision.

 For example, a consumer will finally know what alternatives he has apart from MAGNUM; however he will look into factors like Price, Exceptional ice cream quality, Range of flavours, Attractive packing which highlights the premium nature, Unique shape and dark chocolate coating and finalize the brand.

4. Purchase Decision:

This is the stage where the consumer actually makes the decision! This decision comes after consideration of factors such as brand, dealer, quantity, timing and mode of payment. This is a stage when the marketer has to be extremely wary of the product positioning from the point of view of perceived risks. These may be:

a. Functional risk: Product performance
b. Physical risk: Product may cause physical harm or discomfort to user
c. Financial risk: Worth of the product
d. Social risk: Using the product brings embarrassment to user
e. Psychological risk: Product affects mental well being of the user
f. Time risk: Product is not worth the time invested in it and in cases, time that would be invested later looking for a better replacement.

Factors playing significant role on the choice of purchase at this stage differ if it’s a first time decision or repeat. For the first time, factors like packaging, flavours, quality and price play and important role. Usually the consumer will have a desire to experience the superiority of magnum over the other chocolate bars. After trying it, the consumer may think on the past experience, value the ice cream is providing as compared to the other similar ice cream products and then decide to buy or not to buy.

 

5. Post-Purchase Behavior: 

The behavior of a consumer post making a purchase may be termed as post-purchase behavior.This is based on how was his experience with the product. If the customer derive the satisfaction he wanted or not. If the consumer is very happy with his experience, he might end up as a repeat buyer for the product and also lead to recommendations to potential buyers. Alternatively, if the experience of a buyer is not very good, he will negatively publicize the product, which might affect the sales of the product.

In the end, we can conclude that the consumer’s behavior and buying patterns are an essential part of marketing strategies employed by the producers. It is of paramount importance for any marketer to analyze his potential buyer’s frame of mind as it will help him sell his product better.

Read More

CUSTOMER VALUE AND BENEFITS

 “The difference between the prospective consumer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives“

– by Philip Kotler.

The concept of customer value is one of the most important factors affecting the marketing of any product. Value represents the use for of the product in the minds of the customer. Every product provides some value to the customers. It offers some set of benefits, advantages and disadvantages to the customer which is the reason why the product has been bought. The choice of a product depends a lot on its value as perceived by a potential customer.

In simpler terms, it is the difference between what customers gets from a product, and what he or she has to give in order to get it.

Once we can define customer Value, it is important that we understand the concept of Total Customer Benefit and Total Customer Cost. Philip Kotler defines them as follows

Total Customer benefit – “the perceived monetary value of the bundle of economic, functional and psychological benefits customers expect from a given market offering because of the product, service, people and image“.

Total Customer Cost – “perceived bundle of costs customers expect to incur in evaluating, obtaining, using and disposing of the given market offering, including monetary, time, energy and psychological costs“.

All the above mentioned concepts can be put together in a flow chart as follows:

Value derived from Magnum Ice Cream by a customer:

·   Image benefit: The Image benefit is the brand name associated with the product, MAGNUM and HUL. Magnum is the world's biggest stick ice cream brand and accounts for almost 2% of the total revenues of Hindustan Unilever, the largest ice cream maker in the world. Kareena is the ‘Pleasure Ambassador of the brand’ and she perfectly personifies the brand with her irresistible charm and royal demeanor.”

·       Personnel benefit: Ice creams offer no personnel benefit.

·    Services benefit: Services benefit accounts for the attributes of the services offered along with the product. Any kind of help, instructions or assistance offered with the product would fall under this. In case of Magnum, the nutritional content, ingredients, customer helpline numbers etc. will make up this benefit.

·       Product benefit: Product benefit accounts for the attributes of the product, which might entice a potential consumer to decide to choose this product over others. Magnum is pure pleasure from its first distinctive crack to the last bite.  Magnum is recognized as a symbol of royal treatment. It is crafted skillfully from bean to bite from the finest Belgian chocolate to invoke a sophisticated and luxurious experience. Its attractive gold –wrapper screams Quality. It provides a sense of satisfaction.

Costs Pertaining To A Magnum Ice Cream:

·       Psychological cost:  Psychological cost is the total mental effort made during acquiring and using the product from the moment it was bought to the moment it was consumed. It is also very difficult to measure this as it would take lots of data to biologically decide what goes where.

·   Energy Cost:  Energy cost refers to the energy spent by the buyer during the entire process of buying the product. Energy cost related to Magnum is negligible as its available easily.

·   Time Cost: Time cost is the total amount of time that has been invested by a customer during his buying process. The time taken for the customer to reach a store and to buy a stick of Magnum is the time cost here.

·  Monetary Cost: Monetary cost encompasses the literal cost incurred by a customer in order to obtain the product. Cost per ice cream multiplied by the number of ice creams purchased is the total monetary cost in the case of Magnum.

Rs 80 per stick.

Hence, summing it all up, we can say that the ‘Customer Perceived Value’ for a product is a function of the ‘Total Customer Benefit’ and ‘Total Customer Cost’.

Read More