Farmers’ Own Milk Marketing Mix Analysis
Executive summary This report analyzes and evaluates the marketing mix of Farmers’ own milk. Farmers’ own milk is a product of the Woolworth stores. The market mix analyzed in this report includes price, product, place, promotion partnership, and process, people, and Physical evidence. The finding of the report shows that generally, the farmers’ own milk has a robust marketing mix which has worked for it in the past. However with the changing dynamic in the industry includes price competition, the product marketing mix need to be reviewed and improvement. This report provides a number of recommendations on how to improve the product’s marketing mix. The recommendation includes Switch from price leadership strategy to cost-plus pricing strategy, combining emotional and factual appeal in it promotional campaign, Improves the product physical evidences especially in the online platform, and improves on its partnership especially those of public interest. The company The company of interest in this assessment is the Woolworth. Woolworth is a grocery store chain in Australia. The company specialize in selling groceries which include vegetables, fruit, meat and other packaged food product. The company also do sell other product including DVs, stationery among others. The company has 980 stores which operate across the Australia Product and consumers The product of interest for this assessment will be the Woolworth’ farmers, own milk product. This is a product that target the household consumers Analysis In this section of report, analysis of the 8 Ps of marketing for farmers’ own milk product will be conducted.The Product
Woolworth offers wide range groceries products. However, the product item of interest in this assessment will be the farmers’ own milk Product category As pointed out by Kumar & Meenakshi (2011), there are two major categories of product i.e. Business product and consumers product. Business products are those that are manufactured and sold to other businesses. On the other hand, consumer products are those products sold to a person or household for non-business purpose. Farmers’ own milk fall into the consumer product category since in it sold to individual for direct consumption. There are various subcategory of consumers’ product which includes Shopping product, speciality product, convenience product and unsought product. Farmers’ own Milk qualifies as a convenience product. Convenience product is one that is routinely purchased, take less thought and appeal to the general market (Pride, Hughes & Kapoor 2009). Product lifecycle As mentioned by Kumar & a typical product usually progress through a sequential of stages which are introduction, growth, maturity and Decline. All these sequences are known as product lifecycle. Currently, Farmers’ own Milk is at the growth stage. Growth stage is one where the sales are on the rise. In 2015, the sale of farmers’ owns milk double and the trend is expected to continue for next few years (Locke, 2015). The growth stage is also characterized by increased profit margin, competitors and price competition (Kumar & Meenkashi, 2011). All these characteristic are clearly visible in the Farmers’ own milk market. For instance, a numbers of competitors have entered the market including SADA among other. The major players have also started to compete on the basis of the price forcing the milk price to reduce even further (Locke, 2015). Product quality Product quality refers to the ability of a product to meet or exceed the expectation of the consumers in a consistent manner (Kolter, 2012). For instance, Coke is regarded as quality product because of its ability to quench people’ thirsty whenever taken. In a similar manner, farmers’ own milk is designed to meet the nutrition and consumption needs of household. Product packaging Farmers, own milk is packaged using plastic bottle. Plastic bottle is a cost effective option for the Woolworth. In addition, it is also environmentally friendly as the bottles are 100 percent recyclable (Hopewell, 2009 ). The product packaging also involves a logo. Farmers’ own Milk has an icon logo that is eye catching as well as different from those of competing products. This is crucial for product differentiation as well as brand recognition (Kolter, 2012). In their packaging, the company also provide a food label. This is a legal compliance with an Australia law which apply to all food related product manufacturer and seller. Product evaluation The farmers’ own Brand is now well recognized and this is contributing to the increase in sale. The product possess high consumer preferences and this is evident by it success in the market. The product packaging has also created a desire perception as well as contributing to environmental conservation since the plastic used is 100 percent recyclable.Price
Pricing strategy As stated by Crane (2012), there are variety of pricing strategies that a business can use to sell it product and services. Pricing is one component of marketing mix which is used to achieve variety of objectives such as profit maximization from each unit sold or entire market, to increase market share, to defend existing market share etc. Some of the most common Pricing strategy includes Skimming, penetration, Premium pricing, price leadership, cost-plus pricing among others (Crane, 2012). Due to the price competition in the market farmers’ own milks use cost leadership pricing strategy. Cost leadership pricing strategy is where the company try to be the most efficient in the market in order to offer product at the lowest price (Kolter, 2012). Pricing strategy fit to the company overall strategy As discussed above, farmers’ own milk uses the economy pricing strategy. This strategy is in line with the company overall strategy of providing variety of grocery products at afford price/cheap price. Price evaluation While the cost leadership pricing strategy used have helped retain customers, intensity of the current war price is likely to make it unprofitable. In addition, the pricing has also been criticised for contributing to the current woes faced by dairy farmers. There is a general sentiment that the low cost charged for farmers’ own milk has led to the decline of daily farmer return (conlagelo, 2016).Place
Channel and intermediary As asserted by Pride et al (2009) most of the company dealing with fast moving consumer goods usually use a long distribution channel with a number of intermediaries involved. However, Woolworth is an exception when it comes to distribution of it farmers’ own milk product. The company collect the milk directly from the farmer, it then process and packages before it distribute the products to its 980 stores across the Australia ready for sale. Channel Utility As mentioned above, the distribution of the farmers’ own milk product does not Involves any intermediary. Lack of the intermediary in the distribution of this product eliminates unnecessary costs which are usually imposed or associated with intermediaries. This goes a long way in help Woolworth be able to sell the Farmers’ own milk at an affordable price. Place evaluation Farmers’ own milk brand is directly affected by where the product is sold. The use of the Woolworth’s 980 stores ensures the product reach the intended customer in a convenient way. In addition, Woolworth website also allows people to shop for the product conveniently. In other word, the place as used for farmers ‘own milk create conveniencePromotion
Promotion is described the act of raising customer awareness about a product with the aim of generating and increase sale as well as building brand loyalty (Kolter, 2012). Finding the right promotional mix can have greater positive impacts on a product including improved sale, brand loyalty and equity (Kolter, 2012). In it promotion, Farmers’ own milk uses the integrated marketing communication strategies. Integrated marketing communication is a promotional concept where all the channels of communication available are linked together so as to work in harmony. Farmers’ own milk integrated marketing communication involves a numbers of channels which include social media, sales promotion, Public relation and advertisement. Message Appeal When trying to convince customer to purchase a product, business uses various message appeal techniques. Farmers’ own milk use emotional appeal to convey their product meaning to the public. Emotional appeal is defined as the use of message that contains humour, excitement, sentiment, Love, affection, self –esteem among others to communicate product meaning (Lwin, 2009). Promotion evaluation While Farmers’ own milk has robust promotional mix in place, the message appeal of the mix fails to address the issues in the public domain in regard to the product such as Diary farmer exploitation by the company.Process
In the context of marketing, process is seen as a mean to deliver value to customers. Process is very important in ensuring the delivery of quality services and product. It is also important in improving consumers buying experiences. A poorly designed process result to bad buying experience and bad exposure as well (Lovelock & Wirtz, 2007). Farmers’ own milk process involves getting the milks from the farmers, processing it and then making it available for sale across it 980 stores as well as through it online platform i.e. the website. This process ensure the farmers ‘own milk do reach the consumers when it is stills fresh and in a convenient way. This goes a long way in creating very positive customers’ buying experience for the product.Physical evidence
Physical evidences refer to the cues that exist in the physical environment where a product or services is being sold which help one evaluate the product or services before making the purchase decision (Lovelock & Wirtz, 2007). The physical evidences do have strong impacts on consumers’ perception about the products as well as the purchase decision. For instance, when looking for a food joint, physical evidence such as the cleanliness of the tables, waitress and utensils influences not only the perception about the joint but the decision to eat on it or not. In a similar ay, Physical evidence is crucial for farmers’ own milk. In this case, physical evidence include the cleanliness of the stores, plastic where the milks is packed, the attitude of staffs in the stores among others. Woolworth has tried to provide these physical evidences. The stores where farmers’ own milk are sold are always need, the product packaging is always clean and the attitude of it employees are generally positive Physical evidence evaluation While the Woolworth has tried to provide all the physical evidence needed to facilitate the sale of farmers’ own milk more can be done. More physical cues can be provided by improving the company website and online presences so that customers can have more trust with the product.People
As pointed out by Jones (2016), the front-line staffs do strongly impacts on customer perception and experiences. It is therefore important to have staffs that are well skilled and behaved. For instance, a good meal may not be seen to be delicious if the person serving it lacks courtesy, or maybe dirty. In a similar fashion, the perception and customers experience people have with farmers’ own milk is directly influenced by the personnel. To ensure it staffs behave well as well as possess the required skilled to serve customers better, Woolworth has its own registered training organization (RTO) which design and facilitate internal training programs for Woolworth employees. People evaluation Woolworth, the company behind Farmers’ own milk product has a robust internal talent development program run by its own registered training organization (Service Skills Australia, 2016). Despite these training programs playing crucial role in improves front-line staffs behaviour and knowledge on how to related to customer and improves customer experience, almost all of the training in Woolworth are done internally , making it easier for the employees and trainer to lose touch with the industry.Partnership
Strategic partnership has become integral in the marketing mix. The need for partnership has arises due to the fact that customers’ needs for products may exist together. For instance, Customer maybe in needs of flight services after which he will require tax services to take them to restaurant. In this case, three need exist together but offer by different provider and as such the need can be better met through partnership between flight services provide, taxis service provider and the restaurant. In a similar fashion, the consumers needs for fresh quality milk can only be met through partnership. Customers need fresh milks which can only be available from farmers. Secondly, they need the milks in a convenient place and finally they need the milk packaged in a safe manner. This is why partnership has been an important part of farmers’ own milk. The company has partnered with farmers who supplier it with quality fresh milk. In addition, it has also partnered with another milk processing and packaging company called Parmalat that process and pack the milk for Woolworth. Partnership evaluation The partnership between Woolworth, farmers and Parmalat has been crucial in ensuring farmers’ own milk product is available where needed by customers, is packaged in safe way and is the best quality. Despite the partnership between being crucial in ensuring the final product i.e. farmers own milk appeal to the customers, question has been raised in regard to the partnership between Woolworth and farmers. Woolworth has been accused of exploiting the dairy farmers as what the company pay the Dairy farmers is far less that what it gets from the milk (Carmody, 2016). Recommendation While farmers’ own milk has put in place a robust marketing mix, more can be done to enhance this marketing mix. Based on the analysis and evaluation of farmers’ own milk done in this assessment, this section will provide some recommendation to improve the product marketing mix.Product
The product concept adopted by farmers’ own milk has so far worked in its favoured. While doing the analysis of this product there are no negative issues that come out. As such it is recommended that the company continues to use the same product concept.Prices
While the pricing strategy used by the Farmers’ own milk is in line with it overall strategy, this pricing is likely to become unprofitable if the war price currently experienced continues to intensify. In addition, the pricing strategy as currently used has been criticised on the ground that it is killing the dairy industry. If this criticism persist, it is likely to have negative impact on people perception toward the product. The company should therefore review it pricing strategy. It would be better to use the cost-plus pricing strategy as this will ensure profitability is guaranteed while at the same time allowing fair remuneration to dairy farmers.Place
While analyzing and evaluating the distribution network of farmers’ own milk, there are no issues that come out. In fact, it was noted that the current distribution is very efficiency as it eliminate intermediaries. This has help keep cost down translating to affordable price to customer. It was also noted that the current distribution network make it convenient for customers to access the product hence contributing to positive buying experience. It is therefore recommended in this paper that, the currently distribution/place continued to be used.Promotion
While the company has tried as much as possible to promote the farmers’ own milk product, much more can be done to increase sale and product awareness event further. This paper recommend that Woolworth should stop relying only on emotional appeal on it promotional campaign to convey the product meaning. It should use a combination of factual appeal and emotional appeal to do so. As noted by Lwin (2009), the factual appeal provide consumer with informative information that give them greater ability to assess the product not based on hearsay but based on facts. In the case of farmers’ own Milk product, the factual appeal element in the promotional campaign would help provide factual information related to the product such as the detail of the partnership with farmers etc which would in the long run help prevent bad perception against the product that is likely to be created by the persistent criticism in regard to dairy farmer exploitation.Physical evidence
While the company has tried as much as possible to provide physical cues such as ambient environment, friend staffs, refrigeration facilitates for the milks etc top facilitate the sale of farmers ‘own milk , Much more can be done especially on the online platform. As pointed out by Jones (2017), the website and other online platform also form part of the physical evidence and as such they must be designed and presented to customer in a way that is appealing and convincing. Woolworth therefore need to put extra effort in ensuring the website and social media pages such as facebook, fan page where farmers’ own milk is displayed look better and more convincing.Process
The current process as used by farmers’ own product is working well for the product. It not only helps ensure convenient shopping but also ensures freshness of the product at all time. This paper therefore recommended that the current process should be retainedPeople
While analyzing the Marketing mix for farmers’ own milk, it was noted that there is a strong talent management. However, it was noted that the staffs training program are entire entirely internal and this make it easier for the staffs to lose touch with the industry. This paper recommended that as part of it talent management, a combination of both internal and external training program should be used. Internal programs will help understand internal process, procedure culture etc better. On the other hand, the external training will ensure the employees are always in touch with contemporary issues in the industry.Partnership
Woolworth has entered to very strategic partnership in regard to farmers’ own milk. This partnership involves farmers as well as milk processing company. Generally speaking, the partnership has played crucial role in ensuring Farmers’ own product is derives value to customers. However, some of this partnership has raised questions. For instance, the partnership between Woolworth and farmer has been question with other terming it as exploitative to dairy farmers. These issues can damage the reputation and people perception toward the product. This paper recommends that where the partnership entered is of public interest the company should put the detail of such partnership into public domain. It should also try to create a win-win situation for parties involved. Conclusion This report has analyzed and evaluates the marketing mix for the Farmers’ own milk, a product of Woolworth. The analysis has shown that while the 8P’s of the marketing mix for the product are well addressed, there is a room for improvement . The paper has made a number of recommendation which including switching from cost leadership pricing strategy to cost-plus- strategy use of both factual and emotional appeal in the promotional campaign, using both internal and external training to address the people component of the marketing mix as well as ensuring win-win situation for all partnership. The implementation of this recommendation will definitely lead to improvement in sales, brand awareness, positive brand reputation as well large market share.