1.0 Introduction
Manufacturing is one of the main pillars of Mauritian economy and remains a major foreign exchange earner for the island. Although there has been a shift from manufacturing sector to service sector, the former still plays a vital role in the financial system of the Island and it has contributed to 20.1% of GDP by end of September 2009. As such within this sector, food manufacturing has been growing and it bears significant importance for Mauritius. Despite an increasing competitive environment and the impact of global financial problem within the confectionery market, biscuit market is still alive in Mauritius and worldwide.
With the emergence of globalization process there is cut throat rivalry and it changes the traditional way of doing business. Formally or informally organisations engaged in an enormous number of activities that is known as marketing in business jargon. To make people conscious of products on the market, organisations are increasingly having recourse to marketing whereby there has been a shift from product led strategies to customer led strategies by fulfilling customers’ needs and preferences. Firm must ensure that it produces the right product at the right price using the right promotion and the right distribution method. Nowadays customers prefer to buy from companies whose products do not only satisfy their needs but which also delight them with certain characteristics which are not available to competitors.
Evolving in an aggressive environment where there are pressures from local and foreign challengers, manufacturers of biscuits should choose carefully which marketing mix strategies to adopt so as to be able to differentiate their products and in so doing moving ahead of their rivals. As such marketing managers must continuously monitor customers’ ever changing needs and in turn manage the different components of marketing mix. In this respect concerning this dissertation the main focus will be on Mauritius Biscuit Making Co Ltd (MBMCL) and to analyze the marketing mix of Subana biscuits. The study will also help to find out how far the present marketing mix is effective at MBMCL. It will also evaluate customers’ perceptions, attitudes, behaviours and actions towards components of marketing mix and eventually their level of satisfactions towards the products.
1.1 Problem Statement
MBMCL is still in the growth phase despite having operated for almost 39 years. The sales of biscuits were found to be stable and they were getting difficulties to increase sales with the prevailing economic situation. Furthermore there is also the emergence of imported foreign biscuits on the market. Living in an era dominated by an increasingly turbulent business environment where competition is becoming fiercer than ever makes it more difficult for MBMCL to increase its sales.
1.2 Research Objectives:
- To determine the effectiveness of the adopted marketing mix
- Assessment of customers opinion towards the price of Subana biscuits
- Analysis of the distribution channel adopted for the convenience of customers
- Determine the effectiveness of the promotional mix for Subana biscuits
- Analysing the level of customer satisfaction towards Subana biscuits
- Analyse factors affecting purchase of Subana biscuits
1.3 Project Framework
Chapter 1: Introduction
This section begins with an introductory part to food manufacturing sector comprising of the biscuit market. It further gives an idea of what the project is all about and what are the objectives of this study.
Chapter 2: Literature Review
It covers the 4Ps of marketing mix and shows how they are being relevant for the confectionery products.
Chapter 3: Company Profile and Marketing Mix Strategies of the MBMCL
This chapter describes the company profile on which this study is all about. Moreover, it also gives an overview of biscuit market; revealing how the different components of the marketing mix are present in the product and a SWOT analysis for the company is shown out.
Chapter 4: Research Methodology
This section gives a breakdown of the series of steps in research process, which have been used in gathering data from the sample population.
Chapter 5: Findings and Analysis
This chapter presents discussions and analyses findings of the survey conducted on marketing mix of MBMCL. Even the hypotheses that were developed were tested.
Chapter 6: Discussions and Recommendations
This chapter provides some recommendations based on the results derived from analysis of data that will help the company to improve its products.
Chapter 7: Conclusion
The last chapter gives a final concluding note on whether the objectives have been attained through the survey conducted and stance MBMCL should take.
55
Literature Review Chapter 2
2.1 Part 1-Introducing Marketing
2.1.1 What is marketing?
Today’s marketing is not a function; it is a way of doing business (Zineldin, 2006). Marketing is about how to integrate customer into the design of the product. As such organisations have to work with customers and discover ways to make the business more efficient for themselves and the customers.
There have been several definitions of the term marketing and the most common ones are:
Chartered Institute of Marketing defines marketing as “The management process responsible for identifying, anticipating and satisfying customers requirements profitably”.
American Marketing Association (2007) states: “Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders”.
According to Kotler (2007), “Marketing is about satisfying wants and needs through an exchange process”.
2.1.2 The Marketing Era
In 1950s Scholars argue that marketers should pay more attention to customers’ needs and wants to achieve and maintain successful business relationships. As quoted by Kotler & Keller (2007), instead of ‘hunting’ marketing is ‘gardening’. In this respect marketing concept view customers as ‘king‘ and their needs should be the point of departure for any marketing process.
2.1.3 The Marketing Mix
Marketing mix concept is one of the core concepts of marketing theory, introduced by Jerome McCarthy in 1965. According to Brassington & Pettitt (2003), marketing mix creates an offering for customers. McCarthy and Perreault (1987) defined marketing mix as controllable variables that an organization can coordinate to satisfy its target market. The 4Ps of marketing mix namely Product, Price, Promotion and Place are vital for the success of confectionary products such as biscuits on the market.
2.2 Part 2- Product as a component of Marketing Mix
2.2.1 What is a Product?
Many people believe that a product is a tangible offering but a product can be more than that. Product stands for a physical good that includes intangible services offered prior to, at, or after sale, where the complete package is occasionally referred to as augmented product (Dolan, 1991).
2.2.2 Product Levels for Confectionery Goods
According to Zou et al., 1997, the core product is not the physical goods but instead it is simply the benefits of the product that makes it valuable to consumers. In the case of biscuits the benefit is to satisfy hunger. The actual product is the tangible product which involves organizations branding, added features and benefits to ensure that product offers differential advantage from competitors. For products such as biscuit this level represents mainly the quality of biscuit the customer is getting. The augmented product is the non-physical part of the product that represents added values used by producers or retailers to increase product’s benefits or attractiveness thus exceeding customers’ expectations.
Source: www.marketingteacher.com
2.2.3 Branding
With millions of biscuits on the marketplace all claiming to be the best value for money has led organization using branding as a strategic tool with increasing regularity. American Marketing Association (1960) defines brand as “a name, term, sign, symbol, design or a combination of them intended to identify the goods and services of one seller or a group of sellers and to differentiate them from those of competitors”.
2.2.4 Role of Branding with reference to Confectionery Products
Vrontis (1988) believes that branding is particularly important as people choose brands in the same way they choose friends. Key responsibilities of branding in confectionery market are cited as follows:
- The idea of branding is basically to build the product’s image (Cleary, 1981). Consumers assess identical biscuits in different ways depending on how they are branded. They review whether brands like Bakers, United Biscuits, LU, Arnotts and so on satisfy their needs or not. As consumers’ lives become more complex, rushed and time-starved, the aptitude of a brand to simplify decision making and trimmed down risk is invaluable. Montgomery and Wernerfelt (1992) suggest that brands help reduce hazards consumers face when buying confectionery products that they know little about.
- According to Ginden (1993) once customers have become familiar to a brand they do not readily accept substitutes. Branding is also a method to erect sustainable differential gain by playing on the nature of human beings since only humans can attach meaning and feeling to inanimate objects or random collection of symbols, which suggests the appeal of branding, is not entirely rational (O’Malley, 1991).
- Organisation develops brand as a technique to attract and keep customers by promoting value, image, prestige or lifestyle. Brand corresponds to enormously valuable pieces of legal property that can influence consumers’ behaviours. Hence by using a particular brand, consumer can cement positive image (Ginden, 1993). For instance “Munchy” is viewed as Malaysia number one home grown biscuit brand.
Consequently brands offer numerous benefits to both customers and firms. However according to Chaudhuri (2000) for low involvement products such as biscuits consumers may not search extensively for information about different brands, evaluating their characteristics and make a decision on which brand to buy.
2.2.5 Packaging
In today’s global marketplace the role of packaging becomes ever more vital especially in food industry and its basic function is to safeguard product integrity by shielding the actual product against potential damage from climate, bacteriological and hazards (Stewart, 1995). Nancarrow et al., (1998) suggest that food products use a range of packaging attributes combining colours, shapes, symbols and messages. This attracts and sustains attention and helping consumers identify with the images presented.
The importance of packaging design and the use of packaging as a vehicle for communication are growing (Rettie and Brewer, 2000). According Silayoi and Speece (2004) for low involvement product the package is the product because impressions formed during initial contact can have lasting impacts.
Packaging strongly influences the perceived appearance of a product (Hummel et al., 2003). Research further suggests that perceived physical appearance affect consumers’ expectations of liking for a food product (Hurling and Shepherd, 2003). One recent study by Connolly and Davidson (1996) estimated that 73% of purchase decisions are made at the point of sale. As such the package becomes a critical factor in consumer decision making process because it communicates to consumers at the time they are actually deciding in the outlets.
2.2.6 Positioning
Positioning has evolved from market segmentation, targeting and market structure changes during 1960s and early 1970s (Shekar, 1989). The concept of positioning was strongly advanced by Ries and Trout (2001). They stated that many products already have a distinctive position in the mind of customers and these positions are very difficult to dislodge. For example “Parle” biscuits positioned as a value for price product and it has an image that generates respect and belief of good quality in the minds of buyers. In this respect Dovel (1990) contends that positioning should not be just a part of the strategy of an organization but it should be the backbone of business plan.
2.2.7 Product Life Cycle
As coins by Hofer (1975) the most fundamental variable in determining an appropriate strategy is the phase of product life cycle as it has distinct attributes that offset the operation of a business and consequently marketing programs. To be successful in food market, managing PLC is crucial (www.infor.com). Brassington (2003) states that PLC acts as a useful guide for product’s achievement and where it is heading in the future.
Perhaps the most important stage of PLC happens before the graph starts known as Research and Development phase. Marketing effort is centered on identifying market needs and specific product characteristics (Levit, 1965; Cunningham, 1974; Wasson, 1974; Enis et al., 1977). The product is generally unknown in Introduction phase. Firms spend heavily on marketing expenditure. Afterwards, there is growing market acceptance in Growth phase. Hence marketing endeavor is towards efficient distribution and to guarantee that a workable version of the product is available in adequate volume (Cunnongham, 1974). Then there is Maturity stage where rate of sales growth slows down as the product has been widely distributed and sold. Eventually demand and sales fall off in Decline phase and marketing manager would either harvest the product or reposition it so as to rejuvenate the product.
2.2.8 Summary
Therefore it is evident that a product has different elements that must be monitored carefully so as to ensure that the product is successful over its life cycle.
2.3 Part 3-Pricing as a controllable element of Marketing Mix
2.3.1 Pricing
In accordance with Marsh (1988), pricing is a very important element of marketing mix for it is the only one which produces revenue while all other parts of marketing mix are cost driven. Tull and Kahle (1990) describes price as amount charged for the product including any warranties, guarantees, delivery, discounts, services or other firms or other items that are part of the conditions of sale and are paid for separately.
From the perspective of Wilson and Gilligan (1997), price is potentially the most controllable elements in marketing mix. Moreover it is to be noted that price is generally viewed differently. Kurtz and Clow (1988) suggest that consumers often use price as one of the inputs into forming expectations when they are making purchase decisions while Urbany (2001) argues that pricing decisions determine the value for customers and plays vital role in building an image for the company.
2.3.2 Relationship between Price and Quality
Research has attempted to verify whether buyers perceive positive relationship between price and quality. On first hand Zeithaml (1998) suggests that higher price signal higher quality and price denote the sacrifice consumers must make to obtain the product. However Jacoby et al., (1971) suggest that consumer expertise or familiarity may mediate the effect of price on perceptions of quality. To support this idea, Rao and Morroe (1998) suggest that novice or unfamiliar buyers tend to use price as an indicator of quality to greater extent than expert or familiar buyers.
2.3.3 Factors affecting Price of Confectionery Products
Pricing decisions are influenced by internal and external pricing determinants (Shipley and Jobber, 2001). The internal factors are more easily controllable since it refers to the organization itself than the external ones which relate to the market in which the organization operates. The different elements that form part of internal and external factors are shown below:
Source: Hornby and Mc Leod, 1996
2.3.4 Pricing Strategies for Confectionery Products
Research states that two pricing strategies namely Skimming and Penetration are dominant while other pricing strategies are considered to be secondary as they constitute a compromise between the two strategies (Cannon & Morgan, 1991, McCarthy & Perreault, 1993; Rowley, 1997).
Dean (1976) defines skimming as charging relatively high prices. According to Kehagias & Skourtis (2009) this strategy is generally preferred when the company focused on promoting the exclusivity or superiority of its products. To sustain this idea Cavusgil (1996) argues that skimming strategy can be effective for products that address to certain segments that are willing to pay premium price for them. By itself this strategy is appropriate in niche markets and where prices have no influence on consumers.
Penetration Pricing is concerned about charging relatively low prices (Dean, 1976). From the viewpoint of Rowley (1997), the objective of penetration pricing is to gain large market share quickly and Alvontis & Indounas (2005) confirm this idea to further suggest that penetration strategy is more suitable when the company is concentrating on increasing its market share. The idea is that prices should be set low to attract customers as quickly as possible before they are attracted by competitors.
2.3.5 Summary
Thus in the light of what has been said price can mean more to consumer than just a monetary exchange of value. In this respect setting and managing prices are critical elements of the marketing managers’ tasks.
2.4 Part 4-Distribution within Marketing Mix
2.4.1 Place
As a marketing strategy, place also known as physical distribution is concerned with the possession of service that is accessible to customers at the right place and at the right time (Low and Tan, 1995). According to Darling (2001), distribution component mix is a combination of elements such as marketing channel outlets, storage facilities, inventory control and shipping facilities.
2.4.2 Distribution Channels Levels
Channels of distribution can be viewed as social systems comprising a set of interdependent organisations, which perform all activities utilized to move product and its title from production to consumption (Wilkinson, 1996). Within confectionery market, each layer of marketing intermediaries performs some task in bringing the product to its final buyer. The pictorial representation for different channel levels is shown below.
Zero Level
One Level
Two Levels
Source: David Jobber, 1995
2.4.3 Function of Distribution Channel for Confectionery Products
As proposed by Wilkinson (1996), Distribution channel is of fundamental importance to the treatment of physical distribution because the channel is the area within which marketing and logistics culminate into consumer transactions. Organisations in the confectionery market that form any particular distribution channel execute countless key functions which are summarized in the table below.
|
Information |
Gathering and distributing market research and intelligence which help in marketing planning |
|
Promotion |
Developing and spreading communications about offers |
|
Contact |
Finding and communicating with prospective buyers |
|
Matching |
Adjusting the offer to fit a buyer’s needs, including grading, assembling and packaging |
|
Negotiation |
Reaching agreement on price and other terms of the offer |
|
Physical Distribution |
Transporting and storing goods |
|
Financing |
Acquiring and using funds to cover the costs of the distribution channel |
|
Risk Taking |
Assuming some commercial risks by operating the channel |
Source: www.tutor2u.net
2.4.4 Distribution Intensity
Manufacturers increasingly rely on distributors for distribution and marketing activities (Merrit & Newell, 2001). Depending upon the category of product there are three broad options for the mode of distribution.
Intensive Distribution aims at maximum market coverage. According to Lamb et al., (2008), manufacturers of snack foods try to have their products available in every outlet where potential customers may want to buy it. Another method as stated by Lamb et al., (2008) is Selective Distribution that often hinges on a manufacturer’s desire to maintain a superior product image so as to be able to charge a premium price. Thirdly, Exclusive Distribution which is the most restrictive form of market coverage entails only one or few dealers within a given area. As coined by Lamb et al., (2008), it usually confines to consumer speciality goods, a few shopping goods and major industrial equipment.
2.4.5 Summary
Taking into consideration the dynamic environment manufacturers must recognize the importance of reaching consumers wherever they shop. As such manufacturers of confectionery products must choose the proper distribution channel to ensure that the product is easily accessible to customers wherever they want it.
2.5 Part 5: Promotional Mix within the Marketing Mix
2.5.1 Marketing Communication Mix
Marketing communication mix is the combination of different promotional message involving an appropriate selection from a range of tools (Rowley, 1998). In a world of fierce competition it is not good enough to have the best product sold at attractive prices. Dibb et al., 1994 acknowledge that promotional mix also refers as marketing communication mix has a key role to play in the marketing success of a product.
Source: www.davedolak.com
2.5.2 Advertising
Advertising represents an important means by which organisations communicate with current and potential customers. As per Kotler & Keller (2007) advertising is defined as “any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.”
According to Bendixen (1993), the specific objectives of an advertising campaign for food markets may adopt many forms such as:
Ø Create awareness of new product or brand
Ø Inform customers of features and benefits of the product or brand
Ø Create desired perceptions of the product or brand
Ø Create a preference for the product or brand
Ø Persuade customers to purchase the product or brand
A number of reviews suggest that food advertising leads to greater preferences and purchase of the product advertised (Hasting et al., 2003; Story & French, 2004). As put forward by Loewensensten, (1996); Metacalfe & Mischel, (1999), food advertising typically focuses on the immediate sensory gratifications of consumption making resistance to these messages even more difficult. In line with this, Folta et al., 2006; Harrison & Mischel, (1999) proposed that messages presented in food advertising have the power to act as real-world primes and led to corresponding eating behaviours.
2.5.3 Medium of advertisement
Spawton (1991) suggests that advertising is considered as an investment as it makes use of paid media to communicate one’s messages. Today’s consumers have ready access to wide variety of media channels from printed media to electronic media. This can be enumerated under three categories as show below:
Advertising Medium |
||
|
Printed Advertising -Newspaper -Magazines -Brochures |
Broadcast Advertising -Television -Radio -Internet |
Outdoor Advertising -Billboards |
2.5.4 Sales Promotion
Sales promotion is the offer of an incentive to induce a desired sales result (Gilbert, 1999). It consists of a wide variety of short term tactical promotional tools aimed at generating desired response from customers. According to Peattie and Peattie (1994), sales promotion fall into two categories namely value increasing and value adding. In line with www.tutor2u.net it has been explained as trade promotion which is directed towards retailers or wholesalers and consumer promotion that is directed towards end users.
Source: Smith and Taylor, 2004
55
Literature Review Chapter 2
However there is no consensus among researchers that sales promotions lead to repeat purchase. Studies from Ehrenberg et al., 1994 reveal that customers who take advantage of price promotion often return to their favourite brands. Nevertheless price promotions still can result in a short term increase in sales (Smith & Sinha, 2000).
2.5.5 Direct Marketing
UK Direct Marketing Association defines Direct Marketing as communications where direct contact is made or invited between a company and its existing or perspective customers and results are measured to assess return on investment. Direct marketing today necessitates entering and maintaining relationship with customer (Sally, 2008). Moreover according to Irene (2004) through direct marketing, marketers have exploited every channel in an attempt to influence the customer into buying their products. The most common channels used are direct mail, telemarketing, leaflets drops and inserts in magazine. Consequently Di Talamo (1994) suggests that direct marketing is viewed as the best tool to help small and medium sized companies protect themselves from big firms with massive advertising budgets.
2.5.6 Public Relation
Moore and Kalupa (1985) believe that PR is an indispensable management element required by firms in today’s turbulent environment. PR includes various facet of communication which relates to the establishment and improvement of goodwill between a firm and its various public with which it seeks to communicate (Yeshin, 2003). As such PR is very important in food industry as it allows a company to handle successfully negative attention. Copley (2004) further states that PR activities often have greater credibility with target groups. For example an article in business pages of a newspaper about the impact of new legislation on food will no doubt be seen in a different light because it is an editorial rather than coming from the organization in a partisan way.
2.5.7 Personal Selling
Brooksbank (1995) points out that personal selling is a critical component of marketing success. Personal selling can be defined as the personal communication of information to persuade prospective customers to buy something (Futrell, 1992). It requires a sale force that will interact with the ultimate customers. Johnston and Marshall (2003) suggest that personal selling messages have potential to be persuasive due to the face to face communication with customers. Consequently Brooksbank (1995) states that the role of personal selling will continue to be of overwhelming importance in the case of those companies operating in markets characterized by high volume customized goods and services with relatively long and complex decision making process as opposed to confectionery products such as biscuits.
2.5.8 Summary
It is found that a product cannot be successful on the market without proper elements of the marketing communication mix. As such there are different tools that an organization can make use of so as to inform the customers about the product.
55
Company Profile Chapter 3
3.0 Introduction
This chapter aims at establishing biscuit as a product that fall in the category of confectionery product. Additional emphasis is being elaborated on biscuit market and its consumption in Mauritius. As such this section also introduces the company on which the study is wholly devoted, its adopted marketing mix strategies and results of SWOT analysis for the particular organisation are noted down.
3.1 Biscuit as a Confectionery Product
According to National Conference on Biscuits Industry held on 13th March 2008, biscuit is a product that can be used by all on several occasions. It is made under stringent food quality, safety, packaging laws and other relevant regulations as specified by the government. Biscuits are example of popular and cheap confectionery with worldwide consumption and their versatility and variety have endeared them to millions of people (www.worldbakers.com). Biscuit is a good appetizer that is served in various occasions and it is available in different shapes and flavours that satisfy people of all age groups.
3.2 Overview of Biscuit Market and Consumption in Mauritius
The food industry is facing growing challenge over the years. Indeed food remains an important element in sustaining life. From Household Budget Survey conducted by Central Statistical Office to study consumption pattern of the Mauritian population, food and beverages occupy an important position in it. It has also been found that biscuits accounted for the largest sector in terms of sales in the whole food and beverages market.
Biscuits in general enjoy high level of popularity among Mauritian consumers, being purchased by nearly 92% of Mauritian families in recent years. Popular brand of biscuits in Mauritius are LU, Arnotts, Hup Seng, Subana, Esko and Bakers amongst others. From 2008 till end of September 2009, Mauritian biscuit market was valued around Rs 401 million. Both locally made biscuits and imported ones are available on the market. However recent trends have shown that imported biscuit superseded the volume of exported biscuits. (Refer to Appendix F for yearly detailed Imported and Exported value of biscuits)
2006 |
2007 |
2008 |
2009 (Till end September) |
|
Export (Rs.) |
6, 987, 750 |
13, 639, 438 |
11, 247, 845 |
5, 625, 333 |
Imports (Rs.) |
116, 610,298 |
157, 922, 354 |
196, 362, 163 |
188, 272, 282 |
Source: http://www.gov.mu/portal/site/cso
3.3 Background of Mauritius Biscuit Making Co Limited (MBMCL)
In 1970 the island of Mauritius saw the establishment of MBMCL. The Company is widely recognized by its brand name ‘SUBANA’, whereby all its biscuits are marketed under that particular name. The mission statement of MBMCL is to produce quality biscuits for local and international market.
MBMCL started its commercial operation as from 1971 and the sole existing industry was at the head office located at Bell Village. In August 1971, the very first Subana biscuits were manufactured and marketing began as from November 1971 with a humble production of 1 ton per day. Gradually following a rise in demand for Subana biscuits, the organization expanded itself leading to an increase in its production capacity that of 4 tons daily in 1976, followed by 5 tons per day in 1982 and it kept on increasing. In this view a new plant was installed at Pailles in 1995. This new plant was specialised in salty biscuits, with a production capacity of 5 tons per day.
Over the years MBMCL has progressed and in 2003 Subana biscuits were ISO 9001:2000 certified. Currently with advancement in technology, MBMCL make use of fully automatic machines coming from United Kingdom, Italy and Austria. As a result this enables the organization to manufacture more than 15 tons of biscuits in different varieties per shift per day. MBMCL carry out its manufacturing process with immense care and in a clean environment in accordance with European standards. From time to time the services of renowned consultant are hired by MBMCL to further improve the quality of Subana biscuits. MBMCL take into consideration ethical values of consumer whereby its products are exclusively vegetarian oriented and they do not use any animal base ingredients.
With the ever changing tastes of consumers, MBMCL has a product range that covers more than 40 varieties (Refer to Appendix A for the different Subana biscuits). Although the main product of MBMCL is biscuit, they also manufacture Ice Cream Cones, Cookies and Chocolates products. Consequently MBMCL is found to be the largest biscuit company on the island with spare capacity of approximately 40% which can be easily used to meet export demand. It currently exports its products to Reunion Island, Madagascar, Seychelles, Comores, Kenya, Singapore, Uganda, Congo and South Africa.
3.4 The Marketing Mix Strategies at Mauritius Biscuits Making Co Ltd
An informal interview was conducted with the personnel of MBMCL to have an overview of the marketing mix strategies that it implements whereby the different components of the marketing mix were analysed.
3.4.1 Product
MBMCL produces a wide variety of biscuits to cater for different tastes of customers. Currently MBMCL’s biscuits are situated in the growth phase of product life cycle according to the personnel of the organization. Biscuits are classified as non durable goods that are consumed in one or few uses. The core product at MBMCL is biscuits and as such the customer purchase biscuits to satisfy his/her hunger. The second level that is present is the actual product whereby customers are looking for quality biscuits.
3.4.2 Branding
Biscuits at MBMCL are marketed under the brand name of Subana. The company and its products are mostly known by this specific name. The pictorial representation of the brand Subana is as follows:
As such the brand name Subana helps MBMCL to have a competitive edge on the market as it promotes the image and goodwill of the biscuits in the mind of customers.
3.4.3 Packaging
Accordingly packaging is seen to play a major role in protecting the biscuits. In the beginning MBMCL used cellophane wraps as a means of packaging. However with passage of time it was found to be ineffective as biscuits were not remaining fresh for a long period of time. As a result MBMCL introduce laminated aluminum foil which helps in preserving the freshness of the biscuits. All biscuits are packed into attractive wrappers. Furthermore some biscuits such as ‘Jam Rings’, ‘Jax’, ‘Quix’, ‘Give Me More’ amongst others are packed into aluminum foil and then inserted into striking boxes.
3.4.4 Segmentation
MBMCL caters for different segments. It makes use of demographic bases whereby it produces biscuits for different age group. The organization also use behavioural variable as a base by producing biscuits for particular occasions such as the savories biscuits are usually meant for end of year festivals, parties or simply refreshments.
3.4.5 Targeting
MBMCL targets different categories of people. It targets ‘sweet biscuits‘ at babies and small children mostly. Furthermore it also targets youngsters and adults too. And it does not ignore the elder population as it provides a diabetic biscuit especially where people are very health conscious.
3.4.6 Positioning
MBMCL positions Subana biscuits as ”Une Manque de Qualite”. This positioning statement is universal for all biscuits that are operated under the brand name of Subana.
3.4.7 Price
Subana biscuits being low involvement products are priced according to penetration strategies. Most biscuits are priced between Rs10 and Rs40. This strategy was adopted since their aims are to increase sales volume and win market share vis-a-vis competitors.
3.4.8 Place
MBMCL adopt intensive strategies for its biscuits so as to ensure that its products are widely available everywhere and thus close to customers. Afterwards it is also to be noted that MBMCL make use of different channel levels. MBMCL uses zero channel level whereby it sells directly to the end users via the factory shop. It also adopts two levels strategy by dealing with all the wholesalers and retailers who hold a license in this particular business.
3.4.9 Promotional Mix
MBMCL make use of promotional mix tool with a view of increasing sales and create awareness of its biscuits. The personnel of MBMCL suggested that sales promotion and advertising were the predominant ones among the different tools. The sales promotion mostly covers ‘Bonus Pack’ or ‘Free Sample’ generally in supermarkets and hypermarkets. Afterwards MBMCL also make use of advertising by using radio, television and newspaper as the medium of communication.
3.4.10 Marketing Approach
MBMCL is considered as pro-active to customer demand in order to satisfy each and every taste of the different consumers. The organization applied the marketing concept whereby customers are placed at the center of every process to deliver the ultimate output. It also respects different ethnic groups and its biscuits are free from animal’s fat and this is published on the wall of the organisation. Nowadays with the concept of “Maurice-L’ile Durable” enacted by Government of Mauritius, MBMCL ensures that its production process does not harm the environment. As such it ensures that societal marketing concept is respected when manufacturing biscuits so as to maintain the sustainability of the nature.
3.5 SWOT Analysis at Mauritius Biscuit Making Co Ltd
SWOT is an acronym for a company’s strengths, weaknesses, opportunities and threats. The SWOT analysis conducted for MBMCL underscores the basic point that strategy must produce a good fit between a company’s internal capability and its external situation (The full detail of the SWOT Questionnaire can be viewed in Appendix B). The results of the questionnaire can be summarised as follows.
Strengths§ Brand name ‘Subana’ § Leading manufacturer § High market share § ISO Certified § Highly automated machines |
Weaknesses§ No marketing team § Lack of Research & Development programs |
Opportunities§ New Segments e.g. diabetic |
Threats§ Increasing number of competitors § Economic crisis |
Table 3.2: Results of SWOT Analysis
By itself it is evident that there are some major drawbacks that impact negatively on the organization and this SWOT analysis will help MBMCL to work out the weaknesses and threats that they are facing. (Refer to Appendix C for a detail SWOT analysis)
3.6 Summary
After gaining an insight of the organization and its marketing mix the next chapter will deal about how the survey will be carried out.
55
Research Methodology Chapter 4
4.0 Introduction
Marketing research has always played a valuable role in providing a significant proportion of facts and information. According to Aaker and Day (1991), marketing research is the specification, gathering, analyzing and interpretation of data by management about its environment, with the goal of better understanding that environment and developing and evaluating courses of marketing actions. This chapter will elaborate on the steps of the research process for the study at MBMCL.
4.1 Research Process
This involves identifying a management problem, dilemma or opportunity, translating that problem or opportunity into a research problem and collecting, analyzing and reporting the information specified in the research problem. As such when designing the research project there is a sequence of steps which can be followed.
Source: Gilbert A. Churchill, 1988
55
Research Methodology Chapter 4
4.2 Formulate Problem
The starting point consists of defining and exposing the problem carefully. An old motto says, “A problem well defined is half solved”. Hence problem definition is the most critical part of research process.
MBMCL has a stable sale and it is unable to increase sales volume especially in the current economic situation. Above all for the past 39 years MBMCL has been operating in Mauritius and it is still in the growth phase. MBMCL is also facing threat from competitors of not only local manufacturers but also foreign ones. It is therefore, extremely important to assess the marketing mix and identify the pitfalls that MBMCL can improve.
Hence the main aim of this survey is to evaluate effectiveness of the marketing mix adopted by MBMCL. Furthermore greater emphasis has been laid on the study to identify the following objectives:
- To determine the effectiveness of the adopted marketing mix
- Assessment of customers opinion towards the price of Subana biscuits
- Analysis of the distribution channel adopted for the convenience of customers
- Determine the effectiveness of the promotional mix for Subana biscuits
- Analysing the level of customer satisfaction towards Subana biscuits
- Analyse factors affecting purchase of Subana biscuits
This study will at the same time help MBMCL to identify weak areas of the company’s product and thus solutions could be sought to make it more competitive as well as providing rooms for improvement for its biscuits.
4.3 Hypotheses Development
As pointed out by Boyd et al.,(1996), hypotheses are usually drawn from ideas developed or glimpsed in previous research studies or are derived from theory. A hypothesis is therefore a statement that specifies how two or more measurable variables are related.
Hypothesis 1
H0: There is no significant relationship between price and quality of Subana biscuits.
H1: There is a significant relationship between price and quality of the Subana biscuits.
Hypothesis 2
H0: There is no significant relationship between price and level of satisfaction towards Subana biscuits.
H1: There is a significant relationship between price and level of satisfaction towards Subana biscuits.
4.4 Determine the Research Design
As stated by Malhotra and Birks (2005), Research Design is a framework or blueprint for conducting a marketing research project. It is the basic plan that guides data collection and analysis phases of the research project. The chosen style of research activities consisted both of qualitative which is in the form of an unstructured interview and quantitative research activities in the form of questionnaires. But still the choice of research design depends on how much is known about the problem. If relatively little is known about the issue to be investigated, exploratory research is needed. Nevertheless if a problem is precisely formulated then descriptive or causal research will be more appropriate.
4.4.1 Exploratory Research
Generally exploratory research is characterized by a high degree of flexibility with respect to the methods used for gaining insight of broad or vague problem. Boyd et al., (1996) stated that exploratory research seeks to discover new relationships.
For the purpose of this research project an exploratory research was first used. It involves the study of secondary data and a one-on-one structured personal interview was carried out with the personnel of MBMCL (The questions of the interview can be viewed in a questionnaire found in Appendix D). Afterwards with a precise and unambiguous nature of the project, conclusive research was adopted.
4.4.2 Conclusive Research
It is design to provide information that helps to evaluate alternative courses of action. As per Boyd et al., (1996), conclusive research provides information that helps the executives make rational decisions. Conclusive research is further broken down into descriptive and causal research.
Descriptive research provides a complete and accurate description of the subject matter under investigation. It is designed to describe variables in the problem model without establishing association between factors.
Causal research is concerned with determining cause and effect relationships between variables. As such, it was intended to test the cause and effect relationships established in hypotheses development section.
4.5 Determine Data Collection Method
This phase calls for developing the most efficient plan to gather the needed information. The data that an organization needs to solve its problem exists in two forms. Secondary data which needs to be collected first refers to data that has already been assembled for some other purposes. For this study secondary facts were gathered from CSO publication, academic journals, textbooks and internet which in turn help in gaining new insights and better understanding of the topic. Afterwards primary data were collected with a view to help solve the current problem. Primary data can generally be collected via experimentation, observation and survey research. For this purpose the last approach was used namely survey since it enables researchers to learn about people’s knowledge, beliefs, preferences and satisfaction and to measure magnitudes in the general population (Kotler, 2001).
4.6 Design Data Collection Forms
In the survey method questionnaire is thought to be a suitable and practical instrument to collect data. Proctor (1997) states that questionnaire is a simple data collection instrument that formally sets out the way in which research questions are asked. The preference of using questionnaire is due to the fact that it generates quantitative data and it can be analyzed more scientifically as compared to qualitative data. Furthermore emphasis was laid to provide disparity in ways questions were set in order to evade unnecessary boredom from respondents. In this respect the questionnaire was designed to suit an acceptable time frame of 10 minutes for administering purposes.
4.6.1 Structure of the Questionnaire
The questionnaire is divided into two sections, namely Section A and Section B. The questionnaire consists of close-ended questions which are further broken down into dichotomous questions which generate short answers and likert scale questions are used to measure attitudes, preferences and subjective issues where respondents are asked to rate the level at which they agree or disagree with a statement. The questionnaire also consists of open ended questions which are particularly useful in exploratory research where new ideas and relationships are sought. These types of questions also enable respondents to express their views freely.
Section A relates to the research objectives of the undertaken study. This particular section consists of 29 questions that relate largely to the 4Ps of marketing mix of Subana biscuits. On the other hand Section B deals with demographic information of the respondents. The final questionnaire with its covering letter can be viewed in Appendix E.
4.6.2 Pre-Testing of Questionnaire
When questionnaires have been drafted, very often they may contain some questions that are ambivalent, cumbersome or vague. Therefore this call for a pretest among some selected respondents that are representative of the sample population. Proctor (1997) suggests that pretest is a means of discovering the faults in the questionnaire before it is administered.
For this study a pilot testing was made among eight respondents. Six of them formed part of working population and the remaining two were dispatched to shopkeepers. From there onwards amendments were made to question No9, which relates to the rating of different brands of biscuits with respect to price and brand attributes. However respondents were confused with the rating for the two different attributes especially the rating of “Poor” concerning pricing. To overcome this confusion this question were broken into two different questions whereby the rating scale was modified for each attributes.
4.7 Design Sample and Collect Data
Since populations of interest are generally too large to work with directly, techniques of statistics sampling have been devised to obtain samples taken from a large population. According to Churchill (1996) a sample is a selection of elements from a larger group of objects. The different steps that need to be followed in developing a sample are shown below.
Source: Proctor, 1997
Define the Target Population: It is very critical if the study is to be significant and by itself the target population is defined in terms of elements, unit and time.
Develop a Sample Frame: This refers to a means of access to the population to be surveyed which in this particular case comprises of working population since they have purchasing power as they earn an income.
Selecting a Sample Design: This deals with the way respondents are being chosen. There are two major types of sampling methods namely probability and non-probability sampling. In carrying out this survey probability sampling was used as each population element has a known non-zero chance of being included in the sample. More specifically stratified random sample was selected which involves division of sampling frame into defined strata which are mutually exclusive. A list of working population was drawn from different age group and afterwards a simple random sample was selected within each group.
Determining Appropriate Sample Size: According to Proctor (1997), sample size determination can be based on intuition, statistical precision, cost limitation and industry standards. In this case cost limitation option was chosen in making the selection for sample size which equal to 150 respondents. The table below shows how the questionnaires were administered.
Age Group |
No. of People Targeted |
No of selected people |
|
18-25 |
60 |
45 |
|
26-35 |
40 |
33 |
|
36-45 |
50 |
39 |
|
46-55 |
30 |
23 |
|
55 and above |
15 |
10 |
TOTAL |
195 |
150 |
4.8 Data Collection
The survey was carried out from December 2009 till end of February 2010 and all questionnaires were collected individually to ensure that the latter were properly filled. However out of 150 questionnaires only 100 questionnaires were gathered.
4.9 Analyse and Interprete the Data
After having gathered all relevant information a pile of data will be available. The collected data in turn needs to be analysed and the results interpreted with respect to the problem at hand. This step is carried out via different techniques.
4.9.1 Editing
The function of editing for this project is to make the best logic out of what is in hand. Editing also helps to get rid of the inconsistencies and thereby improve the quality of raw data.
4.9.2 Coding
This involves assigning numbers to represent each reply to a question on a questionnaire. Coding also assist in translating answers into a more readily countable form on the computer. For instance from the first question about whether the respondent consume biscuits, code 1 was assigned for Yes and code 2 for No.
4.9.3 Tabulation
It is about an orderly arrangement of data in a table by counting the frequency of responses to each question. Tabulation being an inexpensive operation was in turn analysed by using Statistical Package for Social Sciences (SPSS) version 12.0 and charts were drawn up by using Microsoft Office Excel 2007. Via SPSS software, relationships about different variables could be established in terms of means, standard deviation, paired sample tests and paired sample correlation. Chi square tests were used to assess the hypothesis which consisted of three steps namely: cross tabulation of the two variables, then assessing Pearson asymptotic significance value and eventually determining the strength of relationship via Cramer’s V.
4.10 Prepare the Research Report
The final step in the research process is to present the findings graphically with written explanations. The findings concerning marketing mix of Subana biscuits are presented in the research report.
4.11 Limitations of the Survey
As quoted by Elbert Hubbard, “Genius does have limitations” and this is no exception with this study. During the survey some difficulties were encountered which may have influenced the findings in one way or another.
Ä By using questionnaire there is no guarantee that respondents answer honestly.
Ä Due to time and financial constraints only 150 questionnaires were administered.
Ä Some people were not willing to cooperate to fill in the questionnaire because either they happened to be very busy or simply were not motivated.
Ä There was a need to spend time in convincing some people who were either reluctant or unwilling to participate in the survey.
Ä Some respondents modify their answers to earlier questions when they find that they are contradicting themselves while answering some later questions. Therefore, their responses may not remain true, factual, honest and original.
4.12 Summary
The proposed research methodology has been implemented while analyzing the marketing mix of Subana biscuits. Numerous limitations have cropped up but constructive measures were taken to avoid them. As far as possible risks of bias has been minimized so as to ensure greater objectivity.
55
Findings and Analysis Chapter 5
5.0 Introduction
This chapter deals with presentation of findings and a detailed analysis of each question in the survey that was carried out among a sample size of 150 respondents out of which only 100 questionnaires were filled. The analysis is carried out into three parts whereby demographic profile are analysed first and then Section A of the questionnaire accompanied by hypothesis testing.
5.1 Part A: Finding of Demographic Profile
Gender
According to Figure5.1 male capture a larger slice of the pie chart with 59% compared to 41% of that of female.
Residential Area
65% of respondents were from a rural region and 74% of respondents were from the urban area as far as information pertaining to geographical location of the respondents is concerned.
Findings and Analysis Chapter 5
Age Group
Youngsters were predominated with an amount of 35% respondents while those aged between 26-35 represented 24% of the sample size. 19% fall in the age group of 36-45 which generally appears to be head of nuclear family while 13% respondents were between 46-55. Last but not least, age group 55 and above represented 9% of the sample size.
Marital Status
A majority of respondents which equaled to 47% were married with children as compared to 22% who were married without children. The category single amounted to 29% while widowed/divorced/separated represented 2% of the sample.
Monthly Income
Concerning the level of income of respondents, it has been found that 30% respondents earn between Rs 10 001- Rs 12 000. 24% respondents received between Rs 14 001 and above while those earning between Rs 12 000-Rs 14 000 accounted for 17% of the population. Also noted is that 8% of respondent earned less than 8%. Finally those who earn Rs 8 000-Rs 10 000 represents 21% of the sample population.
5.2 Part B: Findings on Subana biscuits
Do you consume biscuits?
100% respondents consume biscuits and as such reveal that within food sector, biscuits are products that have a high consumption rate among Mauritian population. Biscuits are thus consumed by many people of varying age group.
When do you prefer to eat biscuits?
Figure 5.7 shows that most respondents which amounted to 34% eat biscuits at random indicating that they don’t have a fixed time to consume biscuits. While it also found that 32% of respondents prefered to eat biscuit in the morning as their breakfast. Tea time consumption of biscuits totalled to 26% of the sampled population while only 8% eat biscuits at night, thus indicating the time at which the products were being least consumed.
Which type of biscuit do you prefer?
At the outset it can be deduced that 82% respondents prefered both biscuits that are locally made and even the foreign ones. In contrast only a minority of 7% favoured just locally made biscuits indicating that those people prefer local products while 11% prefered foreign biscuits only.
Have you ever heard of Subana biscuits?
Data collected shows that 100% of the sample have heard about Subana biscuits thereby implicating that this biscuit is widely recognised and is popular among Mauritian population.
Do you buy Subana biscuits?
As illustrated by the diagram 100% of the respondents purchased Subana biscuits. This in turn indicates that Subana biscuit is a product that is bought by many people among the working population.
What motivates you to buy Subana biscuits?
As per the above findings price and taste are the two dominant factors with a percentage of 37% and 28% respectively that motivate a person to buy Subana biscuits. At the same time respondents were also inspired by brand name Subana which accounts for 11%. Packaging that was seen to play a major role in literature review contributes to only 8% while those motivated by quality of Subana biscuits amounted to 6%. The 10% responses that were obtained for others comprised of availabilty of the product, past experiences and word of mouth.
How often do you buy Subana biscuits?
It is found that there is not a single respondent that have never bought Subana biscuit thus revealing that the product is purchased in almost every household. Nevertheless there is a variation in the frequency of purchase. 34% purchased the product occasionally while 28% regularly bought Subana biscuits. However 29% rarely buy Subana biscuits which is not really a good sign while only 9% purchased the biscuit very often.
What types of Subana biscuits do you like the most?
Among the wide variety of Subana biscuits respondents have a preference for salty and creamy biscuits that matched up to 30% and 29% respectively. And it is actually the two categories where there are most variety of biscuits. Wafers are appreciated by 19% of respondents while for cookies it accounts to 14%. Savories being seasonal biscuits are liked by only 8%.
Paired Sample Test for Purchase of Subana biscuits (Q5) and the frequency of buying Subana biscuits (Q8)
By carrying out a paired sample statistics for Question No 5 & No 8 it is found that pvalue is 0.000. Since it is less than 5% (0.05) it indicates that there is no statistically significant association between those who purchase Subana biscuits and their frequency of buying.
Rating the following brands of biscuits on their Quality attributes
On quality attributes Subana biscuit has a high ranking as a fair and good biscuit which amounted to 78% (43%+35%). It is also to be noted that Subana biscuits have been tasted by each and every respondents thereby revealing that this biscuits have been consumed by a large population. However in general it is LU that has the highest ranking of a good quality biscuit as stated by 60% respondents while Baker’s have the highest figure of 41% as being very good quality biscuits. Brand such as Peak Freans is the one that many respondents (36%) have never tasted compared to the other brands. It is also higlighted that among locally made biscuits the quality of Subana biscuits are much superior to the others but when comparing on a national basis it is evident that Subana biscuits lag behind in term of quality. On the whole it is found that brands such as LU and Baker’s that enjoy an overall excellent reputation as a good quality biscuit among the population.
Mean Score for quality attributes of the different brands are as follows:
Brands |
Mean Score |
|
Subana |
3.36 |
|
Baker’s |
4.42 |
|
LU |
4.27 |
|
Esko |
3.15 |
|
Arnotts |
4.70 |
|
LKS |
3.23 |
|
Peak Freans |
4.56 |
For the purpose of an in depth analysis the mean values have been represented as Mean1=Very Poor to Mean 5=Very Good. Therefore based on the mean score it is established that brand Arnotts (4.70) enjoy the best quality biscuits in front of Peak Freans with a mean of 4.56. Then there is Baker’s with a score of 4.42 and mean of 4.27 for LU. Hence it can be deduced that the quality of foreign brands are much superior to that of Subana. Nevertheless on a local basis Subana with a mean score of 3.36 is much better than other local brands whose mean score are inferior.
Rating the following brands of biscuits on their Price attributes
As per the chart Subana biscuits are the cheapest brands among the others as coined by almost 62% respondents. This implies that Subana biscuits can be purchased even by the lowest income earners. However it is also found that 58% respondents viewed the price of LU as affordable while at the same time it had a high ranking as a good quality biscuit. Nevertheless it is to be noted that 35% also viewed LU as Expensive. As such this further reveals that LU can also try gain customers on its price basis according to perception of respondents. About 44% also stated Baker’s as affordable while 25% for Arnotts. Hence respondents viewed many of the foreign biscuits as affordable. Furthermore locally made biscuits such as Esko and LKS are also viewed as cheap and affordable to a large extent in line with Subana biscuits. By itself there can be fierce competition on price among these manufacturers and even with the foreign ones.
Mean Score for Price of the different brands are as follows:
Brands |
Mean Score |
|
Subana |
3.73 |
|
Baker’s |
2.76 |
|
LU |
2.64 |
|
Esko |
3.95 |
|
Arnotts |
3.29 |
|
LKS |
3.87 |
|
Peak Freans |
3.65 |
For the purpose of an in depth analysis the mean values have been represented as Mean1=Very Expensive to Mean 5=Very Cheap. From the above findings it can be resumed that mean score for local brands are much better than foreign ones on the price attributes. However it also be noted that among local ones, Subana has a mean score of 3.73 compared to 3.95 for Esko and 3.87for LKS. This shows that Esko has the best mean value on price attributes.
How do you find the packaging of Subana biscuits?
On a Rating 1 as dull to Rating 7 as attractive, 26% of respondents gave a score of 2 which revealed that packaging of Subana biscuits is seen as very dull by those people. On the whole it can be found that most points equaling to 52% (9%+26%+17%) on the scatter diagram are closer to ranking 1 which defined the packaging as dull. While on the other hand there are just 36% (22%+9%+5%) of the scatter diagram that is nearer to rating 7 which describe the package as attractive.
Does the packaging provide you with necessary information/details about Subana biscuits?
The pie chart shows that the packaging of Subana biscuit has an important role in providing information or details to customers. Yet 69% respondents stated that the package does not provide the necessary information. In this view it reveals that customers have a tendency to have a proper glance at the packaging and they will look for details such as ingredients, weight, accreditations, date of expiry and so on.
How far do you agree that packaging has an impact on the purchase of Subana biscuits?
Packaging is indeed an important element of Subana biscuit. This is reflected by the large percentage of respondents which amounted to 48% who strongly agree and 34% who agree that packaging have an impact on the purchase of Subana biscuits. As such only a minority of 8% respondents ignore packaging when purchasing Subana biscuits as they are interested mostly with the product itself while 10% are of neutral opinions.
What benefits do you seek while purchasing a packet of Subana biscuits?
57% respodents purchase Subana biscuit for its taste as they are mainly interested with the core product itself. But nevertheless there are many people who are highly health conscious whereby it can be seen that 23% respondents will seek nutritional value benfits and 18% will purchase Subana biscuits provided they are low in calories. Other benefits stated by people is that Subana biscuits are not oily as some other biscuits.
How far do you agree that the quality of Subana biscuit has improved over the years?
Improvement is essential with the ever changing needs of customers. However it can be seen that only 40% and 5% respectively who agree and strongly agree that Subana biscuits have improved over the years. Conversely almost 55% respondents share a negative views concerning the enhancement of the quality of Subana biscuits. For them developments made are not visible and as such this will further impact on perception of customers towards Subana biscuits.
Paired Sample T-test for Improvement in Quality of Subana Biscuits (Q15) and Frequency of Purchase (Q7)
The result shows that standard deviation for frequency of purchase of Subana biscuits (0.954) is slightly higher than standard deviation for improvement of quality of Subana biscuits (0.949) implying that respondents opinions diverge more from each other for frequency of purchase.
Correlations generally vary between negative one and positive one (-1 < r < 1). Accordingly r=–0.427 meaning that there is a very weak correlation between the frequency of purchase and improvement in quality of Subana biscuits. Furthermore the significance value (p=0.000) is less than 5% (0.05) which indicates that there is no significant relation between the two variables.
Where do you normally buy Subana biscuits?
Respondents that purchase Subana biscuit in supermarkets accounts for 48%. While 25% and 24% respondents purchase Subana biscuits in hypermarkets and shops in their locality respectively. As such this reveals that Subana biscuits are normally purchased in areas that are visited by many people. On the contrary only 3% buy Subana biscuits at the factory shops which is located at Bell Village.
What will you do if you do not find Subana biscuit at the outlet you visited?
It is found that a large proportion of 69% respondents will simply choose another brand if they don’t find Subana biscuits. This further revealed that they were not loyal towards Subana biscuits. Since the product was not available, those people shifted to other brands easily. This may be due to fact that the buyers have low switching costs. Alternatively only 13% respondents would not choose any other biscuits, since those people would not derived the same benefits from other biscuits. Moreover 18% respondents would look for the same biscuits elsewhere. For them Subana biscuits are the ideal biscuits and they will try to look for that particular biscuits in other outlets.
Which promotional ingredients influence your purchase decisions?
As illustrated by the chart, sales promotion is seen to have the highest influence upon purchase decisions as stated by 57% respondents. Afterwards 21% respondents suggested that advertising also manipulated their purchasing decisions. While the other three tools of promotional mix have the least influence. In this respect it is believed that advertising and sales promotion are two main dominant ways of persuading customers in their purchase decisions.
Have you ever come across an advertisement of Subana biscuits?
Most of the respondents (60%) have never came across an advertisement of Subana biscuits while only 40% respondents have crossways with a commercial of Subana biscuits. Despite engaging in advertising yet these adverts are not percieved by majority of respondents. This could be due to unproper means of communication, bad timing or even poor advertisement that did not caught the attention of the population.
If yes, where?
Bearing in mind the high intellectual population of the country who read newspaper everyday is one of the best medium of advertisement according to the survey. Out of those 40% who have ever come across an advertisement of Subana, 28% respondents have viewed the advertisements via newsapers. Television also is cited by 9% whereby advertisement of Subana biscuits are broadcasted. Medium such as radio and billboard have been viewed by just 2% while the other means that respondents have seen advertisment of Subana biscuit is phamplets.
Have you encounter any sales promotion with Subana biscuits?
As illustrated by the pie chart there is an equal distribution between those who have encounter sale promotion and those who have not came across sales promotion with Subana biscuits. But still there’s half of the sampled population who replied negatively which is not a good sign indicating that sales promotions were not recognised by many respondents despite that it was found earlier that sale promotion remained a dominant tool of marketing communication mix.
If yes, which type?
Out of those 50% respondents who have came across sales promotion it was found that price discounts were most common. Hence price sensitive buyers would normally get attracted easily. 13% also have encountered sales promotions such as bonus pack whereby customers get a packet of Subana biscuit free when buying that particular product. Opinions for others inlclude free sample tasting in supermarkets and hypermarkets while coupons or gift vouchers accumulated to only 1%.
How would you rate your level of satisfaction with Subana biscuits?
On the level of satisaction it can be seen that 43% of respondents are satisfied with Subana biscuit and also 9% are very satisfied. This implies that a good proportion of the population are satified with the product. But at the same time there are 24% who are dissatisfied and 5% very dissatisfied with Subana biscuits. This is a poor indication as being the market leader Subana biscuits do not satisfy the needs and expectations of all the consumers.
Are you aware that Mauritius Biscuit Making Co Ltd manufactures Subana biscuit?
31% of respondents acknowledge that Subana biscuits are manufactured by Mauritius Biscuit Making Co Ltd. These people as such are interested to know about the manufacturer of the product they used, since very often a company reputation reflects on the image of the products it offers. However, 69% respondents are not acquinted with the manufacturers of Subana biscuits. These people have no interest in knowing the organisation since they are concerned just with the product itself.
Are you aware that Subana biscuit are produced in accordance to European Standards?
Those who don’t know that Subana biscuits are produced in accordance to European standards share a larger part of the pie chart with 69%. In this respect it is found that customers are interested only with the final output. The processes and standards use by the organisation are not taken into consideration. Nevertheless, there are 31% of respondents who are aware that MBMCL operates in accordance to European standard. These respondents fully believe that these standards and processes will lead to the ultimate product.
Are you aware that Subana biscuits are ISO 9001:2000 certified?
71% respondents are unacquainted that Subana biscuits are ISO certified. They are not fascinated in knowing about the assurance that ISO provide for the product. Alternatively only a minority of 29% are conscious that Subana biscuits are ISO certified and this provide assurance to the customers that the quality systems of the manufacturer satisfied the requirements of the standards.
Rating of the following statements according to your present opinion of Subana biscuits
No |
Statements |
Mean Score |
|
I. |
Am not going to change my consumption habit |
2.96 |
|
II. |
Am going to switch from my habitual biscuits to Subana biscuits |
2.53 |
|
III. |
Taste is more important than quality |
2.72 |
|
IV. |
Price is more important than quality |
2.62 |
For the purpose of an in depth analysis the mean values have been represented as Mean1=Strongly Disagree to Mean 5=Strongly Agree. From the results obtained it is observed that for the first statement respondents are not going to change consumption habit which relates to a score of 2.96 while those who are going to switch consumption habit to Subana has a score of 2.53. Hence by the mean score it can be analysed that respondents are more willing to stick to their present consumption pattern than switching to Subana biscuits. On the other hand taste of subana has a higher mean score of 2.72 compared to mean score of price which amounted to 2.62 against quality of the product.
Open ended question: Any comments about Subana biscuits?
Respondents suggested that MBMCL does not communicate with customers on a regular basis thereby reducing the chance of developing a relationship marketing. There were also some comments made about biscuit “Jam Ring”. Respondents stated that very often the jam which is found in the middle of the biscuits are very often unproportionate among the biscuits. In some biscuits the jam spreads onto the surface while in some other case only a little jam is present. Other people stated that very often subana has defective packaging as the product which appear on the package is not similar to the biscuits inside the package. Next consumers who prefer savories biscuits suggest that these biscuits are unaccessible during other period of the year as compared to the month of December. Comments were also made about creamy biscuits as being too sweet.
5.3 Part C: Hypothesis Testing
The hypotheses that were developed are tested here via Chi Square Test which is an inferential analysis used to test hypothesis established to support the objectives of the survey. This test looks at the frequency of observations and sees if these match the expected frequencies.
The level of significance used in the test was 5% (0.05). If the level of significance was less than 5%, H0 was rejected meaning that there was no association between two variables and consequently H1 was accepted, and eventually there was an association between the two variables.
Furthermore, to establish the strength that existed between the two variables, Cramer’s V was used. Cramer’s V can attain a maximum of 1. The closer the value of Cramer’s V is to 1, the stronger is the association.
Hypothesis 1
The hypothesis developed was to investigate whether there was a relationship between the price and quality of Subana biscuits. Thus the null and alternative hypotheses were presented as follows.
H0: There is no significant relationship between price and quality of Subana biscuits.
H1: There is a significant relationship between price and quality of the Subana biscuits.
Step 1: Cross Tabulation
Step 2: Chi-Square Test
The above result shows that the asymptotic significance (2-sided) for Pearson Chi-square is 0.001. Since it is less than 5% (0.05), the null hypothesis that is H0 should be rejected while the alternative one should be accepted. As a result there is a significant relationship between the price and quality of Subana biscuits.
Step 3: Strength of Association
Relying on the figure obtained in Table 5.9 whereby Cramer’s V statistic is 0.311 out of a possible maximum value of 1, it can be pointed out that there is a weak relationship between price attitudes and quality attributes of Subana Biscuits
Hypothesis 2
The hypothesis developed was to investigate whether there was a relationship between price and level of satisfaction towards Subana biscuits. Thus the null and alternative hypotheses were presented as follows.
H0: There is no significant relationship between price and level of satisfaction towards Subana biscuits.
H1: There is a significant relationship between price and level of satisfaction towards Subana biscuits.
Step 1: Cross Tabulation
Step 2: Chi-Square Test
As illustrated in the table, it can be found that the asymptotic significance (2-sided) for Pearson Chi-square is 0.000 and is less than 5% (0.05). Hence the null hypothesis should be rejected while the alternative one should be accepted. Therefore it can be constructed that indeed there is a relationship between the price attitudes and level of satisfaction towards Subana biscuits.
Step 3: Strength of Association
The fact that Cramer’s V can attain a maximum of 1 and relying on the figure obtained in the table above whereby Cramer’s V is 0.333 out of a possible maximum value of 1, it can be deduced that there is a fairly weak relationship between price attitude and level of satisfaction towards Subana biscuits.
5.4 Summary
The data analysis has shed light onto the marketing mix of the survey and the hypotheses were tested to see relations between the different variables. As such the next chapter will deal with some recommendations so as to help MBMCL be more efficient.
Discussions and Recommendations Chapter 6
6.0 Introduction
Based on the findings and analysis, this chapter provides an insight of possible ways that can be adopted to counter shortfalls revealed from the survey. Basically the proposed solutions evolved around marketing mix of the product.
6.1 Product
6.1.1 Improve Packaging
As figured out from the analysis 52% respondents viewed packaging as dull. The current packaging is still unattractive compared to competitors’ product. Generally Subana biscuits are packed in laminated aluminium foil or put in boxes. As such MBMCL can introduce new ways of packaging such as biscuits in tins. This will be very suitable for assorted biscuits which are normally targeted for occasions like family get together and parties. The benefits of using tins as packaging are that they easily attract customers’ attention through its size, shape and colour.
Furthermore 69% respondents also revealed that the packaging did not provide sufficient information. Hence concerning the labeling side the package should provides nutritional details with a breakdown of the amount of calories, proteins, calcium and carbohydrate that are present in the biscuits or even states that Subana biscuits are purely vegetarian and free from animal fat which can acts as competitive advantage. At the same time by abiding by the labeling law, MBMCL will prevent problems from arising especially taking into consideration Consumer Protection Unit which acts as ‘watchdog’ on behalf of consumers.
6.1.2 Improve Quality
Quality is perhaps the most frequently repeated mantra among managers and executives in an organization (Reeves and Bedner, 1994). Despite Subana biscuits are ISO certified 55% respondents were not satisfied with their quality attributes whereby respondents stated biscuits were broken and burnt. As such MBMCL should have a good Quality Management System based on its business strategies, external requirements and internal operations that will help to convert inconsistency into consistency for the customers. MBMCL should work towards continuous improvement since quality is something very dynamic due to changes in customers’ needs and preferences.
6.1.3 Improve Taste
Taste was seen to be one of the benefits that 57% respondents look for when purchasing Subana biscuits. Generally customers’ needs are ever-changing and MBMCL must monitor these changes. It is proposed that MBMCL invest in Research and Development activities so as to discover new tastes that will make customers delighted. Nowadays there are many health conscious people and MBCML should even ensure that the level of sugar is maintained at any appropriate level since some respondents stated that some creamy biscuits were too sweet. Thus MBMCL should cater for the taste of each and every customer.
6.1.4 Widening the Product Line
MBMCL should attempt at providing more biscuits towards different segments. Diabetes is being recognized as the hidden epidemic of the 21st century and Mauritius has unfortunately not been spared by this issue. At present MBMCL is producing only “Wheat Crackers” as a diabetic biscuits. Hence the company should manufacture a larger variety of diabetic biscuits. Furthermore concerning biscuits “Jam Rings” MBMCL can provide different type of jams for that particular biscuits while at the same time giving customers a wider variety of biscuits. It is also recommended to manufacture biscuits in different sizes and weights. For instance a small child will not eat a whole packet of biscuits. Hence with smaller packets it will be more convenient for some peoples. Concerning ‘Savories’ biscuits MBMCL should also introduce biscuits of cheese flavour so as to target even the vegetarian people for that type of Subana biscuits. MBMCL can also manufacture more biscuits that people can consume during breakfast especially considering the fact that very often people are in a rush in the morning to go to school or work.
6.1.5 Product Differentiation
Jack Trout a marketing consultant argues that today’s fiercely competitive market which is driven by choice is a cruel environment for manufacturers. As stated by Porter (1980) differentiating a product is therefore crucial to effective competition. In this respect MBMCL should try to differentiate its products from rivals. One possible method is to manufacture biscuits of different shapes. For instance biscuits that are targeted at children can be made in shapes such as ‘teddy bear’ or ‘star’. These little changes can add value to the product and at the same time incorporate features that enhance buyers’ satisfaction in non economic ways. MBMCL should try at creating a Unique Selling Position for its product that will at the same time help to promote the brand name ‘Subana’ in the mind of people since there are 11% respondents who are motivated by that brand name.
6.2 Price
MBMCL should review its pricing strategy in order to meet customers’ expectations. The price of Subana biscuits are viewed as cheap and affordable by almost 88% respondents. It even motivates respondents to purchase Subana biscuits as stated by 37%. As such it can be concluded that there are many price sensitive customers. In this respect MBMCL should continue to price its product low especially there are many middle and lower class people in our Island. Nevertheless some people associate price with quality. Thus MBMCL should ensure that for these people the price reflects the quality of the biscuits as they are interested with value for money.
6.3 Place
This marketing strategy must be capitalized so as to ensure that the customers have access to the product. Large retail outlets such as supermarket and hypermarkets are places from where 73% respondents purchase Subana biscuits. Hence MBMCL should aim for maximum market coverage that will ensure that the biscuits are widely available. The biscuits must also be easily seen from the shelves so as to facilitate accessibility. It is also suggested that the unavailability of Subana biscuits in different outlets of the Island have a negative effect since it was found that 69% respondents have a tendency to switch to competitors’ product. Therefore the distribution channel must be revised and MBMCL should increase the delivery vehicles. The company should even give discounts to retailers as well as convincing them to keep sufficient stock of Subana biscuits. Options such as credit facilities or installment payments must be provided by MBMCL to those retailers who have some sort of difficulties in buying Subana biscuits. On the whole MBMCL should ensure a sound working relationship with different channel levels to ensure the success of the product.
6.4 Promotion
6.4.1 Effective Advertising
There are several promotional tools that MBMCL can make use of to communicate with the targeted audience. Advertising were said by 21% respondents to influence purchase of Subana biscuits but at the same time these adverts were not seen by 60% respondents. Taking this fact into consideration it is highly recommended for MBMCL to make people aware of its products. It is advisable for MBMCL to carry out aggressive advertising campaigns whereby the message delivered to the audience remains memorable. Furthermore proper channels must be used and television will be mostly suitable since it can combine visual, sound and movement. The timing of peak hours will be favourable for the adverts since the attention of a large number of viewers can be captured.
6.4.2 More Sales Promotion
Alternatively to increase market share MBMCL should have recourse to sales promotion. Given that the price are generally low the organization should emphasis more on other tools such as offering free packets of biscuits when buying in large quantities. MBMCL can also use coupons, gift vouchers or simply offer stickers especially for some biscuits that are targeted mainly at children.
6.4.3 Personal Selling
Concerning personal selling MBMCL should employ well trained sales representatives. This will enable the organization to gather the required information from the customers and at the same time the firm can be more responsive to their demands.
6.4.4 Direct Marketing
MBMCL can also make use of direct marketing more often by distributing pamphlets extensively to inform customers about new products or even remind them of the existing ones.
6.5 Sponsorship and Contributing towards Corporate Social Responsibility (CSR)
MBMCL should also engage in sponsorship of some activities which will further help to promote the brand name Subana and consequently the organization as a whole. Above all in regard with the concept of CSR put forward by the Government, MBMCL should also indulge in social activities thereby developing contributing towards societal marketing simultaneously. By so doing MBMCL will be closer with the society at large and thereby attempting at developing relationship marketing with the different stakeholders associated with the organization.
6.6 Conducting Survey
MBMCL should engage itself in conducting surveys on Subana biscuits on an appropriate timely basis since customers’ needs and wants keep changing. By conducting regular surveys it will allow the firm to produce as per customers’ requirement which will result in higher level of satisfaction. In this way being responsive to customers demands MBMCL can develop new types of biscuits and exceed customers’ expectations.
6.7 Summary
On the whole it can be conclude that these recommendations will help in answering the research objectives and at the same time enable MBMCL to increase its market share and eventually increase its market share both on a local and national basis.
Conclusion Chapter 7
7.0 Conclusion
MBMCL has come a long way serving the Mauritian population with its famous Subana biscuits. Over the years the business has experienced ups and downs during its trading activities. However with changes in consumers’ needs MBMCL should fine tune its strategies so as to be successful.
This study has shown that the current adopted marketing mix has enable MBMCL to survive in the marketing environment. In a nutshell it is becoming more and more difficult for organisations to develop an effective marketing mix strategy to beat out competitors. However to survive in dynamic marketplace, MBMCL clearly needs to establish effective marketing mix strategies that can survive turbulent changes in the marketing environment. As such MBMCL should work towards continuous improvement so as to further improve its product and thereby leading to higher level of satisfaction among the customers.
Customers are considered as ‘King’ and MBMCL should try to match the 4Ps of the marketing mix around them. Therefore it can be concluded that adopting an effective marketing mix strategy will enable MBMCL to be ahead of rivals and thrive in the marketplace. Hence from this study insights on the ways for improvement and achievement of the objectives can be found.
Consequently this study was aimed at improving the marketing mix of Subana biscuits and due to ever changing needs of customers’ directions for future research might be required. For instance the link between customer satisfaction and marketing mix of Subana biscuits can be studied. Some limitations and opportunities to this study must also be acknowledged. For example a larger sample size can be chosen which will help in gaining more insight or views of people on different dimensions of the topic at hand.
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