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THE IMPORTANCE OF UNDERSTANDING THE BUYER

BEHAVIOUR AND THE APPLICATION OF MARKETING

MIX ELEMENTS FOR ORGANISATIONAL SUCCESS

Prepared By

U. Yogachandran

PCM II/2012/KAN - 0030

Slim Kandy

July 2012

Preliminary Certificate in Marketing

SRI LANKA INSTITUTE OF MARKETING

Acknowledgements

My sincere thanks my lecturers Mr. Bharatha Herath, Ms. Perly Liyanage and Ms.
Tharangi Wijesooriya, for guiding me to complete this assignment.

Its my duties to thank Ms. Indika and all other staffs of SLIM-Kandy, for providing an
excellent environment to study.

I wish to sincerely thank Mr. Sanath Piyawardhana (General Manager-Sales & Marketing,
OLCL), for guiding me to follow PCM and giving instructions to complete this
assignment and inspiring me.

Furthermore I wish to thank Mr. L.P.L. Hemantha (General Manager-Operations, OLCL)


for giving me details.

Also I wish to thank Ms. Shiromy Liyanage (Asst. Quality Manager-OLCL), Mr.Ikram
(Area Sales Manager - Expack) and my colleagues of PCM for giving me assistance for
this assignment.

I would fail my duties if I do not specially thank my beloved wife for encouragement
given to me to complete this assignment.

Contents

Product

Introduction to selected B2C Marketing Company

Product portfolio of Fonterra Brands Lanka (Pvt) Ltd

Introduction to selected B2B Marketing Company

Product portfolio of Expack Corrugated Cartons (Pvt) Ltd.

Marketing Mix

Introduction of Selected Brand

Detailed Marketing Mix Elements of Anchor Full Cream Milk Powder

Product attributes of Anchor Full Cream Milk Powder

Price attributes of Anchor Full Cream Milk Powder

Place attributes of Anchor Full Cream Milk Powder

Effective Marketing Mix of Anchor Full Cream Milk Powder

Matches customer needs

Matches corporate resources

Creates competitive advantage

Well blended

Organizational buying behavior

Introduction of Selected Product

Detailed Analyses of Buying Decision Process of Slotted Case Cartons.

DMUs of Selected B2B Buying Process.

Levels of Products

Introduction of selected product

Five levels of Anchor Full Cream Milk Powder.

Core Product

Basic Product

c). Expected Product

Augmented Product

Potential Product Findings and Conclusion References

Limitation

Executive Summary

To
:
The Examiner
From
:
PCM Student
Subject
:
The Importance of Understanding The Buyer Behaviour And The

Application Of Marketing Mix Elements For Organisational

Success
Date
:
06.06.2012

As an application of Marketing Mix elements in B2C, I have selected Anchor Full Cream
Milk Powder for analyzing application of Marketing Mix elements for the organisational
success.

I have selected B2B buying behaviour towards Expack Corrugated Cartons (Pvt) Ltds for
understanding the importance of the buyer behaviour.

I used tables, figures and pictures in this assignment, in order to describe my assignment
easily.

Introduction

I have selected Fonterra Brands Lanka (Pvt) Ltd and Expack Corrugated Cartons (Pvt)
Ltd as B2C and B2B companies respectively in task 01.

In task 02 I analyzed the Marketing Mix Elements of Anchor Full Cream Milk Powder,
which is marketed by Fonterra Brands Lanka (Pvt) Ltd.

In order to complete the task 03 I selected the OLCLs buyer behavior towards Expack

Corrugated Cartons (Pvt) Ltd.

In task 04 I analyzed Anchor Full Cream Milk Powders product levels.

Methodology

I have done this assignment on understanding the Buyer Behaviour and Marketing Mix, in
task 01 I selected Fonterra Brands Lanka (Pvt) Ltd as B2C Company and Expack
Corrugated Cartons (Pvt) Ltd as B2B Company. I gathered data from internet and field to
introduce those companies and its product portfolio.

I select Anchor Full Cream Milk powder to for my detailed analyze of Marketing Mix, I
gathered Data to analyze from Mr. Sanath Piyawardhana, an Ex Sales Manager of
Fonterra Brands Lanka (Pvt) Ltd.

I Selected Orient Lanka Confectionery Private Ltd (known as OLCL)s buying process of
master cartons from Expack Corrugated Cartons (Pvt) Ltd in task 03 for understanding the
buyer behaviour towards to the B2B Company, I gathered data from Mr. L.P.L. Hemantha
(General Manager-Operations-OLCL), Ms. Shiromy Liyanage (Asst. Quality ManagerOLCL) and Mr. Ikram (Territory Manager-Expack Corrugated Cartons Pvt Ltd).

In task 04 I have analyzed product levels of Anchor Full Cream Milk Powder, I gathered
data from Mr. Sanath Piyawardhana, an Ex Sales Manager of Fonterra Brands Lanka (Pvt)
Ltd for analyzing it.

As a summary I have gathered primary data from consumer research, market observation
and discussion with respective company staffs, and for secondary data I referred web
sites, previous marketing related researches, brochures and magazines.

Task 1

1. Product

1.1 Introduction to selected B2C Marketing Company

I have selected Fonterra Brands Lanka (Pvt) Ltd as B2C for my assignment. Fonterra
Brands Lanka (Pvt) Ltd is the market leader in the milk products in Sri Lanka, which is
started 30 years ago.

a) Product portfolio of Fonterra Brands Lanka (Pvt) Ltd

Following products are marketed by Fonterra Brands Lanka (Pvt) Ltd in Sri Lanka under
the brand name of Anchor. Anchors product portfolio as follows.

Table 1.1- Product portfolio of Fonterra Brands Lanka (Pvt) Ltd

Product
Target Market

Anchor Full Cream Milk Powder


Even though this is special product for

children.

Fonterra is not targeting to a

particular age segment.

Anchor 1+
Specially developed for children between the

ages of one and three.

Anchor Pediapro
Targeting children between the ages of one

and three.

Anchor Pediapro Mama


Targeting Pregnant mothers & Breast

feeding mothers.

Anchor Shapeup
For those who want to keep slim and healthy

Also Fonterra is marketing products under the brand names of Newdale, Anelene and
Ratthi.

1.2 Introduction to selected B2B Marketing Company

I have selected Expack Corrugated Cartons (Pvt) Ltd as B2B Company for my assignment.
Expack is an ISO certified, award winning manufacturer and marketer of printed
corrugated cartons to both the local Sri Lankan and export markets.

b) Product portfolio of Expack Corrugated Cartons (Pvt) Ltd.

Table1.2 - Product portfolio of Expack Corrugated Cartons (Pvt) Ltd

Product
Description

Regular Slotted Case


Packaging any type of product from FMCG

to Horticultural to Industrial products

Die Cut Boxes


The cartons are used for packaging of food,

vegetable, as well as for livestock and can

withstand extreme temperatures.

Laminated Boxes
Special Laminated boxes which is a

requirement for direct shelve.

Other Packaging
As a part of Ex-Packs go Green concept,

Expack has developed products such as

wardrobe cartons, pallets, tea chest cartons,

tuna cartons and many more.

Task Two

2. Marketing Mix

2.1 Introduction of Selected Brand

I have selected Anchor Full Cream Milk Powder for my detailed analysis of

Marketing Mix applications.

Detailed Marketing Mix Elements of Anchor Full Cream Milk Powder

Product attributes

Table 2.1- Product attributes of Anchor Full Cream Milk Powder

Marketing
Description

Key Unique Feature

Mix Elements

Variety
2 varieties, Anchor Full Cream Milk Powder
Created TOP of the

and Anchor Full Cream Milk Powder Instant.


mind
awareness to

Design
Greenish New Zealand mountains with blue
the customers.

background, it highlights about the nutritional

factor and the source.

Customer
buys

Anchor
for

Quality
Always gives consistent
quality, made with

World Health Organizations (WHO) and Food


maintain his status,

and Agricultural Organizations Standards.


rather
than
buying

a
local
milk

Features
Highlights about the nutritional factors.

powder.

Brand Name
Separate family name and it positioned in the

top of the mind of


customers. Always

maintaining that Anchor word which in red,

an anchor symbol is top of it.

Packaging
Immediate container with aluminum foil to

protect from the sunlight, moisture and other

external factors, and inner pack is covered by

an outer container, and outer pack is

informative.

Sizes
Anchor Full Cream Milk is having 75g, 250g,

400g, and 1kg - and the Anchor Instant variant

has two pack sizes of 400g and 1kg

Services
Gives warranty to its customers by giving 2

customer hotlines, Customer hotline numbers

are 0112488255 and fax no is 0112488017.

b) Price attributes

Table 2.2 - Price attributes of Anchor Full Cream Milk Powder

Marketing
Description

Key Unique Feature

Mix Elements

List Price
Retail prices

Maintaining a high price

Anchor 75g
Rs.
58.00
& high quality strategy

Anchor 250g
Rs. 165.00
when
comparing
with

Anchor 400g
Rs.
325.00
its

competitors.

Anchor 1Kg
Rs. 810.00

Anchor Instant 400g


Rs.
325.00
Fonterra has introduced

Anchor Instant 1Kg


Rs.
810.00
Rathi full cream milk

Strategies
Physiological pricing strategy, Price is
powder
as
a
fighter

competitive but always maintaining a


brand
to
fight
with

premium price comparatively, to show


competitors,
with
a Sri

customers its high quality.

Lankan
name,

with

Discounts
To the trade are starts with Rs. 18.00 per
lesser
price.

While

case to maximum of Rs. 90.00 per case


Rathi
full cream
milk

for those buy 2 cases up to 15 cases.


powder
fighting
with

special discounts given in modern trade.


competitors,

Anchor

Full Cream maintaining

Payment
Trade - Cash and cheque.

its
premium
pricing
Terms
Distributor Cheque

with its high quality.

Credit Terms
7 to 10 days credit to distributor

4 to 10 days credit to the dealers

c) Place attributes

Table 2.3 - Place attributes of Anchor Full Cream Milk Powder

Marketing
Description
Key Unique Feature

Mix Elements

Channels
Detailed diagram of distribution channels
They
not cover entire

are given in figure 2.1.


shops in Sri Lanka, but

due to the brand power

Coverage
Approximately cover around 40,000 outlets

directly.
and
consumer
demand,

product reach
almost all

Locations
Placed it in all possible outlets

potential outlets.

Transportation
Distributor/Direct Dealer has to provide

transportation for the goods to their

warehouses, Company paying an allowance

for that.

Figure 2.1 Distribution Channels diagram of Anchor Full Cream Milk Powder.

Company

Distributors

Direct Dealers Modern Trade

Whole Sale Shops

Retail Shops

Customer

d) Promotion attributes

Table 2.4 - Promotion attributes of Anchor Full Cream Milk Powder

Marketing
Description
Key Unique Feature

Mix Elements

Advertising
Always promoting with the theme of
Always
targeting mothers

Mothers endless love, to her child.

emotional
relationships

with
her
child,
also

Personal
Shop to shop visit

Selling

highlighting
nutrition

factors in their advertisings,

Public
Special activities for mothers and

Relations
children.
because
Fonterra identified

that mothers are the major

Sales
Promotions in modern trade, specially

Promotions
Best Buy promotions in Cargills Food
decision

makers,

when

City
purchasing milk powders.

Effective Marketing Mix of Anchor Full Cream Milk Powder

Matches customer needs

Anchor matches customer needs, always researching on consumer attitude changes, life
styles, sales promotion & advertising, with that Fonterra maintaining Anchor marketing mix
of Full Cream Milk Powder as per the customer needs.

b) Matches corporate resources

The marketing mix of Fonterra is always matches its corporate resources, Fonterra pre plans
the marketing mix with its corporate resources.

c) Creates competitive advantage

Anchor Full Cream Milk Powder having the competitive advantages with its marketing mix.
This is the reason for Anchor Full Cream Milk Powders success in Sri Lanka.

d) Well blended

Anchor Full Cream Milk Powders Marketing Mix is well blended with correct percentage,
which gives superior value for customers.

Task Three

3. Organizational buying behavior

3.1 Introduction of Selected Product

I have selected buying process of master case cartons, marketed by Expack Corrugated
Cartons (Pvt) Ltd, which required by Orient Lanka Confectionery (Pvt) Ltd (known as
OLCL), producers of Maam Biscuits. They purchase master cartons from Expack
Corrugated Cartons (Pvt) Ltd, to store their biscuit packets.

3.2 Detailed Analyses of Buying Decision Process of Slotted Case Cartons.

Table 3.1 - Detailed Analyses of Buying Decision Process of Slotted Case Cartons

Problem Recognition
Expack found a problem in the Orient Lanka Confectionery

(Pvt) Ltd (OLCL), which is they need to store their new biscuit

named Spicy Chicken, they need a master case to store their

products, and initiator of this problem, is production General

Manager of OLCL.

General
Needs
OLCLs general needs descriptions of cartons are
Description

High Quality carton to store food products.

Maintenance of Consistent quality

Printing cartons as per OLCLs design

Comparatively Low prices

Minimum of one month credit facility

Transportation provided

Environment friendly products

25000 quantities required for first month

Expack can provide above facility.

Product Specification
Technical team OLCL expecting the following from the carton.

Dimensions are 365 mm length, 265 mm width and 225

mm height per carton.

3 flute material

45g weight per 100 square centimeters. (45g/100cm ).

Can load minimum of 55kgs above the stored single

carton.

Appropriate printing as per design.

Relatively easy model for users.

Expack decides that they can manufacture cartons as per the

OLCLs product specifications.

Supplier Search

Expack contacted the Initiator to describe about their cartons,

also they approached the influencer through contacts. Also

Expack e-mailed to the General Manager of OLCL about their

products, which they are giving to various manufacturing

companies in Sri Lanka.

Proposal Solicitation
OLCL has invited selected 3 suppliers to produce a proposal for

the cartons, Expack also got an opportunity to give a proposal to

OLCL. Expack has designed a very well detailed brochure and

sent it to OLCL, after that OLCL has decided to invite Expack

to give a presentation about their cartons. Expack has special

team for presentation, they went to OLCL to give a presentation

to the decision makers and approvers of OLCL. Also Expack

has given samples to OLCL which matches appropriate

requirement of OLCL. Expack presentation team mainly

focused about quality, credit facility, transportation and on time

supply in their presentation.

Supplier Selection
OLCLs decision maker satisfied and decided to purchase

cartons from Expack, Expack had following competitive

advantage with comparing with its competitors.

50 days credit facility

Warranty on cartons, returns acceptable

Easily accessible geographical location

Past history and reputation with OLCL

Product quality

OLCL has signed an agreement with Expack to supply cartons.

Order
routine
OLCL agreed to generate an order for every 30 days and Expack
Specification

agreed to supply the order within 15 days.

Performance Review
OLCL having monthly performance review meeting about their

raw material purchases.

Time to time Expack sends questionnaire to OLCL about their

service satisfaction level, user reviews, modifications required,

and consistent quality.

3.3 DMUs of Selected B2B Buying Process.

Expack has identified the DMUs of OLCL, in order to purchasing the cartons. They are
given in table 3.2.

Table 3.2 DMU member of Selected Buying Center

DMU Unit
Selected Buying Center Member

Initiator
General Manager Production

User
Production Manager and Packaging Materiel Stores Executive

Influencer
Quality Manager

Buyer
Purchasing Executive

Decision Maker
Director Operations

Approver
Managing Director

Gate Keeper
Receptionist

Task Four

4. Levels of Products

It is useful to marketers to think of a product as comprising of five levels. Figure 4.1


Levels of a product

Core Product

Basic Product

Expected Product

Augmented Product

Potential Product

4.1 Introduction of selected product

I have selected Anchor Full Cream Milk Powder to analyze the levels of a product.

Five levels of Anchor Full Cream Milk Powder.

Core Product

Core Product of Anchor Full Cream Milk Powder would be a mean of thirsty and
nutrition.

b) Basic Product

The basic product benefits of Anchor Full Cream Milk Powder as follows

Aluminum foiled inner pack, which is protecting from sunlight, humidity/moisture, and
contamination, which helps to keep the milk powder in good condition for long period.
Inner pack is certified for food grade. Outer package is covering the inner pack from
damaging and also it gives very important details of the product such as weight, price,
date of production, date of repack, date of expiry, usage details, customer care details,
nutrition level and barcode.

Full of protein, vitamins and minerals to help keep kids active and healthy.

Anchor is an exclusive brand name of Fonterra, which is trusted by Sri Lankans.

c). Expected Product

The Expected product benefits are as follows

Nutritional values such as Vitamins, Milk Protein, Milk Fat, Carbohydrate, Riboflavin,
Folate, Vitamin B12, Calcium, Sodium and Potassium.

Consistent quality

Source is from New Zealand, which is very popular for pure and healthy milk.

Very good taste.

Social respectable status.

Various pack sizes - 75g, 250g, 400g, and 1kg.

d) Augmented Product

The Augmented product benefits of Anchor Full Milk Powder are as follows.

Every Drop is Guaranteed and 125 years of Proven Nutrition are the guarantees
given to consumers.

Manufactured World Health Organizations standards, which gives additional values to


this product.

Giving more milk protein and more milk compare with other milk powders.

Agglomerated milk powder, which helps it to dissolve very well with water, which
enables to no lumps in milk.

Potential Product

The potential product levels to Anchor Milk Powder are given below.

Introducing a small milk bag for a single glass of milk, similar to that the tea bags are
in the market, which helps customers for individual consumption.

Creating a Facebook/Twitter clubs for the mothers, to give awareness.

Having CSR activities to the preschools.

Even though Sri Lanka is a small country, Can introduce geographical segmentation,
such as a special milk for the peoples of coolest part in Sri Lanka and a special cool
milk for the peoples of the hottest part in Sri Lanka.

Findings and Conclusion

I found that success of Anchor Full Cream Milk Powder in Sri Lanka is because of the
effective Marketing mix by Fonterra.

Understanding the organisational buying process is the vital part of the success of a B2B
organisation.

References

http://www.fonterra.com/

http://www.island.lk/2010/02/25/business6.html

http://anchorpediapro.com/

http://www.expack.lk

http://www.anchorinstitute.com

http://sundaytimes.lk/120101/BusinessTimes/bt17.html

th

Philip Kotler. Marketing Management, 12 Edition

G.S. Sylvester. Preliminary Certificate in Marketing Recommended Study Text, Sri


Lanka Institute of Marketing

Presentation Slides of Mr. Bharatha Herath, PCM Lecturer, SLIM, Kandy.

Limitation

2000 words to the assignment body.

One month period to complete the assignment.