AKIJ group Marketing

Prepared by SHANTONU_ 01715367067

Executive summary

Akij Food and Beverage Limited (AFBL) is the sister concern of Akij Group, one of the

prominent and leading business houses in Bangladesh. The official inauguration of that concern

started in the beginning of 2007. From the beginning AFBL launched two new carbonated soft

drinks clemon and farm fresh UHT pure milk products in the market. AFBL has successfully

come up with a variety of its products like carbonated soft drinks mojo, lemu speed energy

drink, cheeky monkey snakes and spa drinking water. The main marketing policy of the

company is they use to undertake huge advertisement and promotional activities to create

brand awareness and product positioning among the mindset of the target customers. Not only

that AFBL started to change the concept of advertisement of soft drinks too by using new

creative and concepts. And they were successful in terms of market share and positioning in the

competitive soft drinks market of Bangladesh.

By using the reputation and market demand, Akij Food and Beverage Limited lunched a new

category of soft drinks that is natural pure fruit juice under the Brand name of “Frutika” in August

2008. They targeted the holy month of Ramadan to launch the new product into the market. In

that time they also undertake a huge advertisement and promotional campaign following their

previous concept Mojo and Lemo. The used different Medias to draw the attention of the

consumers like:

Press Advertisement (News paper & Magazines).

Television Commercial (National & Cable TVs). Radio Advertisement (BD Radio &

Private radio stations).

Outdoor Advertisement (Billboards, Pestering, Neon sign etc).

Mobile Campaign (Road shows).

Moving Advertisements (Advertisements on vehicles).

Public Relations (Sponsoring & arranging Spot game shows).

Sales Promotion (Sampling, Gift and scratch card offer) etc.

Basically they used all the elements of marketing communication tools to create awareness

and position their Brand. And they were successful enough to draw the positive attention of the

customers. At present they are offering three flavor of Frutika like Mango, Orange and Grapes.

In all of the cases they offer in two sizes of pack that are 250ml (at taka 25) and 1000ml (at taka

70) plastic bottle.

In our report we worked to identify the “Impact of promotional activities to create product

appeal among the target customers”. So to accomplish our objectives we have undertaken a

field survey on the customers and as well as the retailer of Frutika to know the impact of

Advertisement and promotional activities to create fascination towards the product stimulates

the secondary sales. That is why we made two different questionnaires for the Customers and

the Retailers to collect information from the respondents. At the same time we also undertaken

as exploratory research on the other existing juice brands available in the country to make a

comparison and contrast between Frutika and them.

After collecting all the related information and data analysis, we found that the

advertisement and promotional activities were very much successful to create brand awareness

and product appeal among the target customers. But it is found that comparing with the other

existing brand, price of Frutika is premium about 25-30% more. So the customers are not

satisfied about this issue. More over there is another vital point to be noted that Frutika if

offering only three flavor (mango, orange and grape) and providing only in two pack sizes

(250ml and 1000ml plastic bottle rater any other sizes and foil pack). That is why customers are

not feeling convenient while purchasing Frutika fruit juices.

Situation Analysis

Market Analysis:

The market analysis investigates both the internal and external business environment. It

is vital that Akij Beverage Limited carefully monitor both the internal and external aspects

regarding it’s business as both the internal and external environment and their respective

influences will be decisive traits in relation to Coke’s success and survival in the soft drink

industry.

Internal Business Environment

The internal business environment and its influence is that which is to some extent within

the business’s control. The main attributes in the internal environment include efficiency in the

production process, through management skills and effective communication channels. To

effectively control and monitor the internal business environment, Akij Beverage Limited must

conduct continual appraisals of the business’s operations and readily act upon any factors,

which cause inefficiencies in any phase of the production and consumer process.

External Business Environment

The External business environment and its influences are usually powerful forces that

can affect a whole industry and, in fact, a whole economy. Changes in the external environment

will create opportunities or threats in the market place Akij Beverage Limited must be aware off.

Fluctuations in the economy, changing customer attitudes and values, and demographic

patterns heavily influence the success of Akij Beverage Limited products on the market and the

reception they receive from the consumers.

SWOT Analysis:

SWOT stands for Strengths Weakness Opportunities Threats. SWOT analysis is a

technique much used in much general management as well as marketing scenarios. SWOT

consists of examining the current activities of the organization- its Strengths and Weakness-

and then using this and external research data to set out the Opportunities and Threats that

exist.

Strengths:

Akij Beverage Limited has been a complex part of world culture for a very long time. The

product's image is loaded with over-romanticizing, and this is an image many people have taken

deeply to heart. The Akij Beverage Limited image is displayed on T-shirts, hats, and collectible

memorabilia. This extremely recognizable branding is one of Akij Beverage Limited greatest

strengths. "Enjoyed more than 685 thousand times a day around Bangladesh Akij Beverage

Limited stands as a simple, yet powerful symbol of quality and enjoyment". Additionally, Akij

Beverage Limited bottling system is one of their greatest strengths. It allows them to conduct

business on a global scale while at the same time maintain a local approach. The bottling

companies are locally owned and operated by independent business people who are authorized

to sell products of the Akij Beverage Limited Company. Because Coke does not have outright

ownership of its bottling network, its main source of revenue is the sale of concentrate to its

bottlers.

Weaknesses:

Weaknesses for any business need to be both minimized and monitored in order to effectively

achieve productivity and efficiency in their business’s activities, Akij Beverage Limited is no

exception. Although domestic business as well as many international markets are thriving, Akij

Beverage Limited has recently reported some "declines in unit case volumes in Indonesia and

Thailand due to reduced consumer purchasing power." According to an article in Fortune

magazine, "In Japan, unit case sales fell 3% in the second quarter [of 2010]...scary because

while Japan generates around 5% of worldwide volume, it contributes three times as much to

profits. Latin America, Southeast Asia, and Japan account for about 35% of Coke's volume and

none of these markets are performing to expectation.

Coca-Cola on the other side has effects on the teeth which is an issue for health care. It also

has got sugar by which continuous drinking of Coca-Cola may cause health problems. Being

addicted to Coca-Cola also is a health problem, because drinking of Coca-Cola daily has an

effect on your body after few years.

Opportunities:

Brand recognition is the significant factor affecting Coke's competitive position. Coca-Cola's

brand name is known well throughout 94% of the world today. The primary concern over the

past few years has been to get this name brand to be even better known. Packaging changes

have also affected sales and industry positioning, but in general, the public has tended not to be

affected by new products. Coca-Cola's bottling system also allows the company to take

advantage of infinite growth opportunities around the world. This strategy gives Coke the

opportunity to service a large geographic, diverse area.

Threats:

Currently, the threat of new viable competitors in the carbonated soft drink industry is not very

substantial. The threat of substitutes, however, is a very real threat. The soft drink industry is

very strong, but consumers are not necessarily married to it. Possible substitutes that

continuously put pressure on both Pepsi and Coke include tea, coffee, juices, milk, and hot

chocolate. Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market,

the changing health-consciousness of the market could have a serious affect. Of course, both

Coke and Pepsi have already diversified into these markets, allowing them to have further

significant market shares and offset any losses incurred due to fluctuations in the market.

Consumer buying power also represents a key threat in the industry. The rivalry between Pepsi

and Coke has produce a very slow moving industry in which management must continuously

respond to the changing attitudes and demands of their consumers or face losing market share

to the competition. Furthermore, consumers can easily switch to other beverages with little cost

or consequence.

Product Life cycle:

When referring to each and every product or service ever placed before the consumer i.e. in the

long term all the existing products and services are dead. For e.g.:- Replacement of Ford

Cortina ( a highly successful car) by Ford Sierra, the replacement of sierra by the Ford Mondeo

and the replacement of the old Mondeo by the new Mondeo in 2001. So every product is born,

grows, matures and dies. So in the commercial market place products and services are created,

launched and withdrawn in a process known as Product Life Cycle.

To be able to market its product properly, a business must be aware of the product life cycle of

its product. The standard product life cycle tends to have five phases: Development,

Introduction, Growth, Maturity and Decline. Coca-Cola is currently in the maturity stage, which is

evidenced primarily by the fact that they have a large, loyal group of stable customers.

Furthermore, cost management, product differentiation and marketing have become more

important as growth slows and market share becomes the key determinant of profitability. In

foreign markets the product life cycle is in more of a growth trend Coke's advantage in this area

is mainly due to its establishment strong branding and it is now able to use this area of stable

profitability to subsidize the domestic Cola Wars.

Marketing Objectives

The objective is the starting point of the marketing plan. Objectives should seek to answer the

question 'where do we want to go?’ The purposes of objectives include:

-> To enable a company to control its marketing plan.

-> To help to motivate individuals and teams to reach a common goal.

-> To provide an agreed, consistent focus for all functions of an organization.

All objectives should be SMART i.e. Specific, Measurable, Achievable, Realistic, and Timed.

Specific - Be precise about what you are going to achieve

Measurable - Quantify you objectives

Achievable - Are you attempting too much?

Realistic - Do you have the resource to make the objective happen (men, money, machines,

materials, and minutes)?

Timed - State when you will achieve the objective (within a month? By February 2012)

1. Market Share Objectives:

To gain 60% of the market for soft drinks industry by September 2012.

2. Profitability Objectives:

To achieve a 20% return on capital employed by August 2012

3. Promotional Objectives

To increase awareness of the product on the market.

4. Objectives for Survival

To survive the current market war between competitors.

5. Objectives for Growth

To increase the size of the worldwide Coca Cola enterprise by 10%.

Selecting Target Market

Once the situation analysis is complete, and the marketing objectives determined, attention

turns to the target market. The soft drink market is very large, and the business cannot be “all

things to all people”, so it must choose which market segments have the greatest potential. The

target market is the group of customers on whom the business focuses attention. The target

market is where Coca Cola focuses its marketing efforts as it feels this is where it will be most

productive and successful. The target market for Coca cola is very wide as it satisfy’s the needs

for many different consumers, ranging from the healthy diet consciousness through Diet Coke to

the average human through its best selling drink regular Coke. Most Coke products satisfy all

age groups as it is proven that most people of different age groups consume the Coca Cola

product. This market is relatively large and is open to both genders, thereby allowing greater

product diversification.

There are four broad ways which Coca Cola can segment its market:

-> Mass marketing

-> Concentrated marketing

-> Differentiated marketing

-> Niche marketing

The most apparent method used by Coca Cola is with no doubt the differentiated marketing

method as Coke satisfies’s a range of different markets. Diet coke satisfy’s the weight

consciousness, regular coke, sprite, fanta the average human, coffee, iced tea etc. Each group

of beverages satisfies a particular group of people but majority the average human.

Developing the Marketing Mix

The marketing mix is probably the most crucial stage of the marketing planning process. This is

where the marketing tactics for each product are determined. The marketing mix refers to the

combination of the four factors (price, promotion, product, and place) that make up the core of a

business’s marketing strategy. In this step of the marketing planning process, marketing mix

must be designed to satisfy the wants of target markets and achieve the marketing objectives.

The most successful businesses have continually monitored and changed their marketing mix

due to respective internal and external factors and have monitored the external business

environment in order to maximize their marketing mix components.

Product:

Many Products are physical objects that you can own and take home. But the word

product means much more than just physical goods. In marketing, product also refers to

services, such as holidays or a movie, where you enjoy the benefits without owning the result of

the service.

Businesses must think about products on three different levels, which are the core

product, the actual product and the augmented product. The core product is what the consumer

is actually buying and the benefits it gives. Coca Cola customers are buying a wide range of soft

drinks. The actual product is the parts and features, which deliver the core product. Consumers

will buy the coke product because of the high standards and high quality of the Coca Cola

products. The augmented product is the extra consumer benefits and services provided to

customers. Since soft drinks are a consumable good, the augmented level is very limited. But

Coca Cola do offer a help line and complaint phone service for customers who are not satisfied

with the product or wish to give feedback on the products.

Positioning

Once a business has decided which segments of the market it will compete in,

developed a clear picture of its target market and defined its product, the positioning strategy

can be developed. Positioning is the process of creating, the image the product holds in the

mind of consumers, relative to competing products. Coca Cola and Franklins both make soft

drinks, although Franklins may try to compete they will still be seen as down market from Coca

Cola. Positioning helps customers understand what is unique about the products when

compared with the competition. Coca Cola plan to further create positions that will give their

products the greatest advantage in their target markets. Coca Cola has been positioned based

on the process of positioning by direct comparison and have positioned their products to benefit

their target market. Most people create an image of a product by comparing it to another

product, thus evident through the famous battles between Coca-Cola and Pepsi products.

Branding

It is often hard to say exactly why we buy one company’s product over another.

Companies such as Nike and Adidas spend large amounts of money trying to win consumers

away from their competitors who make products that are very similar. The popularity of the

brand is often the deciding factor. Over the time Coca Cola has spent millions of dollars

developing and promoting their brand name, resulting in world wide recognition. 'Coca-Cola' is

the most recognized trademark, recognized by 94% of the world's population and is the most

widely recognized word after "OK". Coca Cola’s red and white colours and special writing are all

examples of world-wide trademarks.

There are a number of branding strategies: Generic brand strategy, Individual brand

strategy, Family brand strategy, Manufacturer’s brand strategy, Private brand strategy and

Hybrid brand strategy. Coca Cola utilizes the Individual brand strategy as Coca Cola’s major

products are given their own brand names e.g Fanta, Sprite, Coca Cola etc although they

maybe presented as different lines they operate under the name of Coca Cola.

Packaging

Packaging, which is not as highly perceived by businesses, is still an important factor to

examine in the marketing mix. Packaging protects the product during transportation, while it sits

in the shelf and during use by consumers; it promotes the product and distinguishes it from the

competition. Packaging can allow the business to design promotional schemes, which can

generate extra revenue and advertisements. Coca-Cola has benefited from packaging the

product with incentives and endorsements on the labeling as a promotional strategy to increase

its volume of sales and revenue.

Price:

Price is a very important part of the marketing mix as it can effect both the supply and

demand for Coca Cola. The price of Coca Cola’s products is one of the most important factors

in a customer’s decision to buy. Price will often be the difference that will push a customer to

buy our product over another, as long as most things are fairly similar. For this reason pricing

policies need to be designed with consumers and external influences in mind, in order to

effectively achieve a stable balance between sales and covering the production costs.

Price strategies are important to Coca Cola because the price determines the amount of

sales and profit per unit sold. Businesses have to set a price that is attractive to their customers

and provides the business with a good level of profit. Long before a sale was ever made Coca

Cola had developed a forecast of consumer demand at different prices which inevitably

determined whether or not the product came on the market, as well as the allocation of

adequate money and resources to produce promote and distribute he product.

Pricing Strategies and Tactics

The pricing Strategy a business will use will have to focus on achieving the marketing

plan’s objectives and support the positioning of the product, and take external factors such as

economic conditions and competitors in to account. There are 5 strategies available to

business: Market skimming pricing, Penetration pricing, Loss leaders, Price Points and

Discounts. Over the years Coca Cola has used Penetration Pricing as a way of grabbing a

foothold in the market and won a market share. It’s product penetrated the marketplace. Once

customer loyalty is established as seen with Coca Cola it is then able to slowly raise the price of

its product. There has been a fierce pricing rivalry between Coca Cola and Pepsi products as

each company competes for customer recognition and satisfaction. Till now it appears as if

Coke has come up on top, although in order to gain long term profits Coke had to sacrifice short

term profits where in some cases it either went under of just broke even, but as seen it has been

all for the best.

Pricing Methods

Good pricing decisions are based on an analysis of what target customers expect to pay,

and what they perceive as good quality. If the price is too high, consumers will spend their

money on other goods and services. If the price is too low, the firm can lose money and go out

of business.

Pricing methods include: Cost based Pricing, Market based pricing and Competition

based Pricing. Over the years Coca has lost ground here in it’s pricing but has regained its

strength as it employed the Competition-based pricing method which allowed it to compete

more effectively in the soft drink market. Leader follower pricing occurs when there is one quite

powerful business in the market which is thought to be the market leader. The business will tend

to have a larger market share, loyal customers and some technological edge, thus the case

currently with Coke; it was first the follower but through effective management has now become

the leader of the market and is working towards achieving the marketing objectives of the Coca

Cola. Survival in the market place, own 60 % of market share by 2012, increase further

awareness of product and a return on 20% on capital employed for August 2012.

Promotion:

In today’s competitive environment, having the right product at the right place in the right

place at the right time may still not be enough to be successful. Effective communication with

the target market is essential for the success of the product and business. Promotion is the p of

the marketing mix designed to inform the marketplace about who you are, how good your

product is and where they can buy it. Promotion is also used to persuade the customers to try a

new product, or buy more of an old product.

The promotional mix is the combination of personal selling, advertising, sales promotion

and public relations that it uses in its marketing plan. Above the line promotions refers to

mainstream media: Advertising through common media such as television, radio, transport, and

billboards and in newspapers and magazines. Because most of the target is most likely to be

exposed to media such as television, radio and magazines, Coca Cola has used this as the

main form of promotion for extensive range of products. Although advertising is usually very

expensive, it is the most effective way of reminding and exposing potential customers to Coca

Cola Products. Coca Cola also utilizes below the line promotions such as contests, coupons,

and free samples. These activities are an effective way of getting people to give your product a

go.

Place and Distribution:

The place P of the marketing mix refers to distribution of the product- the ways of getting

the product to the market. The distribution of products starts with the producer and ends with the

consumer.

One key element of the “Place/Distribution” aspect is the respective distribution channels that

Coca Cola has elected to transport and sells its product.

Selecting the most appropriate distribution channel is important, as the choice will determine

sales levels and costs. The choice for a distribution channel for any business depends on

numerous factors, these include:

• How far away the customers are;

• The type of product being transported;

• The lead times required; and;

• The costs associated with transport;

There are four types of distribution strategies that Coca Cola could have chosen from, these

are: intensive, selective, exclusive and direct distribution. It is apparent from the popularity of the

Coca Cola’s product on the market that the business in the past used the method of intensive

distribution as the product is available at every possible outlet. From supermarkets to service

stations to your local corner shop, anywhere you go you will find the Coca Cola products.

Physical Distribution Issues

Coca Cola needs to consider a number of issues relating to the physical distribution of

its soft drink products. The five components of physical distribution are, order processing,

warehousing, materials handling, inventory control, transportation. Coca Cola must further try to

balance their operations with more efficient distribution channels.

Order Processing

Coca Cola cannot delay their processes for consumer deliveries (i.e. delivery to selling

centers), as this is inefficient business functioning and is portrays a flawed image of the product

and overall business.

Warehousing and inventory control- warehousing of Coca Cola products is necessary. Inventory

control is another important aspect of distribution as inventory makes up a large percentage of

businesses assets. Choosing the correct and desired inventory measure that Jackson’s sees as

most effective is vital. Jackson’s must remember though that there are factors involved with

inventory control that can hinder the products sales and customer perceptions (hazards,

distribution from storage facilities, etc…).

Materials handling

This deals with physically handling the product and using machinery such as forklifts and

conveyor belts. When holding products, then Coca Cola has benefited from purchasing or

renting respective machinery.

Transportation

Transporting Coca Cola products is the one most important components of physical

distribution. Electing either to transport the sports drink by air, rail, road or water depends on the

market (i.e. global, or domestic?) and depends on the associated costs. The most beneficial

transportation method for Coca Cola would be ROAD if the product were moved around from

storage to the cost centers.

Implementing, Monitoring and Controlling

Financial Forecasts

Financial forecasts are predictions of future events relating strictly to expected costs and

revenue costs for future years. There are five major marketing expenditures, which include

research costs, product development costs, product costs, promotion costs and distribution

costs.

Sales force composite is the most logical method in forecasting revenue. This involves

estimates from individual salespeople to sell to work out a total for the whole business. Once

these costs and revenues are forecasted, management can then decide which combination of

marketing mix strategies will deliver the most sales revenue at the lowest cost.

Implementing

Implementation is the process of turning plans into actions, and involves all the activities that put

the marketing plan to work. Successful implementation depends on how well the business

blends its people, organizational structure and company culture into a cohesive program that

supports the marketing plan.

For its further success, Coca Cola must impose several key changes. Production needs to be

on time and meet the quota demanded from wholesalers. It must also be efficient so as not to

build inventory stocks and inventory prices. The marketing needs to be motivated and

knowledgeable about the product. The forms of promotion such as advertising must be

attracting and enticing to the target market to get the greatest amount of exposure possible for

the product. This will ensure the success of the product in the stores. Distribution of the product

must be efficient. This problem has already been taken care of with convenient transport routes

to commercial areas and transport already being arranged.

Monitoring and Controlling

Monitoring and controlling allows the business to check for variance in the budget and actual.

This is important because it allows Coca Cola to take the necessary actions to meet the

marketing objectives. There are three tools Coca Cola should use to monitor the marketing plan.

They are the following:

i. Sales Analysis

The sales analysis breaks down total business sales by market segments to identify

strengths and weaknesses in the different areas of sales. Sellers of Coca Cola products vary

from major retail supermarkets to small corner stores. This gives the products maximum

exposure to customers at their convenience.

ii. Market Share Analysis

Market share analysis compares Coca Cola’s business sales performance with that of its

competitors. Coca Cola looks to increase its market share by over 60%. With the changes Coca

Cola is currently undergoing, they aim to regain an iron fist control of the market. Target market

various age groups and lifestyles from high school students too universities, and male or

female.

iii. Marketing Profitability Analysis

This analysis looks at the cost side of marketing and the profitability of products, sales

territories, market segments and sales people. There are three ratios to monitor marketing

profitability; they are market research to sales, advertising to sales and sales representatives to

sales. The results of these three tools can help Coca Cola determine any emerging trends, such

as the need for a different product. Comparing these results with actual results gives the

business an idea on when to change.

iv. Market Research

When attempting to implement a new Marketing plan a business must address its target

market and conduct the relevant information to insure the new marketing plan both differs from

the old and is better for the business. When conducting market research a business must first

define the problem and then gather the appropriate information to solve the problem. There are

3 types of information a business can gather to solve its problems.

->Exploratory Research which clarifies the problem and searches for ways to address it.

->Descriptive Research is used to measure and describe things like the market potential for a

product and characteristics of the target market.

->Casual Research is used to test a hypothesis about a cause and effect relationship.

Coca Cola through its market research has addressed all three types of research to define the

problem raised by shareholders and gathered information to serve their needs.

Factors Influencing Consumer Choice

When making decisions on products a business must look at factors that influence

consumer choice such as psychological factors, Socio-culture factors Economic factors and

Government Factors.

Psychological Factors:

Such as motivation, perception, lifestyle, personality and self concept, learning, and

attitudes influence the consumer’s behavior towards a product and Coca Cola has addressed

this issue by introducing Diet Coke to satisfy different lifestyles.

Socio-cultural factors:

Such as culture, subculture, socio-economic status, family and reference groups

influence the consumer’s behavior towards a product.

Economic factors:

Such as Disposable income and discretionary income. Coca Cola has addressed this

side of the influence by maintaining a low price on the price of its products.

Government Factors:

Such as new regulations, inflation, interest rates all influence consumer spending and

choice.

Conclusion

Akij Group is one of the fastest business conglomerates in Bangladesh. Akij Group growth is

day by day increase and it Coverage: Around 90% of Bangladesh based on the Annual Report-

2008.The company of Akij Food and Beverage has a product line of almost all the types of drink

and snacks. We made an inquiry regarding customers find solution for meeting the need of

lemon flavored clear carbonated beverage within Clemon’s target range the percentage is very

good. It has not been long since Akij group brought out Mojo and Lemu. They have already

gained huge popularity. The recent success of Akij group is Frutika, which delivers the promise

of no preservatives.The Group has plans for setting up more projects. The projects are already

in pipeline. Foreign investors have shown keen interest in joining with us for joint ventures. The

matter is under our active consideration and will hopefully soon mature. This will also help the

nation's economy growth and will create job opportunities to various professionals.

Akij Group is also involved in socio-cultural activities. The Group has been operating a sizeable

orphanage free of charge in district town. The Group has also acquired a modern mother &

children hospital previously owned by Save the Children (UK). The hospital is being operated as

a non-profitable concern. But the company needs to be more concerned about society and

environment. Because Industries are most responsible for pollution that could occur harm for

environment. And AFBL also need to be involved with more social event. Because have the

resources necessary to solve the social problems as many business organizations often have

surplus revenues.