Situation Analysis Of Dairy Queen Milk

5156 words (21 pages) Essay

19th May 2017 Marketing Reference this

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This assignment covers the marketing plan for Dairy Queen Milk Pakistan.I have used many components of marketing plan to complete this assignment. In this assignment I have done situation analysis.In situation analysis by doing swot analysis dairy queen is a brand of Haleeb foods which is a strong company.It is pioneer in pouch packing.But the unavailability and the

Situation Analysis of Dairy Queen Milk

Situation analysis describes an organization’s competitive position, operating and financial condition and general state of internal and external affairs. (By D.Power)

Strengths:

1. Dairy Queen has good brand awareness because it is a part of Haleeb Foods which is a well reputed company in Pakistan and has a strong portfolio of brands.

2. Dairy Queen milk is facing low cost because it is available in the market in pouch pack which is less costly than brick packing. So it is bearing a low cost in the production of milk.

3. Dairy Queen Milk is pioneer in providing pouch pack because it is the one which has come in pouch pack.

4. Dairy Queen is facing less distribution cost because it has skilled and motivated staff.

5. Dairy Queen is providing a best quality and healthy milk because it is using an efficient Ultra heat treatment technology

Weaknesses:

1. Dairy Queen milk has a big weakness of availability and access because it is not easily available at every shop and stores. It is only available in certain shops and stores. People face a lot of problems in finding it.

2. Many people do not have enough awareness about the Dairy Queen milk because it is not so much promoting itself by promotions. In many areas people do not have enough knowledge about.

3. Packing of dairy milk is not so good because people are not so much satisfied with this packing. Its packing is loose because it is proving pouch pack from which sometimes leak and milk pour out from the pouch.

4. Dairy Queen packaging is not so good because customer cannot easily hold it in the fridge as compared to Haleeb and Nestle.

5. Dairy Queen is loosing the share in the market because it is not fulfilling the demand of the customers sometimes it has become.

Opportunities:

Dairy Queen can attract the more customers who lie in middle income as well as high income bracket because there is high inflation in the Pakistan economy where as its price lies between the Olper milk and Nestle milk which are the competitors.

Dairy Queen can increase its market share by reducing it price. Because people in Pakistan are more price conscious.

Dairy Queen can increase its sales by going into new areas where people have acknowledged about this product but it is not available there.

Threats:

Floods in Pakistan is a big threat for Dairy Queen because it can a lot of problem in carrying the raw material into the factory and in distribution of the finished good to the market because roads network has been badly effected.

Dairy Queen can face a more decrease in sales because it is not giving so much attention to the promotions of the product. So people do not know so well about the product and its features.

Dairy Queen can be totally out from the market because the distribution force is not so much active and Dairy Queen is not easily available in the market. So it can create a negative impact in the mind of the customer.

It can happens that another competitor introduce a same product then the market share of Dairy Queen will more effect because competitor product will attract the customers of the Dairy Queen.

Dairy Queen can face a high cost of raw material in the future because their is recession and high inflation in the Pakistan economy so it will effect its Quality.

Porter’s Five Forces

The Five Forces model of Porter is an outside in business unit strategy tool that is used to make an analysis of the attractiveness of an industry structure.(Ref#6)

Threat of Substitutes:

Dairy Queen has threat of substitute from the loose milk and Gawalla market(shops who sell fresh open milk).There are many fresh milk shops and other milk that are available locally like in the streets of residential areas,markets and shopping malls.centers in the market. So the threat of substitutes is high because there is high inflation and recession in the Pakistan economy. So if the price of Dairy Queen milk increase then the customer will shift easily to the loose milk or other product. which is cheap in price.

Bargaining Power of Suppliers:

Dairy Queen face a low cost in buying the fresh milk because it buy fresh milk in huge volume and it has a good supplier system which reduce the power of the supplier so their switching cost is not so much high. Dairy Queen collected is using two ways to collect the fresh milk from the suppliers one is self collection and the second one is contract collection.

Switch cost and volume:

As Dairy Queeen is a part of well known brand Haleeb and fresh milk is main ingredient for their UHT milk, so they know if they rely on few suppliers with large volumes,it can create problems for them.In order to reduce their supplier power it has a good supply system due to which its switching cost is not high.

Bargaining power of buyers:

Bargaining power of the customer is high,due to the availability of same product from other companies in the market almost at the same price.Initially when there not many companies in the market ,bargaining power of customer is more high.

Buyer Information:

In the recent time with the increase of electronic and print media ,awareness in customers have increases and now customers are aware what they are going to purchase and what are other products /brands are available almost at the same price,also people becomes health conscious.This ultimately affects any company sales and increase buyer power.

PESTLE Analyses

PESTLE is used to external analyses means analyses on the macro environment in which the business operates.

PEST ANALYSIS

Government has always tried promoting dairy industry within the country. For this government has given lots of relaxation to milk industry for instance there is no tax or excise duty on milk products. Government has a complete and comprehensive legal framework for milk industry to keep things in flow and up to mark within the industry. At the same time government keeps on revising its policies that could help improving overall industry.

ECONOMICAL

The main economic factor acting for this industry is uneducated suppliers of raw material, so lots of raw material is affected in terms of its quality and preservation issues and a big percentage of raw materials go to waste before its being processed. But at the same time UHT milk doesn’t have any kind of taxes on it which makes it a good economic factor for the industry growth and improvements in its production. As UHT milk is a bit costly than the ordinary milk or non processed milk so income factor of consumer is always an important economical factor for the industry players. UHT milk industry carry consumers from middle and lower class and income level for this class has increased over time which is something in favor for the industry.

SOCIAL

Socially the most important thing for the industry is that people have realized the importance of UHT milk because of its safety and better health issues than ordinary milk that could carry lots of bacteria and germs during its complete delivery to the end user. But at the same time people avoid using UHT milk due to its cost factor, being costly consumption of UHT milk is far less than other un processed milk, but with the time and awareness among people they have realized that the cost they are paying does pay them back good enough in terms of health issues and quality of milk. So with time this issue is decreasing as people have got to know the value of what they are paying for. Critical social issue going around among consumer about UHT milk is that its something treated or created artificially, which is required to be taken care of by industry player through their awareness and information campaigns for their consumers to make them clear about such thoughts they carry about UHT milk to utilize better potential from the market.

TECHNOLOGICAL

First of all because the farmers or Gawala don’t have the means of transportation to deliver the milk up the value chain themselves, and they also don’t have the means to maintain the freshness of the milk (refrigeration) so that the milk retains its actual value. Both issues are related to the availability of appropriate technologies. Technology is, in this case primarily a function of capital. In milk and specially UHT milk industry technology is a critical factor in terms of barriers to entry. Although the market is already saturated, downward pressure on UHT milk prices could be created through either meeting existing capacity, or the establishment of new UHT plants. The downward price pressure would then induce new section of socio-economic cross section to enter the market as consumer of UHT milk. Custom duties on the import of packaging machinery, which is at the heart of the UHT segment of the industry (either TetraPack technology, or alternatives), are prohibitively high. The artificial cap on increase on demand of UHT there fore creates a negative impact on small farmers, who must continue to supply to the informal sector where they are subject to the Gawala. So because being expensive as high capital investments are required for establishing UHT milk plants due to heavy capital cost on machinery this industry is suffering.

1.4 Strategy Development

Strategies are the means to achieving the organization’s stated objectes.(Ref:Hand outs)

The Ansoff Matrix:

As Dairy Queen Milk is in declining stage so I propose in growth strategies the market penetration and product development for Dairy Queen. Because Dairy Queen is in decline.It is not achieving its goals as compared to its objectives.Dairy Queen is a part of a strong brand name Haleeb Foods.It will not take a long time.People are more price sensitive.I propose that Dairy Queen will spend more on advertisements and sales promotions.Because by doing advertisement and sales promotion it can attract more new customers as well as it will retain its potential customers. In sales promotions it will gives the discounts. Dairy Queen will also go for product development becauses people want new things or want change Dairy Queen will come with new products like Dairy Queen Dry milk and Dairy Queen tea milk. It will target there the lower income ,middle income who are price conscious and also the lower upper income level people because there is recession and high inflation in the Pakistan economy so it will attract these people.

LowThe BCG Matrix

High

Low

High

Star

Question Mark

?

Cash Cow

Dog

Market Growth Rate

Dairy Queen Milk lies in Question Marks are high growth and low market share. Low market share often means low profits and weak cash flows because the market is growing faster than the product. So I propose to substantial investment to increase market share. If market shares grown then they can become stars and later cash cows.

Gap Analysis:

The company will use GAP analysis to confirm the gap between the forecast sales and the actual sales. It will choose the market penetration strategy. Because the product is in decline stage so the company will add more features in its product. So that it can achieve its target.

Porter’s Competitive Strategies:

I recommend that the company will choose two strategies one Focus and the second cost leadership. The company will choose focus strategy because it is targeting the middle income level and Lower income level customers. The company will use cost leadership strategy because it is giving low price milk so it is necessary for the company to bear the low cost as company is using pouch packaging for dairy queen which is cheaper than brick packing.

Tactics:

Tactics are measures and techniques that aid the achievement of strategies. Tactics usually include the use and manipulation of the 7Ps:

Product:

I propose that Dairy Queen will provide 1500ml packaging and 2000ml packaging because there are many people who bought milk in large volume specially the juice shops who use milk in milk shakes and the tea shops who use in tea and the colleges and universities canteens. These are the people who use milk in a large volume. Dairy Queen will also provide 160ml packaging because many people who do jobs like helpers in construction business who do not afford and only want one time tea.

I propose that Dairy Queen will provide a good quality milk with a ninety days expiry date because most shopkeepers who buy the milk in bulk prefer the expiry date. Otherwise they can face a loss.

I propose that Dairy Queen will launch dry milk in different packaging. It will give in 100g,180g,250g,375g,500g and 1000g because there are a lot of people who who like dry milk packaging especially in banks,oofices and the passengers during the journing.

I propose that Dairy Queen will provide Special Tea milk because this milk will have the special ingredients for tea and it will catter or attract those people who wank best quality and tasty tea because want change new things.At the start Dairy Queen will provide 250ml and 500ml packaging.

Price:

I propose that Dairy Queen will charge low price according to volume or weight of the milk.It will charge or will give discounts for 1000ml,1500ml and 2000 ml packaging.Because by offering discounts according to the packaging of milk more customers will attract towards this.

Dairy Queen Milk(ml)

Price

160

250

500

1000

1500

2000

Prices for Dry Dairy Queen Milk

Dry Dairy Queen Milk(gm)

Price

100

180

250

375

500

1000

Dairy Queen Tea Mlik

Dairy Queen Tea Mlik(g)

Price

250

500

Place:

I recommend that Dairy Queen will sell on large super stores which has a long chane in Pakistan like METRO PAKISTAN,MACRO PAKISTAN,H Kareem Bakhsh Store and Utility Stores.Becausse a large number of people or households go their for bulk shopping mean they do the shopping for the whole week and sometimes for the whole month. Also small stores will purchase the Dairy Queen from these large stores.

I recommend that Dairy Queen will first determine the demand of the total market. Dairy Queen will divide the market. For example they will put Dairy Queen on the big stores according to their demand. One team of Dairy Queen will cater the colleges and universities canteens. First they will know the demand of them then they will provide. Another team will serve the railway stations and bus stations. Because there are also the canteens and the shops on the railway stations and bus stops.

Promotion:

I recommend that Dairy Queen will use different types of advertisements because it is going to mass production. Now it will not only go to promote the existing product but also the new products.

I propose that Dairy Queen will advertise through TV and Radio because they are catering a big market and they are going to mass production. Through the TV they will create interest in the mind of the customer about the product.And there also some places where the people do not have the TV so through the radio they will catch the mind of the customer.

I propose that they will also advertise t rough the print media leaflets. Specially for the new products like Dairy Queen dry milk and Dairy Queen tea milk. Leaflets should be done on the bus stopes and the railway stations where the passenger move every time.

I recommend that in the big cites like Lahore, Karachi and Islamabad Dairy Queen will advertise through the bill boards because these are the posh areas and people spend a lot on the consumer goods.So by advertising through billboards Dairy queen will click the mind of the customers.

I propose that dairy queen will also promote the product through the sale promotion.Sometimes dairy queen will give free samples on borrowing in bulk.For example if a shopkeeper will buy 10 cartons of dairy queen dairy queen will give free wall clock or a pack of glasses etc.Dairy queen will also give the incentive to the college and universities canteens because they are also purchase in bulk.So dairy queen can give discount in price per carton because by doing this it will motivate the canteen land lord.Sometimes dairy queen can also give like glasses with logo dairy queen.It will create a positive impact in the mind of the owner and also the customer.

I propose that dairy queen will also promote its product through the sponsorships like when sometimes the domestic matches are happen because by doing this they will create social and corporate image.It can also promote through programs like sometimes it can arrange a concert in the colleges and universities by doing this it will create a strong relationship with its customers.

I prose that when it launches its new products like dairy queen dry milk and dairy queen tea milk.It will give the free samples to the people.Dairy queen team will also go to schools,colleges and universities to test free samples.

I propose that Dairy Queen will create a data base through which it will keep in touch like it should now the demand of the big customers like Metro and Macro Stores.Because by doing this it will also negociate for price because big stores will demand for price reduction.

I propose that it will different incentives to their employees like in case of more sale it will give bonuses to their employees and it will give their employees the free medical treatment.

People:

I recommend dairy queen will give training to their employees because employees are the assets of a company. They should have the skills that how to deal with the customers. Because they have an important impact on the growth of the business. Specially the sales persons of a company who are the representative of dairy queen. Their behavior with the customers will be good.

I propose that dairy queen will give certain incentives to their employees to motivate them.They should be given bonuses base on their performances.It should set the target for their employees and it will give the rewards according to the completion of their tasks.Its employees should be professionals.It should give or arrange training programs for their staff.

Process:

I propose that Dairy Queen will provide fast and good service because it is targeting a large market including small and large stores, college and university canteens, railway stations and bus stops. I recommend that Dairy Queen will provide as much more in the market as the demand

I recommend that Dairy Queen will take care the supply of the milk in the market because if the supply will not meet the demand then it is possible that customers dissatisfy with the Dairy Queen and shift to another. There will not be shortage of any packaging and they should be inspection of the raw material which is necessary for the production of UHT milk and Dairy Queen will also take care the quality of the milk.Because if they will not check and balance then it is possible that Dairy Queen expire before which create a negative impact in the customer mind.

Physical Evidance:

I propose that Dairy Queen will be available at small shops and big stores and also the Utility Stores (Stores run by Government). It will be available in utility stores because by selling through utility stores it will be available to more people. Because many low level and middle income level people go to Utility Stores for shopping.

I recommend that Dairy Queen will also sell at college and universities canteens because there are a large number of students in colleges and universities.Pakistan weather is warm so there are eight months of summer so by selling on canteens a lot of sales can be increased.

I propose that Dairy Queen will also sell at Juice shops and tea stalls because mostly people who go for work go to these shops for tea and milk shakes.

I propose that Dairy Queen will also sell at hotels which are there on stations and bus stops because many people go for journey daily.

Action and Implementation: (Marketing Management Handouts)

When a company have been set its marketing strategies and tactics that it becomes necessary to the company to turn them into actions and implementations.

Dairy Queen will use its own marketing staff as well as it will hire or take the responsibilities of SAAM marketing agency.

There are many methods for setting budget

Percentage of sales

Competitive parity

All you can afford

The objective and task method

Arbitrary

Historical

I recommend that the company will choose competitive parity method to make budget for its product. Because Haleeb Foods is a strong company and it has a strong brand portfolio so it will set its budget according to its competitor.

Monitoring and control:

I recommend that the company will choose the monitoring technique to check whether it is achieving its objectives or not. For this the company will do the focus group survey and also the questioners survey to know the perception of the customers about the product. The company will do focus group after every six months and use the questioners’ survey quarterly. Because by doing these surveys the company will be in touch with its customers.

Scheduling of planned marketing activities:

Marketing Activities

Time

Jan,Feb,Mar,Apr,May,Jun

July,Aug,Sep,Oct,Nov,Dec

Responsibility

Budget

(Rs 000)

TV and Radio Advertisement

Personal Selling

Hiring and Training of employees

Sales promotion

Test marketing

Monitoring customer satisfaction

Advertising through print media

Advertising through outdoor media

Direct marketing(Databases)

Sponsorships through games

Sponsorships through concerts

Product launches

Media relations

Publications

Office layout and decorations

1.7 Monitoring and Control:

We use monitoring on going process it means that we divide the whole year into different periods and then check the performance according to our objectives while in control we check the performance yearly.

Q.3ly

a)I have chosen the dairy queen because it was in decline stage. I think the basic reasons for its decline stage is the unawareness about the product it means that mostly people do not have much information about the product because of the less promotion of the product. If people do not have enough knowledge about the product and they do not know the features of the product they will not buy that product. The weak distribution system is also another drawback of the product. The company use their own sales force to supply its product but they are fail to fulfill the demand of the market because the shortage of the product and sometimes shopkeepers are also facing difficulty in providing that product. The packaging of the product is also another drawback because mostly people did not accept the this pouch packaging because they face problems to carry it. The expiry date is also another issue for the decline of the product because customers complain that the product expire before the expiry date and due to this the shopkeepers also face a lot of problems.

Previous Knowledge:

Before Starting Masters in Business Administration I have done bachelor in commerce.I have studied Marketing in Bachlors but I have not gain a clear idea about the terms.Before MBA I just only Know that what is marketing mix I know only that it contain only four elements product,price,place and promotion. I have only some idea what is it. I do not know that how I can apply these terms. First I only know that product is a physical thing or a brand like coke, ice cream, burger,oil and detergants etc which I can buy from anywhere.And I have some idea about the product life cycle but not so much in detail. In my mind the price is only the money which we pay to buy something. I have not studied before the factors to concern with prices and the strategies for setting the prices. I have idea about the place mix but no so much because In my mind promotion mean was just advertisement and sales promotions

Current Learning, Outcomes and applications:

When I start first module MBA from London School of Business and Finance I have only the general overview about these terms of the marketing mix process. But know it is almost is the end of the first module and I have gained a lot of Knowledge about these terms not only general but also the specific. First I only know that there are only four P’s in marketing mix and only know that what is their meaning. But know I have learned that there are seven elements in marketing mix which are Product, Price Place, Promotion,People,Process and Physical evidence. Product is not only the in physical form but it can also be anything.It can be a service it can be an idea.

Now I have a better knowledge about the branding first I only consider that it is only a symbol or logo which shows only the company importance but it is more than this.There are different benefits of branding for the consumers through it consumer come to know much about the product for example it gives certainty, reliability and reduce the risk and people are so much loyal about the brand.

There are many strategies to set price for new product like Market penetration strategy,market skimming and early recovery strategy.For example if I choose market penetrate strategy for my product first I will choose low price for my product when my product will gain an increase in market share I will increase the price.

In place mix I can choose the channel of distribution for my product. There are many factors to choose channel of distribution. For example it depends on the nature of the product.

There are many ways through which I can promote my product. For example I have choose broadcast media TV, print media leaflets and outdoor billboard for advertisement for Dairy Queen milks.

In people mix that they will be skilled and their appearance will be good looking and their behavior. The process mix like company policies, capacity level but not so much. Through physical evidence like Logos,Packagng and equipment etc a company can attract the customers.

Previous Knowledge:

Before starting MBA from LSBF I had idea about the marketing plan but not so much.I had only know that in marketing plan we do SWOT analyses, PEST analysis, BCG matrix ,set budget and finally implement.

Current Learning outcomes and applications:

Now I have clear idea about the marketing plan that how does it work.

A marketing plan is a specification of an organization’s activities and market intentions which gives a direction to a company to the future.

The marketing plan process have following steps.

S=Situation Analyses

O=Objecting setting

S=Strategy Development

T=Tactical Development

A=Action

C=Control

Situation Analyses:

It includes following

SWOT Analysis:

It is helful to a company because by doing this a company able to know about its strengths and weaknesses and also see the opportunities and the threat in the industry in which it is performing.

PESTLE analysis:

It is helpful to a business to understand the macro environment in which the business is running or it want to go.

It helps a business to understand the factors like plotical Government stability and taxation, economical interest rates and the ifflation,social lifestyles and values ,technological technological skills ,legal employment law and envitonment green issues.

Objective setting:

In objective setting a company set that what it want to achieve company has corporate ,business and operation objectives company use a SMART Criteria to set its objectives.

Strategy Development:

It helps company to make strategies for achieving objectives.

Growth Strategies:

The Ansoff matrix:

It helps a company to decide that it will go for expansion or decide to grow.It contains

Market Penetration

Market Development

Product Development

Diversification

The BCG matrix:

It is used by those companies who have a portfolio of different products.

It includes

Stars

Question Mark

Cash Cow

Dogs

Gap Analysis:

It helps a company to compare the actual profits with the forecast profits and finally GAP out the difference.

Porter’s competitive strategies:

It helps a company to decide whether to compete in certain segments or across the entire market or whether to compete through low cost or through differentiated products.

Cost Leadership, Differentiation and Focus.

Tactics:

These are techniques that help a company in the achievement of the strategies.

Actions:

Action helps to turn marketing strategies and tactics into actions.It includes three activities,

Allocating tasks and responsibilities

Scheduling of marketing activities

Setting the marketing budget

Methods for setting budgets:

A company can use any of the following methods for setting its marketing budget.

Percentage of sales

Competitive parity

All you can afford

The objective and task method

Arbitrary

Historical

For example a small company can use All you can afford method.

Monitoring or Control:

It helps a company to sure that the objectives are being achieved according to their plans.

In control we use different methods

Benchmarking

Balanced-scorecard

The Marketing Audit

Profitability control

Sales control

Appreciation

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