Boolaky Vidoushee Govinden Sara Dosemahamed Sufyaan Jeebun Laxmi Natasha Beelatoo Vikash
0510646 0514538 0510158 0513644 0511524
MANAGEMENT WITH INFORMATION SYSTEMS
Marketing Fundamentals [MGT 1203]
Low-CalorieFrozen DessertsMarket Lecturer: Miss M. Gungaphul
Number of words: 1999
Date: 27 April 2006
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Low Calorie Frozen Desserts Market
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ACKNOWLEDGEMENT
Third Party Contributions. I, the undersigned person, express my heartfelt thanks to all those who have taken the time to fill in the market research questionnaire. Special thanks also go to Miss Mridula Gungaphul, our Marketing Fundamentals [MGT 1203] module lecturer, who has been very kind enough to help us cross certain hurdles that came on our way.
A constructive conflict characterised team. Moreover, it is often said that group work is characterised by conflicts, which may be constructive or destructive. However, in my capacity as team leader, I would like to point out that no so-called “destructive conflict” has been noted as every one contributed his or her part of the work to be done and, to be underlined, even though ideas generated from team members were thoroughly analysed and criticised so as to retain the best.
Hard-working team members. “Un travail de fourmie”… That is definitely how one would be most inclined to qualify the work done by my team-mates in view of the enormous research work that was conducted to complete the assignment. Their enthusiasm, dynamism, perseverance, persistence and determination are what actually made the assignment possible. Hats off to them!
Vikash Beelatoo Team Leader ________________________________________________________________________________________________ ©2006
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TABLE OF CONTENTS Page Acknowledgements
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1. Introduction
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2. Demographic Trends a. Ageing Population
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b. Increase in Literacy Rate
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c. Consequent Changes in Income Groups
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d. Changes in Family Structure & Household Patterns
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3. Impact on the 4Ps a. Product
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b. Price
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c. Promotion
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d. Place
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4. Adjustments in Marketing Programme a. Product
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b. Price
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c. Promotion
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d. Place
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5. Conclusion
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Bibliography
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Appendix 1 [Market Research Questionnaire]
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Appendix 2 [Statistics from Central Statistics Office]
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1. INTRODUCTION Not very long ago, people did not pay much attention to their waistlines. So-called ‘lowcalorie frozen desserts’ were practically unheard of. However, medical studies on obesity, its repercussions in terms of other health problems, and the very high and ever growing percentage of the population ‘suffering’ from an expanding waistline, opened a gap in the market, providing for the emergence of low-calorie frozen desserts. Today, there is a mind-boggling variety of products sold bearing the adjectives: light/ lite, lean, healthy, low-calorie, low-fat, low cholesterol, etc. “Low-calorie frozen desserts, now considered as the dinosaur of weight loss strategies, are being hailed as the cure-all for expanding waistlines.” [Low calorie diets: http://www.foodnetwork.com/]
To understand the nature of the emergence of low-calorie frozen desserts, it is important to dig deep into the demographic trends of Mauritius. Such demographic trends can be categorized as: •
Ageing population
•
Increase in literacy rate
•
Consequent changes in income groups
•
Changes in Family Structure & Household Patterns
Such changes would have a not-to-be-neglected impact on the marketing mix of the lowcalorie frozen desserts manufacturer, and based on this, appropriate adjustments would have to be made in its marketing programme to remain competitive in the local market. The demographic trends, their impact upon the 4Ps constituting the marketing mix and relative adjustments are going to be considered in the chapters that follow. ________________________________________________________________________________________________ ©2006
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2. DEMOGRAPHIC TRENDS (a) Ageing Population Without any qualms, the population of Mauritius has been experiencing a steady growth over the years. However, the curse of an ageing population seems to be striking many countries, irrespective of their level of development nowadays and Mauritius is no exception to the list of such countries. According to a report published by the Central Statistics Office, the percentage of old age group (60 years and above) on total population has been experiencing a constant growth 9.2 % in 2003 to 9.4 % in 2004 [See Figure 1 in Appendices]. The same old age group percentage is expected to culminate in a recordbreaking 20.3 % by the year 2029 [See Figure 2 in Appendices], thereby showing the extent to which the population of Mauritius is greying over time. It can, without any doubt, be said that the ageing population has been the result of an improvement in health facilities in the country accompanied by an increased concern about health.
(b) Increase in Literacy Rate Despite the fact that the Central Statistics Office provides no figures for literacy rate in Mauritius for the years 2002 and 2003 [See Figure 3 in Appendices], yet, the 2000 Population Census, coupled with the recent educational reforms, suggest that the trend in literacy rate is towards an increase [From 80.8% in 1990 to 85.0% in 2000]. It can even be said that the Government of Mauritius is paving the way for 100% Literacy Rate in Mauritius in the years to come. This would, without any qualms, make people lay more emphasis on physical appearance and beauty, and focus more on the long-term rather than the present [Health Consiousness].
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2. DEMOGRAPHIC TRENDS [Continued…]
(c) Consequent Changes in Income Groups The increase in Literacy rate would naturally imply changes in income groups as well, with an increase in the concentration of high-income groups as well as middle-income ones, as shown in Figure 4 in the Appendices. Again, this would bring an increased concern for esthetic matters, with regards to both the product as well as the physical appearance. Furthermore, it can also be said that purchasing power of the population is on the increase, and therefore, less reticence in paying for high prices for products of high perceived value.
(d) Changes in Family Structure & Household Patterns The percentage of the so-called ‘traditional households’ are decreasing in the Mauritian context. Instead, non-traditional households with single live-alones and adult livetogethers are more common. Instead of ‘extended’, the order of the day is ‘nuclear’. This accounts for the decrease in the average household size over the years [See Figure 5 in Appendices]. Moreover, there has been a blending of male and female roles, where both of them contribute towards the total household income, and both the husband and wife, and even the children have a say when purchasing products. As an aftermath, family shopping is the trend that is being observed. [Adapted from: statistics from Central Statistics Office’s Website]
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Govinden S. 0514538
Dosemahamed M.S. 0510158 Jeebun L. 0513644 Beelatoo V. 0511524
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3. IMPACT ON THE 4Ps
From the above mentioned facts, it can be said that the Mauritian people are becoming more conscious about their health and waistlines. Indeed such a trend, coupled by other demographic trends described previously, will affect the 4Ps of the marketing mix, as described below:
(a) Product A product is a bundle of tangible and intangible attribute that a seller offers to a potential buyer to satisfy the buyer’s needs and wants. The recent trends in the age mix of the population [ageing population] and an increased health awareness among the ever-growing literate population implies that low-calorie frozen desserts is a potential product that the Mauritian people are likely to consume. It offers as its core product the benefits that health and fitness concerned people are seeking. However, the actual product will be affected given that the population is said to be diverse when we consider the cultural factors, social factors (inclusive of income), personal factors and psychological factors. Added to this, is the changing family structure towards nuclear families and a greater emphasis on a so-called ‘family-shopping’. All these factors when combined will not require a change in the core product but the actual product will need to be differentiated in order to target a larger market group. Furthermore, with an increased literacy rate, people are less rooted to traditions and customs, and ‘change’ is the order of the day. As an aftermath, product life cycles are becoming shorter and shorter over the years.
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3. IMPACT ON THE 4Ps [Continued‌]
(b) Price Price is the amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service. Price is a very important element of the marketing mix since it is the only one among the 4Ps that generates revenue for an organization. Therefore, it is a vital for the local manufacturer of low-calorie frozen desserts to quote the right price for its product. It has been noted that consumers will pay for a product if they consider its utility worth it and that the product meets their expectations. Therefore, the price placed on the product will determine its consumption in a way or another. Since the low-calorie dessert reflects the needs and wants of the health and fitness conscious people among the ageing as well as literate population, a price based on its perceived value must be quoted for the product [Customer-based Pricing]. It can also be said that more people will be willing to pay the price for the perceived value due to an improvement in the income groups, as had earlier been mentioned. The changing family structure, whether live-alones or nuclear families whereby all members have a say in all household decisions, will also have an impact on price as, for instance, women (who, nowadays, also work and contribute towards household income) are no more dependent on their husbands (traditionally the only one to work in the family) to purchase a product of their choice. The converse might also be true.
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3. IMPACT ON THE 4Ps [Continued‌]
(c) Promotion Promotion is communication with individuals, groups, or organisations to directly or indirectly facilitate exchanges by informing and persuading one or more audiences to accept an organisation’s products. Good communication to customers about low calorie desserts is essential since poorly informed customers will not be aware of its existence, attributes and benefits. Moreover, psychological factors at play would result in each and every individual not interpreting the message in the way that it should be. Messages that the sender wants to send is often misinterpreted by the receiver. For instance, the advertising for a particular brand of lowcalorie yogurt in Mauritius often highlights the product as being for women only in the minds of people, due to the presence of only a woman in the advertising. What, when and how to communicate about the low-calorie desserts is also an important consideration in promotion with regards to the changing population structure in terms of age, literacy and income, as well as the changing family structure.
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3. IMPACT ON THE 4Ps [Continued‌]
(d) Place Place is the physical distribution channel that makes a product available in the market. Given the ongoing demographic trends, the choice of distribution of the low-calorie frozen desserts must not be restricted as the product is not accessible to everyone. Different types of people will like to purchase the product in different places, different areas and from different people, for instance from retailers or the manufacturer itself. It is evident that health conscious people would have preferred to purchase such low-calorie products, in this case, low-calorie frozen desserts, from specialized shops dealing in health and fitness matters, so that more specialized information can be obtained on health repercussions from consumption of such products. In addition, the improvement in income groups, with more and more high and middle income earners, as seen in Chapter 2 Demographic Trends previously, suggests that supermarkets and hypermarkets also constitute of such places where people forming part of such income groups prefer to make their household purchases, with low-calorie frozen foods evidently forming part of that particular basket of goods.
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4. ADJUSTMENTS IN MARKETING PROGRAMME
(a) Product It has earlier been said that product life cycles are becoming shorter and shorter. This implies that continuous modifications, particularly when reaching maturity stage, would have to be made to the product, in this case low-calorie frozen desserts, so that the local manufacturer can sustain its market share. Hence, greater investments need to be made in terms of research and development to continuously improve the low-calorie frozen desserts, not only at the core level, but also at the actual and augmented levels. In addition, the diversification in age mix of the population and different needs of specific groups (age, income or type of family structure), both provide a basis for market segmentation. In other words, the same low-calorie frozen desserts can be differentiated, inclusive of packaging modifications, to suit the different needs of particular groups.
(b) Price It is a fact that specialised products such as low-calorie frozen desserts would bear a higher price tag than so-called ‘normal’ frozen desserts, which are usually high in calorie. However, there seems to be some kind of paradox in this, because although people have a high perceived value of the product, yet they are unwilling to go that extra mile to pay for a higher price for the low-calorie frozen desserts. This implies that it would be preferable for the local manufacturer to shift from a customer-based pricing strategy to either a costbased or even a competition-based pricing strategy.
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4. ADJUSTMENTS IN MARKETING PROGRAMME [Continued‌] (c) Promotion Appropriate adjustments need to be made to the promotional mix as well. It has earlier been said that the advertising for low-calorie yogurt gives the impression that it is intended only for women, when it should not have been the case as health and fitness concerns everyone, irrespective of gender or age. To remedy the situation, advertising promos targeting not only women, but also men, children and the whole family should be made. Personal selling, although relatively costly as compared to other methods of promotion, can be adopted due to the specialised nature [health and fitness matters] of the low-calorie frozen desserts. Personal interaction involved in personal selling would ensure a special bond between the seller and the buyer. The local manufacturer also needs to organise sales presentations so as to put into value the health and fitness related benefits of low-calorie frozen desserts. Forms of public relations and publicity such as seminars and demonstrations would also give a great boost to the sales figure of lowcalorie frozen desserts. Direct marketing, in the form of direct response or even online, would also help to give a special boost to the sales figure.
(d) Place Place is another component in the marketing programme which should not be neglected. The restricted market for low-calorie frozen desserts needs to be more opened. Such types of frozen desserts need to be made available in more and more retail outlets, inclusive of supermarkets and hypermarkets. The local manufacturer also needs to have its own outlet with staff having relevant experience in health and fitness matters.
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5. CONCLUSION
To conclude, it can be said that demographic trends and changes in family structure certainly have an impact upon the 4Ps of the marketing mix of the low-calorie. With these impacts in mind, appropriate recommendations have been made for the local manufacturer of low-calorie frozen desserts to make adjustments to its marketing programme, as has been previously discussed.
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BIBLIOGRAPHY
Reference Books: 1. Harper W. Boyd et.al. 1998, Marketing Management- A strategic Approach with a Global Orientation, McGraw-Hill Companies, USA 2. Philip Kotler & Gary Armstrong 2006, Principles of Marketing, Prentice Hall, USA 3. Philip Kotler & Kevin Lane Keller 2006, Marketing Management, Prentice Hall, USA 4. Graham Hooley et.al. 2004, Marketing Strategy and Competitive Positioning, Prentice Hall, Great Britain 5. Cravens et.al. 1994, Marketing Management, All India Traveller Bookseller, India
Websites: 6. Demographic trends statistics [CSO]: http://statsmauritius.gov.mu 7. Low calorie diets: http://www.foodnetwork.com/
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Appendix 1
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Market Research Questionnaire Section A 1. (a) Do you buy Low Calorie Frozen Desserts? 1
2
Yes
No
(b) If yes, specify reason why you purchase it. ____________________________ 2. How many do you buy in a period of 1 week? 1
0
2
Less than 3
3
3-7
4
More than 7
3. How much importance do you give to low-calorie frozen desserts? POOR
1
2
3
4
5
EXCELLENT
4
5
EXCELLENT
4. Are such products easily found? POOR
1
2
3
5. How much affordable do you think these products are? POOR
1
2
3
4
5
EXCELLENT
6. Assure you are to choose between a low-calorie dessert and a ‘normal’ one, how would you rank the following as far as the low-calorie dessert is concerned? POOR
(a) (b) (c) (d)
Taste Packaging Texture & Attractiveness Size
1 1 1 1
2 2 2 2
EXCELLENT
3 3 3 3
4 4 4 4
5 5 5 5
6 6 6 6
7 7 7 7
7. Do you think low-calorie desserts are low enough in calorie for you to consume? 1
Yes
2
No
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Market Research Questionnaire [Continued‌] 8. How far do you agree that the actual value of low-calorie frozen desserts is equal to its perceived value? 1
Totally disagree
2
Disagree
3
Agree
4
Totally Agree
5
No Opinion
9. What do you think of low calorie frozen desserts? __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ 10. Where do you usually buy these products? _______________________________ 11. Any other comments: __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________
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Market Research Questionnaire [Continued‌] Section B 1. Indicate your gender: 1 Male
2
Female
2. Age group: Under 15
1
Between 15 and 59
2
60 and above
3
3. Family Composition: 1
Nuclear
2
Extended
3 4
Single Parent Bachelor
4. Occupation: 1
White Collar
2
Blue Collar
3
Student
4
Retired
5. Income Group 1
Less than Rs. 3000
3
Rs. 5000-10000
2
Rs. 3000-5000
4
More than Rs. 10000
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Appendix 2
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Statistics from Central Statistics Office
Figure 1: Population Composition by age and gender from 2000 to 2004
Figure 2: Projected Population Composition by age and gender up to 2029 ________________________________________________________________________________________________ Š2006
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Statistics from Central Statistics Office [Continued‌]
Figure 3: Literacy Rate
Figure 4: Trends in monthly household income distribution
1990
2000
Figure 5: Single live alones and average household size
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