An Evaluation of Product Positioning Strategies for Marketing Indomie Breakfast Noodles
Chapter One
Objectives of the Study
General Objective
The general objective of the study is to assess the Product positioning strategies of the Indomie Breakfast Noodle
Specific Objectives
The specific objectives are:
- To identify the company’s positioning strategies that will appeal to the target market.
- To investigate how the company strategically positions and segments the market to achieve its objectives.
- To identify problems encountered in the marketing strategy implementation Indomie Breakfast Noodle and to give recommendations.
- To investigate the practice used in evaluating and reviewing the strategic marketing documents.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Theoretical Literature
Marketing Strategy Overview
Strategy is originally a Greek word coming from the military origins. Nowadays this word is usually defined on two levels. First as general description: a careful plan or method or an adaption that serves or appears to serve an important function in achieving evolutionary success and second as its realization: the art of devising or employing plans or stratagems towards a goal, or a variety of or instance of the use of strategy “or a plan of action resulting from strategy or intended to accomplish a specific goal. (Ludikova, 2008) If an organization is to have any chance of reaching its goals and objectives, it must have a game plan or road map for getting there. A strategy, in effect, outlines the organization’s game plan for success. Effective marketing requires sound strategic planning at a number of levels in an organization. (Ferell and Hartline, 2010) As
Varadarajan (2010) defined that, Marketing strategy refers to an organization’s integrated pattern of decisions that specify its crucial choices concerning markets to serve and market segments to target, marketing activities to perform and the manner of performance of these activities, and the allocation of marketing resources among markets, market segments and marketing activities toward the creation, communication and/or delivery of a product that offers value to customers in exchanges with the organization and thereby enables the organization to achieve specific objectives.
Elements of marketing Strategy
In order to achieve the marketing objectives, we need to have a strategy that includes different elements. Here there are four major elements that are used in the literature to explain the detail of marketing strategy. These are the Target market, Segmentation, Positioning and the marketing mixes (Roger Brooks bank, 1994).
Segmentation
At its most basic level, the term “market segmentation” refers to subdividing a market along some commonality, similarity, or kinship. That is, the members of a market segment share something in common. The purpose of segmentation is the concentration of marketing energy and force on the subdivision (or the market segment) to gain a competitive advantage within the segment. As ferell and Hartline (2011) stated that, many firms today take segmentation to the extreme by targeting small niches of a market, or even the smallest of market segments: individuals.
Traditional Market Segmentation Approaches
According to Ferell and Hartline (2011) writes that many segmentation approaches are traditional in the sense that firms have used them successfully for decades. Some organizations actually use more than one type of segmentation, depending on the brand, product, or market in question.
Mass Marketing– It seems odd to call mass marketing a segmentation approach, as it involves no segmentation whatsoever. Companies aim mass marketing campaigns at the total (whole) market for a particular product. Companies that adopt mass marketing take an undifferentiated approach that assumes that all customers in the market have similar needs and wants that can be reasonably satisfied with a single marketing program.
This marketing program typically consists of a single product or brand (or, in the case of retailers, a homogeneous set of products), one price, one promotional program, and one distribution system. Mass marketing works best when the needs of an entire market are relatively homogeneous.
Differentiated Marketing– Most firms use some form of market segmentation by dividing the total market into groups of customers having relatively common or homogeneous needs, and attempting to develop a marketing program that appeals to one or more of these groups. This approach may be necessary when customer needs are similar within a single group, but their needs differ across groups.
Niche Marketing Some companies narrow the market concentration approach even more and focus their marketing efforts on one small, well-defined market segment or niche that has a unique, specific set of needs. Customers in niche markets will typically pay higher prices for products that match their specialized needs. (Ferell and Hartline, 2011)
According to Ferell and Hartline pointed out that, although markets can be segmented in limitless ways, the segmentation approach must make sense in terms of identifiable, substantial, accessible, responsive, viable and sustainable criteria.
Segmenting Consumer Markets
Consumer markets can be segmented on the following customer characteristics.
Geographic Segmentation
Geographic segmentation divides the market into geographical units such as nations, states, regions, counties, cities, or neighborhoods. The company can operate in one or a few areas, or it can operate in all but pay attention to local variations. In that way it can tailor marketing programs to the needs and wants of local customer groups in trading areas, neighborhoods, even individual stores. In a growing trend called grassroots marketing, such activities concentrate on getting as close and personally relevant to individual customers as possible. (Kotler and Keller, 2012)
Demographic Segmentation
In demographic segmentation, Kotler and Keller divide the market on variables such as age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality, and social class. One reason demographic variables are so popular with marketers is that they’re often associated with consumer needs and wants. Another is that they’re easy to measure. (Kotler and Keller, 2012) Age and life-Stage segmentation deals with segmenting the market by age group like people less than 12 years old. Family life cycle segmentation provide for the market to be segmented into segments that are related to the change in pattern of consumption as a person passes the life cycle like adolescent to young adult or bachelor to married person. Gender segmentation is to segment the market in term of sex whether male or female. Income, education and Occupation segmentation deals with the segmentation of the market by the salary earned, level of education and work of the customers. Religion, race, generation, nationality, and social class segmentation segments the market into group of customers having specific social background. (Nasit, A, 2011)
CHAPTER THREE
RESEARCH METHODOLOGY
Research Design
Research designs are plans and procedures for research that span the decisions from broad assumptions to detailed method of data collection and analysis (Creswell, 2009).
This study design is to identify the marketing strategy of Indomie Breakfast Noodle that is implemented currently so the research method is descriptive studies. To undertake this study, a case study design was employed by using both qualitative and quantitative approaches in order to obtain the desired results of the company and to explore detailed evidence about the problem. A descriptive study attempts systematically to describe a situation, problem, phenomenon service or program or provides information about say, the living condition of community, or describes attitude towards an issue (Kumar, 2011). Thus, designing the research as descriptive which is dominantly qualitative is deemed to be most appropriate and analyzed by using both qualitative and quantitative to clearly describe the detailed evidence about the facts on the ground.
Target Population, Sample Size and Sampling Technique
The target population of the study involved the managers and employees of the marketing department in marketing indomie breakfast noodle who have a direct exposure to the marketing activity. The Sales and marketing department of Indomie Breakfast Noodle is structured as Sales Department and there is a Marketing department. There are front line Staffs who carry out the day to day marketing activities of the company.
As per the up-to-date employee data base of the company, there are about 46 marketing staff, 1
National Sales Manager (NSM), 1 Trade Marketing Manager (TMM), 8 Regional Sales Managers (RSM) and the remaining are Area Sales Managers (ASM) and Trade Marketing Officers. The selection of the respondents has been carried out by using purposive sampling research method because other departments were not included as they didn’t have direct relationship with marketing strategies formulation or implementation. The researcher also took all the respondents of marketing staffs as a total population of the study fully through census.
CHAPTER FOUR
DATA ANALYSIS AND PRESENTATION
Profile of Respondents and Questionnaire Results
Self-administered questionnaires were distributed to 46 employees of sales and marketing department staffs of the company. Among these, 44 (96%) questionnaires were filled properly and returned on time. The remaining 2 (4%) failed to complete and return the questionnaires. All the returned questionnaires were properly completed and were considered for the analysis.
CHAPTER FIVE
CONCLUSIONS AND RECOMMENDATIONS
Summary of Findings
The result reported in this study were guided by the objectives of mainly assessing the product positioning strategies of Indomie Breakfast Noodle. The study was designed mainly to deal with how marketing mix, market segmentation and target marketing are used in order to enhance, maintain and attract customers and to identify how these tools are aligned with marketing strategy of the company.
The study was descriptive research and the findings are from the qualitative data which was collected using self-administered questionnaires and in depth interview questions. The sampling procedure was purposive sampling research method. From 46 questionnaires, 44 questionnaires were collected and interview questions were forwarded to 2 top level managers of the company which are included in for analysis of the paper.
After a thorough analysis of the data collected through survey questions, the following findings were obtained:
- The customer’s primary reason for buying the company’s product was out of customer preference and Proximity of Supply.
- The company’s product and service quality were rated as Good.
- The price of company’s product and service were affordable. The key factor considered in setting pricing strategy is cost.
- The company’s product and service availability and accessibility is good.
- The company’s distribution channels were more emphasized through both direct channel and indirect channel.
- TV Ads, Radio and print Ads, Print Ads and personal Selling are the company’s best advertising strategy practices.
- Communication effectiveness between marketing department and other departments were rated as average.
- Advertising, personal selling and Public Relation are effective tools of the promotional activities in the company.
- The company uses all the 4Ps of marketing mix element in the positioning strategies.
- The company’s base of market segmentation is based on Demographic and economic situations.
- Employees of the marketing department of the company agree that, they can perform the product positioning strategies of the company effectively.
- Employees of the marketing department receive directions more from sales target, customer satisfaction and Customer Service.
- The major formulators of the marketing strategy of the company were from marketing team up to top management.
- The major implementers of the marketing strategy are all sales team of the company.
- Major challenges in the implementation of the strategy are: communication problem, inefficient promotion, poor planning and lack of integration.
- According to employees’ response, overall company’s product positioning strategies are effective.
Conclusions
Findings of the study indicate that individual branding, product development, differentiation strategies and corporate branding are the main product strategies practiced by the company. These strategies were also in line with the offering of high quality products, wide variety of products and appealing packaging to satisfy the customer. Marketing activities were well planned with the guidance of marketing plans. The marketing plans formulations were mainly affected by market share, market growth potential and customer Preference. Marketing objectives were market driven with customer satisfaction and product quality as the most important objectives.
In general, Promotional strategies such as Advertising, Sales promotion, Personal selling and public relations were more important in building /creating demand while distribution strategies were crucial in fulfilling the demand for customer satisfaction. Pricing strategies played a major role in segmenting the market especially where different packaging materials are used. More importantly price segmentation was more practiced followed by low pricing to contain the competitive forces of the company. With the changing needs of the consumer, product strategies such as individual branding are leading while different promotion strategy and corporate branding followed product strategy.
Recommendations
The following recommendations are made as part of a remedial action intended for filling gaps observed with the research results. Furthermore, the recommendations are believed to serve as an input for Company’s management in their operation for achieving market leadership in the CSD beverage industry. The recommendation is made from the major marketing mix point of view and also emphasize on enhancing strategic capability in responding towards the emerging challenge with the industry.
- Strategy formulation is the course of action companies take to achieve their defined goals. To achieve the defined goals, companies must consider the main factors in the formulation of marketing strategy by diagnosing a situation analysis. However Indomie Breakfast Noodle didn’t prepare a well-defined situation analysis that is in tune with the country’s norm. So, the company should develop and put a situation analysis that allow the company to achieve its goals considering its capabilities, constraints and the environment in which it operates.
- The company should focus to analyze further factors to be considered in formulating the marketing strategy by doing a marketing research on a situational analysis in order to retain customers for a long period of time and to have an opportunity in other product categories like water and Juices.
- The study indicated that there were some challenges in the implementation of the strategy such as ineffective communication, lack of integration. Therefore the company should revisit their current performance against the aforementioned problems by evaluating on a regular basis of their strategy, So that improved quality, well-structured and effective communication and integration can provide the power needed to gain new customers and increase profits.
- The lack of a well-designed and updated strategic marketing document will result in an organization being without direction or focus. So the company should be reactive and prepare a well-defined marketing strategic document by mobilizing a marketing staff. Since these documents are a frame for the marketing strategy activities to be achieved in the long run.
- Strategic marketing document of the company should be available for evaluation and reviewing externally as it is done internally. This will help in bringing in new ideas and point of views from trending practice in the market.
- As stated by (Hyman, 2014:86) market demands depend on all the determinants of individual demand, including income, price of related products and preferences of consumers. Income determines the amount of money available for purchasing particular class of products. This is determined by marginal propensity to spend. Therefore, Indomie Breakfast Noodle should focus more on the promotion strategies such as advertising, sales promotion, personal selling and public relation. Distribution strategies are primarily aimed at delivering the product to the consumers at the right time and the right place.
- In the research study, the researcher has assessed the product positioning strategies of the Indomie Breakfast Noodle from the company perspectives only. Therefore, it is better for any forthcoming researcher to investigate similar issue by involving the customers, intermediaries and other stakeholders. The study also covered only the four elements of marketing mix, thus other researchers may consider additional mixes for further studies. Additionally, it is better if comparative study is conducted with organizations in the same industry.
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