THE IMPORTANCE OF UNDERSTANDING THE BUYER BEHAVIOUR AND THE APLLICATION OF MARKETING

MIX ELEMENTS FOR ORGANISATIONAL SUCCESS

Prepared By

B.Navaratnasamy

Reg.No

IIS City Campus

July of 2012

Preliminary Certificate in Marketing

SRI LANKA INSTITUTE OF MARKETING

Acknowledgement

With my heartfelt thanks,

To our most beloved Lectures Mr.Kumaradeepan and Mr.Ketheeswarn for

guiding me for this Assignmet.

To the office Staff of IIS City Campus

To my colleagues of SLIM.

Contents

EXECUTIVE SUMMARY

INTRODUCTION

1.TASK ONE

1.1 Consumer Product Organisation

1.2 Business to Business Product Organisation

2.TASK TWO

2.1 Marketing Mix Theory

2.2 Product

2.3 Price

2.4 Place

2.5 Promotion

3.TASK THREE

3.1 Related Theory

3.2 Problem Recognition

3.3 General Need Description

3.4 Product Specification

3.5 Supplier Search

3.6 Proposal Solicitation

3.7 Supplier Selection

3.8 Order-Routine Specification

3.9 Performance Review

4.TASK FOUR

4.1 The 5 Levels of product in Marketing

4.2 Defined five levels to a product:

CONCLUSION

Annexure

References

Executive Summary

This assignment is on the importance of understanding the buyer behavior and the application of Marketing Mix elements for organizational success.The task one of assignment carried brief introduction about selected two different organisations as consumer product (Unilever Company) and business to business product (Kalani Cables PLC). The task two is referenced to the selected organisation as cuonsumer product, which is carried out a detailed analysis of the marketing mix elements and identify the key unique features for a certain product in brief. The task three is referenced to the selected business to business product buying decision process model has been explained the stages that in the model. In the final task contained in planning consumer product market offerings, the organization needs to think through the five levels of the selected product which is add customer value.

INTRODUCTION

In the marketing world product is a major thing. Product may be purchase for

personal consumption or use directly in producing other product.

The Aim of this Assignment is selected two different products, first one is

consumer product (B2C) and second one is Business to Business Product (B2B) for detail

analysis of Marketing mix elements, buying process model and five levels of product are

how to work in a organisation developments that provide superior customer value.

1.TASK ONE

1.1 Consumer Product Organisation

The Consumer Product Organisation means which Organisation produce products

for final consumers for personal consumption. Uniliver Company is known as a

Consumer Product Organisation in Sri Lanka.

1.1.1Introduction to Unilever Company

With 400 brands spanning 14 categories of home, personal care and foods products,

no other company touches so many people's lives in so many different ways.

Unilever Company brand portfolio has made us leaders in every field in which it

work. It ranges from much-loved world favourites including Lipton, Knorr, Dove and

Omo, to trusted local brands such as Blue Band and Suave.

From comforting soups to warm a winter's day, to sensuous soaps that make you

feel fabulous, our products help people get more out of life.

We're constantly enhancing Unilever brands to deliver more intense, rewarding

product experiences. Unilever invest nearly €1 billion every year in cutting-edge research

and development, and have five laboratories around the world that explore new thinking

and techniques to help develop our products.

Continuous development of the Organisation: Consumer research plays a vital role

in our brands' development. We're constantly developing new products and developing

tried and tested brands to meet changing tastes, lifestyles and expectations. And our

strong roots in local markets also mean Unilever can respond to consumers at a local

level.

By helping improve people's diets and daily lives, we can help them keep healthier

for longer, look good and give their children the best start in life.

Unilever also believe that the very business of conducting business in a responsible

way has a positive social impact and create and share wealth, invest in local economies

and develop people's skills – both inside our organisation and in the communities around

us.

Today Unilever employs 174 000 people in 100 countries worldwide, and supports

the jobs of many thousands of distributors, contractors and suppliers.

Health & personal care:-

First launched in France in 1983, our leading male grooming brand, Axe, now gives

guys the edge in the mating game in over 60 countries

Unilever oral care brands Mentadent, Peposodent and Signal have teamed up with

the world's largest dental federation, the FDI, which represents over 750 000 dentists

around the world

Lux became the first mass-marketed soap when it launched in 1924. Today it

achieves annual global sales of over €1 billion

Domestos is a best-selling brand in nine of the 35 countries in which it's sold

Hindustan Unilever in India has launched a hand-wash product, Surf Excel Quick

Wash, with a low foaming formulation, reducing the amount of water needed for rinsing

by up to two buckets per wash

Recent breakthroughs at Rexona include Rexona Crystal, a deodorant that

eliminates unsightly white deposits on dark garments

Unilever Small & Mighty concentrated liquid fits into a smaller bottle, requiring

half the packaging, water and lorries to transport it, making it kinder on the environment.

Foods:-

Knorr is our biggest food brand with a strong presence in over 80 countries and a

product range including soups, sauces, bouillons, noodles and complete meals

Unilever is the world's largest ice cream manufacturer, thanks to the success of our

Heartbrand which includes Magnum, Cornetto, Carte d'Or and Solero, and Ben & Jerry's

and Breyers in the US.

Lipton's tea-based drinks include the international Lipton Iced Tea range, the

Lipton range in North America and Lipton Yellow Label, the world's favourite tea brand

Becel/Flora pro.activ products have been recognised as the most significant

advancement in the dietary management of cholesterol in 40 years.

1.2 Business to Business Product Organisation

Business to Business Product Organisation means which Organisation produce

products are purchased for further processing or for use in conducting a business. Kalani

Cables Company is known as a Business to Business Product Organisation in Sri Lanka.

1.2.1 Introduction to Kalani Cables

Kelani Cables Ltd. was founded in 1969, as an import-substitute manufacturer

during the controlled-economy era. Initially, components such as drawn wire were

imported, but over time, the company commenced the manufacture of this commodity at

its factory. Hence, Kelani is the pioneer in Sri Lanka's wire drawing industry.

In 1973, KCL was incorporated as a quoted public limited liability company for the

manufacture of power cables, telecommunications cables, and enameled winding wires in

Sri Lanka.

The company was a subsidiary of the Pacific Dunlop Cables Group of Australia

until 1996 and it thereafter became a fully-owned Sri Lankan company. The Pacific

Dunlop Group is up-graded the management systems and technology of the company to

international standards.

The ACL Cables group of companies acquired majority shares of Kelani in 1999.

Since then Kelani has been recognized as a fast developing cable-manufacturing company

in Sri Lanka.

Products:-

KCL products are manufactured to international as well as Sri Lankan standards.

The Kelani enamel wires have received the Underwriters Laboratory (UL) certification.

The company's main products are all types of aluminium and steel-reinforced aluminium

conductors, and single-core and multi-core PVC/XLPE insulated armoured and

unarmoured copper or aluminum cables and coaxial cables. The company is also the

leading manufacturer in Sri Lanka of enamelled copper winding wires.

Systematic investments have been made over the past four years or so, and, as a

result, the company has achieved better product safety, international recognition,

breakthroughs in product development, and, above all, import substitution. Research and

Development (R & D) has been given priority with regard to the objectives of the

company. A state-of-the-art laboratory and testing facility at KCL offers precise and

methodical tests for all products, ensuring that they are SLS compliant, as well as meeting

other international standards, before being rolled out of the factory. This, in turn, assures

users of the product's reliability and safety.

Product Categories:-

2.TASK TWO

2.1 Marketing Mix Theory

The major marketing management decisions can be classified in one of the following four categories:

Product: - this means the product's (or service's) quality, the functions, the features and benefits of its design plus packaging, guarantees and level of after-sales service. Choices can be made about any of these aspects.

Price: - this includes recommended prices to end-user customers, distributor's trade prices, cash discounts, bulk discounts, terms of credit.

Place: - this means where and when the customer buys and consumes the product or service. Place is sometimes referred to as the marketing channels, physical distribution, logistics or location.

Promotion:- this means the promotions mix or the communications mix. This mix includes advertising, sales promotions, publicity, direct mail, exhibitions, display, packaging, selling and even word-of-mouth.

These variables are known as the marketing mix or the 4 P's of marketing. They are the variables that marketing managers can control in order to best satisfy customers in the target market. The marketing mix is portrayed in the following diagram:

2.2 Product

2.2.1 Sunsilk Dream Soft and Smooth

SunSilk Dream soft and smooth range co-created with Thomas taw nourishes the driest and roughest hair. Enriched with the ceramide egg complex offers a complete treatment that restores hair softness from the first wash.For better results use the Sunsilk dream soft & smooth conditioner along with the Sunsilk soft & smooth shampoo.

2.2.2 Sunsilk Hair Fall Solution

Hair fall solution is the perfect answer for visibly less hair fall in just one week. Sunsilk’s high-performance Hair Fall Solution range co-created with Francesca Fusco delivers essential nutrients such as the soya vitamin complex boosts strength and density to hair. For best results use the Sunsilk hair fall solution conditioner along with the shampoo. For severe hair fall use the Sunsilk hair fall treatment.

2.2.3 Sunsilk Damaged Hair Reconstruction

The new SunSilk Damaged Hair Reconstruction range co- created by one of the world’s well renowned hair care experts, Thomas Taw repairs and nourishes damaged hair. The king coconut energizers in it gives special attention to every strand of damaged hair and nourishes it from within. This range includes the damaged hair reconstruction shampoo, conditioner, leave on and treatment.

2.2.4 Sunsilk Stunning Black Shine

Sunsilk’s new Stunning Black Shine, co-created with Jamal Hammadi, gently nourishes each hair fibre to activate its natural shine properties, so that hair glows brilliantly. It is enriched with Amla Pearl Complex, which helps protect your hair against sun damage.

2.3 Price

Unilever Sri Lanka claims to practice value-based pricing in which the customers’ perception of the product’s price provides a starting point for developing the marketing mix of the product. The research department determines this price usually by using focus groups. The price of Sunsilk shampoo sachets shows how the price also reflects a concern to make the purchase more convenient, since the rupee is denoted in this value.

Sunsilk is also available in Rs 120 for 90ml and Rs 210 for 200ml bottles to cater to the demands keeping in mind the wants of this particular customer segment.

The primary importance of this value-based pricing is that the product demand will be much higher if its price is in line with the customer’s perception of its value. One crucial concern for value-based pricing is strict management of cost in order to be able to make a profit at the value-based price. After the initial price is determined, Unilever Sri Lanka then uses target costing in order to achieve the required profits.

2.4 Place

Distribution Objective:

“To reach as many towns and villages as we can”

Unilever Sri Lanka has over 50 distributors whose function is to sell to wholesalers directly. There are different distributors for different areas. They are carefully selected and their performance is constantly evaluated. Other than the distributors they have retailers and outlets as well.

2.5 Promotion

* Build above the line consumers’ awareness.

* Creating a personality of the brand.

Besides having these general objectives, the advertising objectives are set avoiding to the advertising strategy for each product, E.g. Sunsilk advertising objectives since it was being re-launched were:

* To increase the usage.

* Conditioning benefits.

* Makes the hair appear clean and shiny.

* Imparts a feeling of freshness-due to fragrance.

* Easy to manage, silky, soft hair.

* Unique shampoo for every hair type.

* Effectively communicate brand promise.

Promotional Strategy:-

* Innovative campaigns such as ‘Hairapy’ and ‘Life Can’t Wait’ were launched to attract women to the brand

* Sponsored short films/events that were broadcast during popular television shows.

* Media platforms used

* Print media

* internet rural campaign

* environment concern ads

* Music videos

* Free sample distribution

* Demo campaigning

* Promotion of the products in the sunsilk range through events such as fashion shows and bridle shows. Sunsilk has come up with a new promotional campaign GOOD HAIR DAYS in six major cities in collaboration with famous hair stylists of the country.

* Advertising

Unilever Sri Lanka believes that messages about product delivered by credible sources can be very persuasive. Hence world famous hair care expert like Lal Weerasinghe endorses Sunsilk and more value is added to the brand. Consumers relate to products itself, they can relate to a human being who consumers believe is an expert so Lal Weerasinghe is an expert so is Sunsilk. Lal Weerasinghe a recognized and highly qualified hair stylist is used by Sunsilk in its ads and TV shows because they want to bring out an expert’s image.

3.TASK THREE

3.1 Related Theory

Organizational buying is the decision making process by which formal organizations establishes the need for purchased products and services and identifies, evaluate, and choose among alternative brands and suppliers. The business market consists of all the goods that a business uses as part of their day to day operations. When purchasing goods, a business has three options: a straight rebuy, modified rebuy, and a new task. Within the company's buying center there are several groups who make inputs into the decision process. There are initiators, users, influencers, deciders, approvers, buyers, and gatekeepers. As a company decides what to purchase they go through an eight step buying process. The eight steps are problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order routine specification, and performance review.

3.2 Problem Recognition

The buying process begins when someone in the company recognizes a problem or need that can be met by acquiring a specific product or service. Problem recognition can result from internal or external stimuli. Internally, the company may decide to launch a new product that requires new production equipment and materials. Or a machine may break down and need new parts. Perhaps a purchasing manager is unhappy with a current supplier's product quality, service, or prices. Externally, the buyer may get some new ideas at a trade show, see an ad, or receive a call from a salesperson who offers a better product or a lower price. In fact, in their advertising, business marketers often alert customers to potential problems and then show how their products provide solutions.

For example, Ceylon Electricity Board (CEB) wants to offer efficient power supply services to its clients. To do this it needs to purchase some Over Head Line Cables. Thus, the need to make a purchase of a product, Over Head Line Cables, is identified.

3.3 General Need Description

Having recognized a need, the buyer next prepares a general need description that describes the characteristics and quantity of the needed item. For standard items, this process presents few problems. For complex items, however, the buyer may have to work with others—engineers, users, consultants—to define the item. The team may want to rank the importance of reliability, durability, price, and other attributes desired in the item. In this phase, the alert business marketer can help the buyers define their needs and provide information about the value of different product characteristics.

3.4 Product Specification

The buying organization next develops the item's technical product specifications, often with the help of a value analysis engineering team. Value analysis is an approach to cost reduction in which components are studied carefully to determine if they can be redesigned, standardized, or made by less costly methods of production. The team decides on the best product characteristics and specifies them accordingly. Sellers, too, can use value analysis as a tool to help secure a new account. By showing buyers a better way to make an object, outside sellers can turn straight rebuy situations into new-task situations that give them a chance to obtain new business.

For example, the CEB must select which type of Over Head Line Cables from the many push and low resistance varieties on the market meets the company need for some Over Head Line Cables the best.

3.5 Supplier Search

The buyer now conducts a supplier search to find the best vendors. The buyer can compile a small list of qualified suppliers by reviewing trade directories, doing a computer search, or phoning other companies for recommendations. Today, more and more companies are turning to the Internet to find suppliers. For marketers, this has leveled the playing field—smaller suppliers have the same advantages as larger ones and can be listed in the same online catalogs for a nominal fee: The newer the buying task, and the more complex and costly the item, the greater the amount of time the buyer will spend searching for suppliers. The supplier's task is to get listed in major directories and build a good reputation in the marketplace. Salespeople should watch for companies in the process of searching for suppliers and make certain that their firm is considered.

3.6 Proposal Solicitation

In the proposal solicitation stage of the business buying process, the buyer invites qualified suppliers to submit proposals. In response, some suppliers will send only a catalog or a salesperson. However, when the item is complex or expensive, the buyer will usually require detailed written proposals or formal presentations from each potential supplier. Business marketers must be skilled in researching, writing, and presenting proposals in response to buyer proposal solicitations. Proposals should be marketing

documents, not just technical documents. Presentations should inspire confidence and should make the marketer's company stand out from the competition.

3.7 Supplier Selection

The members of the buying center now review the proposals and select a supplier or suppliers. During supplier selection, the buying center often will draw up a list of the desired supplier attributes and their relative importance. In one survey, purchasing executives listed the following attributes as most important in influencing the relationship between supplier and customer: quality products and services, on-time delivery, ethical corporate behavior, honest communication, and competitive prices. Other important factors include repair and servicing capabilities, technical aid and advice, geographic location, performance history, and reputation. The members of the buying center will rate suppliers against these attributes and identify the best suppliers. As part of the buyer selection process, buying centers must decide how many suppliers to use. In the past, many companies preferred a large supplier base to ensure adequate supplies and to obtain price concessions. These companies would insist on annual negotiations for contract renewal and would often shift the amount of business they gave to each supplier from year to year. Increasingly, however, companies are reducing the number of suppliers.

There is even a trend toward single sourcing, using one supplier. With single sourcing there is only one supplier to handle and it is easier to control newsprint inventories. Using one source not only can translate into more consistent product performance, but it also allows press rooms to configure themselves for one particular kind of newsprint rather than changing presses for papers with different attributes. Many companies, however, are still reluctant to use single sourcing. They fear that they may become too dependent on the single supplier or that the single-source supplier may become too comfortable in the relationship and lose its competitive edge. Some marketers have developed programs that address these concerns.

3.8 Order-Routine Specification

The buyer now prepares an order-routine specification. It includes the final order with the chosen supplier or suppliers and lists items such as technical specifications, quantity needed, expected time of delivery, return policies, and warranties. In the case of ; maintenance, repair, and operating items.

3.9 Performance Review

In this stage, the buyer reviews supplier performance. The buyer may contact users and ask them to rate their satisfaction. The performance review may lead the buyer to continue, modify, or drop the arrangement. The seller's job is to monitor the same factors used by the buyer to make sure that the seller is giving the expected satisfaction. We have described the stages that typically would occur in a new-task buying situation. The eightstage model provides a simple view of the business buying decision process. The actual process is usually much more complex.

In the modified rebuy or straight rebuy situation, some of these stages would be compressed or bypassed. Each organization buys in its own way, and each buying situation has unique requirements. Different buying center participants may be involved at different stages of the process. Although certain buying process steps usually do occur, buyers do not always follow them in the same order, and they may add other steps. Often, buyers will repeat certain stages of the process.

4. TASK FOUR

4.1 The 5 Levels of product in Marketing

A product is more than physical. A product is anything that can be offered to a market for attention, acquisition, or use, or something that can satisfy a need or want. Therefore, a product can be a physical good, a service, a retail store, a person, an organisation, a place or even an idea. Products are the means to an end wherein the end is the satisfaction of customer needs or wants.

Distinguished three components:

Need: a lack of a basic requirement;

Want: a specific requirement for products or services to match a need;

Demand: a set of wants plus the desire and ability to pay for the exchange.

Customers will choose a product based on their perceived value of it. Satisfaction is the degree to which the actual use of a product matches the perceived value at the time of the purchase. A customer is satisfied only if the actual value is the same or exceeds the perceived value.

4.2 Defined five levels to a product:

Let’s take a product from consumer product organization the example of Astra to explain these levels,

4.2.1 Core Benefit

The fundamental need or want that may be consumers satisfy by consuming the product or service. In case of Astra for diet

4.2.2 Basic Product

A version of the product is containing only those attributes or characteristics absolutely necessary for it to function. In case of Variety of Astra, looks and packaging of the Astra, Quality of Astra and Sizes of Astra etc.

4.2.3 Expected Product

The set of attributes or characteristics are buyers normally expect and agree to when they purchase a product. In case of essential fats and vitamins A & D all need to be taken up from the diet

4.2.4 Augmented Product

Inclusion of additional features, benefits, attributes or related services that serve to differentiate the product from its competitors. In case of before the Astra varieties sale make as cool.

4.2.5 Potential Product

All the augmentations and transformations, a product that might undergo in the future In our Astra example, the features such as fats. Vitamins and calcium for teeth strengthen

Noted that, much competition takes place at the Augmented Product level rather than at the Core Benefit level or, as Levitt put it: 'New competition is not between what companies produce in their factories, but between what they add to their factory output in the form of packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing, and other things that people value.'

Conclusion

Today’s successful organisations have one thing in common that is strongly customer focused and heavily committed to marketing with getting positioning their Brands. These organisations share a passion for understanding customer needs; develop products that provide superior customer value. These organizations hold very strong marketing mix elements as prices, distribute, and promote them effectively in well-defined target markets. In addition, they motivate everyone in the organisation to build strong relationships with customers based on creating customer value.

Annexure

References

1. G S Sylvester “Preliminary Certificate in Marketing Study Kit”,

Sri Lanka Institute of Marketing

2. Philip Kotler “Principles of Marketing” 12th Edition, 2008.

3. Official Unilever Company website - http://www.unilever.com.lk/

4. Official Kalani Cables PLC website - http://www.kelanicables.com/