Home appliance market is the world’s largest consumer goods market and Butterfly Marketing Ltd. is one of the major organizations in home appliance in Bangladesh Most of the companies are moving globally to sound growth rate. Butterfly is not exception from this criterion. The brand LG one of the major international brands possessed by Butterfly is assisting to get moving globally. The basic intent of the report is to present the performance LG micro wave oven of Butterfly and to enhance the value of brand and product in a very complex competitive environment. The report discusses the competitive market analysis of LG microwave oven. Consumer perception of a number of brand alternative, nature of Distribution channel and their activities, advertising and promotional activities, market share and growth. The outcomes of the analysis are shown in brief. Rivalry is likely to increase; its Butterfly’s strategic move to global market has been successful. The life cycle stages of the products of Butterfly are mostly in mature stage. All the big companies in the market are acquiring small companies and as the product range-is-quite large they enjoy Economies of Scale. Customers are very brand loyal. Some rivals have good distribution channels. As buyers’ preferences are changing it is inducing the industry to change. An intense competition is going on in the market of home appliance between the brand and non-brand product. The increasing demand for non-brand product is due to lower price rather than others. Customers are not very well-known about LG/Butterfly product like due to the drawback of advertisement. Advertisement is another key issue of sales growth through which Konka. Nova and some other non-brand are doing very well in sales. Konka and Walton are most demanding in the gray market because of lower price, nice getup and for guarantor period. The demand of Microwave oven is increasing day by day which is a positive sign for LG.
BACKGROUND OF THE REPORT:
This is the report on internship program of MBA supervised by Mirza Mohammad Didarul Alam, lecturer of StamfordUniversity. The intern was placed in LG Butterfly Marketing Company Limited. for the three month internship to have a practical snatch over the organization activities. The topic of the report is proposed “The competitive market analysis of microwave oven. Basically MBA Program is designed to reduce the gap between the theoretical knowledge and practical knowledge. I am very glad for getting this opportunity to accomplish my practical orientation at Butterfly Marketing Company.
OBJECTIVES OF THE REPORT:
The specific objective of the study is given below.
1. To understand the marketing functions of the company
2. To find out the efficiency and effectiveness of existing Marketing system.
3. To analyze the competitive market share of Microwave oven.
4. To identify the marketing problems faced by Butterfly Marketing Limited in case of Microwave oven.
5. To evaluate the present performance of LG Butterfly in microwave oven in comparison with other major competitors.
An information plan has been structured to collect the relevant data consistent with the preparation of the report to conduct the study, primary and secondary data were reviewed thoroughly in an organized manner. This study is based on secondary data collected from Head office, showrooms, open market, and market survey on questionnaire basis on customers, showroom managers, corporate level and gray market. Newspapers and other printed materials were also used for collecting relevant data.
LIMITATIONS OF THE STUDY:
Several limitations remain regarding the coverage and comparability of data.
- Data collection procedure was not so easy within limited time.
- All users were not cooperating with me.
- In case of data collection from competitors, every place was not accessible.
- In certain critical areas, reliable data are extremely scarce.
- All showroom managers were not cooperative in providing data.
- Some data collected from one source contradicted with other data and actual data findings arise confusion. As a result, actual situation was difficult to assess.
About company’s strategic task and structure:
- Historical background of LG Butterfly.
- Mission, Goals, and objective.
- Management of Butterfly.
- Structure of the company.
- Description of the tasks performed by each division
- SWOT Analysis of LG Microwave oven
Historical Background of LG Butterfly:
Butterfly Marketing Limited is a leading marketing company in the field of electronics home appliances in Bangladesh. Since 1987 Butterfly marketing Ltd. has been continuously making progress surfacing newer grounds and surmounting higher goals. They started their business with only 3 showrooms but now they have 136 showrooms and 80 distributors in Bangladesh. Butterfly marketing company limited is providing customers with high technology involved electronic home appliances with cash or hire purchase. For long time, business collaboration with LG electronics Inc in 1997. PeopleRepublic of Korea, Hansong Enterprise Ltd., PeoplesRepublic of China Butterfly Marketing Company Ltd. has achieved reputation through offering the quality product.
The origin of Butterfly is in China. In Bangladesh, the company was founded in 12th July 1987, to produce electronic consumer products. It merged with several companies (LG, Kelon ) and added several products in the product line. The establishment of LG was in South Korea in 1958 as Gold star. In November 1959, Korea’s first Radio produced. Then in November 1962 first Telephone set produced. Korea’s first Refrigerator was Produced at January, 1965, and 1966, first black & white Television was produced. In March 1968, Korea’s first Air conditioner was produced. Korea’s first overseas branch was established in US in September, 1968, In 1978, sales subsidiary was established in USA. The company changed its name from Gold star to LG electronics Inc. in Marsh 1995, The company LG vision was declared in July 1999 In 75% of its sales (Plasma display ) 60” TV is launched. LG Electronics makes over 75% of its sales overseas. Establishing facilities in 27 countries for manufacturing, sales & marketing, logistics, R & D, design, and customer services, LG has put together a global network of 54 subsidiaries and offices with 50000 global employees. In Butterfly Marketing Ltd, the numbers of employees are about twelve hundred.
BUTTERFLY AT A GLANCE
|Management Office||:||Butterfly Marketing Limited71, Motijhee C/A, Dhaka-1000Bangladesh.|
|Business Operation Started in Bangladesh||:||1987|
|No. of Employees when Started||:||Management-03 & Marketing-03|
|Present No. of Business||:||90|
|Present No. of Employees||:||About 1200|
|ProductRange||:||Air ConditionerRefrigeratorDeep Freezer|
CD Music System
|Business Collaboration with||:||L.G Electronics Inc.PeoplesRepublic of KoreaHansong Enterprises Ltd.|
PeoplesRepublic of China
|Business System||:||Cash & Hire Purchase System|
STRATEGIC TASK ANALYSIS:
Butterfly will become the acknowledged leader in electronic home appliance industry to provide quality products into reachable price. Leadership will be achieved by establishing the industry standards of excellence for quality of service and by maintaining the broad loyalty relative to our service commitment.
Achievement of Mission requires:
- Absolute dedication to understanding and fulfilling our customers need with the appropriate mix of service, reliability, products and price for each customer.
- A countrywide showroom and service network for customer providing with reputed brands, products with excellent useful characteristics with different aspects for customer.
- Allocation of resources consistent with the recognition that we are in number one position in countrywide business.
- An environment that rewards achievement, enthusiasm and team spirit and which offers each person in Butterfly with superior opportunities for personal development and growth.
- A professional organization able to maintain initiative and local decision making while working together within a centrally managed network.
The evolution of our business in providing new products, new services, markets or products will be completely driven by our single-minded commitment to anticipating and meeting changing needs of our customer.
To provide best quality products for the valued customers by introducing latest
technology driven products and expanding service network.
- To create and continuous upgrading the loyalty of the clients and their recommendation of our people through: quality products and good advice, dependable service and delivery and efficient marketing effort.
- To establish a strong and distinguished corporate portfolio and image by retaining the tradition of the world’s greatest product line up.
- To continuous upgrading and monitoring and evaluating of total quality management (TQM) approach to our all marketing and distribution system by making dynamic, honest and industrious showroom and dealer personal, a integrated part of the family.
- To reach the pinnacle of the market in Brand Category combined with customer segmentation and strengthen our position there.
- Develop an integrated human resource policy and implement its consistent use through the organizational training, authority commensurate with responsibility and recognition for performance.
- To ensure that every member of the management team will be a person of top capability.
- Introduce methods to plan for the provision of required caliber and quantity if staff.
- Assist the organization in becoming more customers aware and responsive in changing needs of external marketing environment.
- Define and encourage implementation of an improved communications culture throughout the organization.
- Faster a leadership style throughout the organization which encourages the respect for individuals, teamwork and close identification with customers.
The long-term objective is to gain leadership globally in the home appliance
Short term objective:
Their short-range objective is profit maximization through customer satisfaction
by providing quality product and increase market share in electronics market.
To be the global leader in the appliance industry.
To earn more than average profit by exceeding customer expectation.
Adding product features to different markets and thus gain substantial market
To promote corporate image, to establish good production facilities and to setup a
good distribution channel.
Organizational Structure of Butterfly:
Authority controls all over the company along with the supervision of three directors (finance, Marketing and Technical). The segmented departments are doing activities under the supervision of both head of the department and the authority. The summaries of departmental activities are discussed below:
The major activities of administration department are as follows:
- Staff recruitment, staffing, staff management (transfer, promotion ) and staff
- Administrative activities regulating, setting up workings of various subordinate
ept. and monitoring employees.
- Some additional activities benefiting the company.
This dept. basically does the following activities:
- Preparing monthly account’s report
- Preparing and financing report
- LC import related banking activities
- Central accounting process.
Credit Department; The following activities are done be the department:
- Hire purchase activities.
- Monitoring and preparing credit functions of field officers
- Checking out and preparing arrear collection report of showroom managers
- Monitoring total reporting
Checking out the latest position of hire account, monthly running amount (hire). Through out the latest position of hire account.
- Observing any type of discrepancy gap and performance evaluation of field officers.
Supervising branch level data (Hire Agreement ) through area managers and district managers
Marketing Department; This department does the following activities mainly:
- Market survey
- Sales promotional activities
- Market research
- Competitor analysis
- Additional activities like arrangement of foreign trip or incentive bonus for employees etc.
Audit Department: The main task of the department is auditing. It does it as follows:
Visiting different branch and auditing level of physical cash and inventory.
Auditing showroom activities whether they are doing properly or not.
Computer Department: The department is doing the following activities:
Data entry of (Accounts) both weekly and monthly report.
Data entry and recording file of cash and hire sales and collection from hire sales.
Inventory Department: The following activities are done by the department:
Management of inventory.
Recording total amount of purchase of product monthly.
Preparing record of total sales unit of products weekly and monthly.
Logistic Department; The activities of the department are no less significant which are as follows:
Any type of product distribution.
Product support and logistic support.
Controlling and management of store.
Service Department: The department does the following thins:
- Management of after sales service
- Product service is done by expertise like service engineer and B.S.C engineer.
- Only own product servicing is done
- After sale service is done at free of cost for one year.
Showroom Activities: Showroom is the grass root level of Butterfly Marketing Ltd and serving the customers directly.
There are more than 136 showrooms all over the country. Method of selling is in both cash and hire sales. Various forms are used in selling which are as follows:
Forms used for Cash Sales:
(a) F304 ( Final Receipt General), LPR ( without VAT)
(b) F364 (Cash Receipt with VAT)
Forms used for Hire Sale:
(a) Hirer Proposal Form
(b) Guarantor’ Form
(c) Agreement Form (F315)
(d) Salesman’s Certificate (F317)
(e) Hirer’s Down- payment Receipt (F365)
(f) Installment / Collection Receipt (F314)
Major consideration in Hire Sales:
(a) Hirer’s full name, Parent’s name address, occupation no. of years involved in the job.
(b) Students or blow 18 years aged can’t be a hirer.
(c) Two guarantor who are ‘not related’ to Hirer and also have enough financial strength to compensate later if hirer defaults.
(d) Hirer will have to make four signatures in the agreement form and all signature in the agreement form and all signatures should at the same language at the same manner.
(e) At first, Down Payment + 2 installments will be taken including VAT if any.
(f) for Police, BDR, Army ID No. is compulsory.
(g) Hirer can not hire more than one product at a time.
(h) Service change of collecting installment will be within 10 kilo distance Tk.20 and for every next I kilo Tk. 3.
(i) there should not be any amendment using fluid or mutilation of the agreement form.
(j) the hirer will pay installment within 7th day of each month. Otherwise will be fined @ Tk.25 form 8 to 20th of that month.
Other Issues related to Hire Sales
(a) Revert: If hirer fails to pay installment, then the product is taken return to the showroom back.
(b) Reverse: The reverted product returned to the previous hirer if he pays arear or Sale to another person.
(c) Sale cancel: If any hirer surrenders the product who is not capable of paying installment, the sale is then cancelled. In this case, change of Tk. 1000 for use of each 1 month will be deducted from hire value and the rest amount will be refunded.
(d) Delinquent list: The installments due for collection in the current month.
Forms used for reporting:
(a) Weekly Cash Sale Report (F320): Cash Receipt & Disbursement of Salary. Bulk Sales Commission & Incentive bonus are described here. The balance goes to remittance sheet.
(b) Weekly Hire Sale Report ( F321): It includes collecting Bonus (if 100% collection – 4% bonus otherwise not), Installment collection data from collection sheet (F322), Down Payment with or without VAT. Stock of Hire agreement.
(c) Remittance Sheet (F312) : Balance from F320 & F 321, method of remittance transfer (DD, PO etc) in details to the Head Office.
(d) Monthly Reporting. Summary of Month’s cash & hire sales and other relevant data.
(a) If hirer makes full payments within two months, then he will get the product at cash price.
(b) If hirer makes full payment at 3rd month, he will have to pay cash price + a lump sum amount (of course the sum will be less than hire price).
(c) If hirer makes payment at 4th to 10th month, he will get discount at a chronological down percentage manner.
Description of the tasks performed by each division:
Home appliance market is the world’s largest consumer goods market and Butterfly Marketing Ltd. is one of the major organizations in home appliance in Bangladesh Most of the companies are moving globally to sound growth rate. Butterfly is not exception from this criterion. The brand LG one of the major international brands possessed by Butterfly is assisting to get moving globally.
The basic intent of the report is to present the performance LG micro wave oven of Butterfly and to enhance the value of brand and product in a very complex competitive environment. The report discusses the competitive market analysis of LG microwave oven. Consumer perception of a number of brand alternative, nature of Distribution channel and their activities, advertising and promotional activities, market share and growth. The outcomes of the analysis are shown in brief.
- Rivalry is likely to increase; its Butterfly’s strategic move to global market has been successful.
- The life cycle stages of the products of Butterfly are mostly in mature stage.
- All the big companies in the market are acquiring small companies and as the product range-is-quite large they enjoy Economies of Scale.
- Customers are very brand loyal
- Some rivals have good distribution channels
- As buyers’ preferences are changing it is inducing the industry to change.
- An intense competition is going on in the market of home appliance between the brand and non-brand product.
- The increasing demand for non-brand product is due to lower price rather than others.
- Customers are not very well-known about LG/Butterfly product like due to the drawback of advertisement.
- Advertisement, another key issue of sales growth through which Konka. Nova and some other non-brand are doing very well in sales.
- Konka and Walton are most demanding in the gray market because of lower price, nice getup and for guarantor period.
- The demand of Microwave oven is increasing day by day which is a positive sign for LG.
- Price is the first choice of the customer for purchasing Microwave oven in the gray market but brand loyalty and quality are not ignorable.
SWOT Analysis of LG Microwave oven:
- Efficient management
- good distribution channel
- Long experience in this industry and good learning curve.
- Reputation as a global company Environment friendly products
- Wide distribution capability
- Brand loyal customers
- Brand image of LG
- Easy access to capital investments
- Economies of scale due to standardized product
- Structured geographic network.
- Two sales category higher purchases system or cash.
- Weak marketing strategy.
- Lack of strong marketing network rather than competitors.
- Lower frequency in Advertisement in electronic media.
- Lack of proper decoration of showrooms.
- So high price than china base product. (Microwave oven)
- No warranty or Guaranty for Microwave oven.
- Butterfly has very positive corporate image
- Proper utilization of hire sales system can flourish the sales growth
- New products developed through.
- Small and local competitors are decreasing
- Changes in people’s life style, enhancement of purchasing power and changes in social values.
- A shift in buyer needs and tastes away from the industry’s product
- Adverse demographic changes
- As opportunities are increasing some Korean companies may enter the market as they already have similar products microwave oven. (Superaristion)
- The frequency of advertisement is increasing by the competitors rather than L.G.
- Day by day inter new product in Bangladesh which price is so low. (China product)
Competitive Market analyses of microwave oven
- Marketing strategy& marketing mix of LG Butterfly.
- Product Analyses(LG Microwave oven)
- Consumer Analyses of LG microwave oven.
- Promotional activities of LG Butterfly.
- Distribution and channel management of LG Butterfly.
- Price analyses of LG microwave oven.
Marketing Strategy & Marketing Mix
This is a traditional approach to marketing planning which is based on the four Ps:
Product is, in fact, the range of the products (goods or services) that the organization offers to the marketplace. Decisions have to be made about quantities, timing, product variations, associated services, quality, style and even the packaging and branding.
Price is a vitally important decision area because although it is a promotional tool in many respects,
it is the main source of income to the organization. If prices are lowered for promotional purposes, the case flow within the company, and its long-term profitability, could be seriously affected. As with products, there is normally a range of prices. These can vary according to the quantities bought, the importance of the customer, and the market segment. pricing can be long-term and short-term. pricing can involve discounts, special offers, allowances, credit, and ‘trade-ins’. It is vitally important to get price decisions right.
A business when planning its marketing will ask a number of questions relating to place i.e. ‘through which outlets should we sell the product? How do we physically move the product to these chosen outlets? How far a field do we wish to operate (locally, nationally, or internationally)? Place, or distribution policy, is a massive, complex decision area.
The Marketing mix gives a plan by which to operate to influence and satisfy the buyer/customers. The four Ps approach is not perfect, and is certainly not intended to cover all the marketing activities, e.g. Marketing research, research, of course, is the provider of information for the decisions in all of the four P areas.
Butterfly’s Marketing Mix:
|Product line rangeDesign conceptColor appeal|
|AdvertisingSales cataloguesField sales force|
A product may be anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. It includes physical objects, services, persons, places, organizations, and ideas.
Marketers divide products and services into two broad classes based on the types of consumers that use them-consumer products and industrial products.
(a) Consumer products
Consumer products are those that the customer usually buys frequently, immediately, and with a minimum of comparison and buying effort. These products differ in the ways consumers buy them and how they are marketed.
Table 6.1 Marketing considerations for consumer products
|Types of Consumer product|
|Customer buying behavior||Frequent purchase, little planning, little comparison or shopping effort, low customer involvement||Less frequent purchase, much planning and shopping effort, comparison of brands on price, quality, style||Strong brand preference and loyalty, special purchase effort, little comparison of brands, low price sensitivity||Little product awareness, knowledge (or if aware, little or even negative interest)|
|Price||Low price||Higher price||High price||Varies|
|Distribution||Widespread distribution, convenient locations||Selective distribution in fewer outlets||Exclusive distribution in only one or a few outlets per market area||Varies|
|Promotion||Mass promotion by the producer||Advertising and personal selling by both producer and resellers||More carefully targeted promotion by both producer and reseller||Aggressive advertising and personal selling by producer and reseller|
(b) Industrial product
Products are those bought by individuals and organizations for further processing or for use in conducting a business.
According the above definitions, Microwave oven should be categorized as a consumer product. As a shopping product, they are less frequently purchased consumer products that customers compare carefully on suitability, quality, price, and style. They spend much time and effort in gathering information and making comparison. They buyers see homogeneous shopping products, such as major appliances, as similar in quality but different enough in price to justify shopping comparisons.
Terms & conditions for Microwave oven-Warranty
Butterfly Marketing Limited guarantees to the customer mentioned as per the details of the unit given for a period of twelve (12) month, commencing from the date of purchase, the repair, if so required at the sole discretion of the company, free of charge any part of microwave oven, provided the company is fully satisfied in its sole discretion about these defects and further provided the mentioned unit is deemed to be still in the possession of and used by the purchaser mentioned.
Types of Microwave oven:
There are three types of microwave oven in LG Butterfly.
1. Grill microwave oven
2. Convection microwave oven
3. Electric oven
Different model and price of LG microwave oven.
Cash & Installment
Cash & Installment
Cash & Installment
Cash & Installment
Cash & Installment
Cash & Installment
After sale service:
The department does the following thins:
- Management of after sales service
- Product service is done by expertise like service engineer and B.S.C engineer.
- Only own product servicing is done
After sale service is done at free of cost for one year
Table: Opinion about LG Microwave oven and it’s features.
Consumers express themselves and communicate with each other through the consumption of goods and services. Understanding how marketing manages its customers represents one half of the analysis. The other half needs to focus on the aims of marketing in respect of its customers. Overriding the commercial aims (for example, increased usage, profit and market share) is that of what marketers are marketing and consumers are consuming. The company that really understands how consumers will respond to different product features, prices, and advertising appeals has a great advantage over its competitors. Consumer purchases are influenced strongly by cultural, social, personal and psychological characteristics. The marketer needs to know what people are involved in thy buying decision and what role each person plays. People might play any of several roles (initiator, influencer, decider, buyer, and user) in a buying decision. Knowing the main buying participants and the roles they play helps the marketer fine-tune the marketing program.
The customer analysis for the product Microwave oven of LG Butterfly Marketing Ltd. has been done through a market survey. And on the basis of that survey customer analysis has been made.
Survey Type: Consumer Survey
Sample size: 120
Income Group: Within Tk.20000-Tk. 40000 and above.
Occupation: Service holder & Business personality.
Social Class: Lower-middle, Middle and upper middle.
Survey Area: Different Location of DhakaCity.
Date of Survey: 1st to 30th of August.
In this case we have gone to the butterfly showrooms (Mohammad pur, stadium market, Kazi Nazrul Islam Avenue, Mirpur, Moghbazar, 756,Shewrapara, Rokya Sarani,Mirpur,Dhaka, 15/4,Mirpur Road, Shaymoli,Dhaka). for collecting information of consumers . We have collected information from 120 consumers. We have tried our best to cover all levels of customers.
Table:3.1 Present brand users of Microwave oven of different brand.
Table:3.2 Present china brand user of Microwave oven of different brand.
Table: 3.3 Specific reason for choosing particular Microwave oven.
Table:3.4 Opinion about the “Brand Image” position.
Table: 3.5 Opinion about low price offer high quality.
Table:3.6 Opinion about LG Microwave oven price present. Size 27, 28, 30, (Liter) Price: 13390-14990-15990
|Opinion about price||Reasonable||Affordable||High||Unreachable|
Promotion Activity and Advertisement:
Advertising is an evolving business function. It was traditionally used to announce the availability of products in customer, brand building, positioning conveying the USP (Unique Selling Proposition) and so on. In recent years, advertising hag undergone a number of significant changes in both strategy and execution. Most of the consumer product companies have come to the stage where they cannot do business without advertising. It used to be said be that advertising was the smartest form of communicating without telling the truth. With the cost of media skyrocketing. and the attention span of the customers shrinking with ad clutter, we cannot blame the advertisers for not giving the entire truth. advertising is a communication tool. In order to be successful. we must develop goals and objectives in keeping with the communication core of advertising Once we have clearly defined the communication goals, we must then adders the role of advertising within the overall marketing strategy of the firm.
The advertising campaign:
The campaign may be carried out an advertising agency for a large organization. The important starting point is to have clear objectives as to what is to be achieved. The stages in the advertising campaign set out are in a recommended order.
Identify right timing :
Timing of the advertising is crucial. Too before the event, and the customers forget; too late and they have bought something else. Seasonal markets need careful timing. A Media Expenditure Plan should be drawn, detailing at what stags of the campaign the money should be spent, and on which media need to be informed first so that stocks will be in the shops when consumers get to hear about it.
Promotion to the consumer: Advertising media:
Promotional communication methods consist of advertising sponsorship, branding. Packaging, publicity. Relations. sales promotions and merchandising. They must not offer conflicting messages. Advertising media must be chosen for its ability to reach the right market segments. Perhaps the most significant role that advertising plays is its advertising is its contribution to the creation of brand preference. If the necessary ingredient for advertising is a brand name, then the key to continued successful advertising is a good product. It goes without saying that no amount of advertising will persuade consumers to repeatedly buy a bad product. The Key to successful advertising is to view a product as a bundle of consumer benefits rather than as a physical commodity. Advertising must communicate messages that address major benefits of a product and communicate realistic benefits of consumers. Examples of primary product consideration in establishing advertising goals are:
- Brand position within a product category. Products priced at the high end of a category will require different advertising strategies just as advertising for now products will differ from their established competitors.
2. Product purchase cycle. Obviously. package goods bought on a biweekly cycle. such as groceries will use different advertising approaches than durable goods,
such as appliances, which are purchased every 5 ro 10 years.
3. Product awareness and market position. Product with high market saturation has a much different marketing strategy than others, and it is reflected in both its advertising budget and its creative approach.
4.Product seasonality. For seasonality, Product is marketed differently.
5. Short term advertising strategy. Is a particular campaign designed to gain initial consumer trial, encourage higher purchase levels from current customers, or based on the following.
Identity the right media:
The choice of media is large and rapidly expanding as more TV channels and the new technology of the Internet add to the choice. Selection is therefore critical and must be based in the following:
- Is the cover to be local, regional or national?
- Does the overall cost rule out any medium?
- How many people are reached and at what cost per person?
- Which social group doses the medium reach?
- How often con the message is put over- hourly, daily, weekly etc.?
- Can the message be detailed / how long a life will it have?
- What is the image/status/prestige of the medium?
- How important are sound, movement, color, size?
- Will the results be measurable e.g. Replies to one advertisement?
These are the key questions to be asked when selecting suitable media the lists in the boxes in the diagram have been drawn up in categories in order to help answer this question.
Advertising Pattern of Butterfly Marketing Ltd.
Butterfly’s advertising pattern is the following:
Electronic Media (Television)
Purchase of Point
Electronic Media: Butterfly Marketing Ltd. uses B.T.V., Channel I, A.T.N. Bangla, n.T.V for their advertising purpose.
News Paper: Two Major News paper, Ittefaq & Prothom Alo are used for their advertising purpose.
The odjective of adverfising of Butterfly Marketing are given below:
1. To establish an immediate sale.
2. To bring prospect to closer to a sale.
3. To bring a long term franchise.
4. To bring consumprion among users.
5. To initiate first move towards a sale.
6. To give sales force a supporiting servise.
7. To gain market support.
8. To deeper penetrarion .
- To open distrbution
- To open distribution.
- To develop image.
- To import intormation.
- To enter new marker
- To create awarenes.
- To support retail trade.
- To promote incentive marketing.
- To counter price competition.
- To overcome memory laps.
- To defend preseent positio.
- To establish market lead.
- To reinforce reputation monopoly.
Advertising Agency of Butterfly Marketing Ltd.
Butterfly Marketing Ltd. do their advertising activities through the Nishu advertising agency for specially T.V. media.
The techniques of sales promotion are so diverse and widely used that they are part of the promotional programs of virtually every company. Sales promotion is directed to a number different target markets and comes in an array of formats. Despite its many forms, all sales promotion techniques have in common the goal of creating short- term sales. The most frequently used forms of sales promotion are the following
Point- of – purchase advertising
Sweepstakes and contests
Trade Shows and exhibits
Directories and Yellow Pages
Butterfly’s Sales promotional objectives.
Table.3.4.1 Sakes Promotional objectives of Butterfly
|Consumer Promotion||Trade and industrial promotion|
9. Extending effective distribution.
10. Overcoming seasonal patterns.
11. Developing brand awareness.
12. Controlling selling effort.
13. Acquiring marketing intelligence.
14. Inducing consumption of range.
15. Evaluating Media effectiveness.
|1. Extending distribution network.|
2. Meeting competitive activity.
3. Stimulating showroom/ outlet’s co-
4. Overcoming seasonal fluctuation
5. Introducing new product
6. Opening new accounts.
7. Increasing average value of order.
8. Promoting showroom target
9. Enlisting support from publicity
10. Encouraging advance stock holding.
11. Gaining merchandising support.
12. Purchasing supporting products.
13. Educating for trade.
14. Reclaiming lost or dormant business.
15. Securing media news coverage.
Types of Sales Promotion of Butterfly:
Table :3.4.1 Different types of promotional activities of Butterfly
5. In store and exhibitions demonstration
2. Trade exhibition
3. Showroom promotion
4. Trade Bouncers
8. Point- of- Sale aids
Channels distribution of LG Butterfly Microwave oven:
“Any sequence of institutions from the producer to the consumer including one or any number of middle men is called channel of distribution”- Mc Carthy.
Producers normally use a number of marketing intermediates for taking their products to users. Marketing intermediaries bear a variety of names such as: sole selling agents, stockiest, Wholesalers, franchised dealers retailers, authorized representatives, brokers/ commission agents and jobbers. All such intermediaries constitute the distribution channel. The depots/ show rooms and other direct outlets of producers also form part of distribution channel.
Role and Importance of distribution Channel’s
Distribution channel’s play a pivoted role in the successful marketing of most products especially consumers products.
Channel Perform a wide variety of functions:
The importance of distribution channels can be understood clearly by analyzing the wide verity of function performed by them.
Channels provide distributional efficiency to manufacturers.
- Channels supply products in required assortments.
- Channels provide salesmanship.
- Channels help merchandise the products.
- Channels help implement the price mechanism.
- Channels look after physical distribution and financing functions.
- Channels decision have a vital bearing on decision on other areas of marketing.
- Channels act as change agents and generate demand.
- Channel levels.
- Channel members.
- Channel length.\
\Butterfly’s Channel of Distribution:
Company must decide on the best way to store, handle, and move their products so that they are available to customers in the right assortments, at the right time, and in the right place. Logistic effectiveness will have a major impact on both customer satisfaction and company costs. A poor distribution system can destroy an otherwise good marketing effort. Butterfly Marketing Ltd. is maintaining the following distribution channel under the direct supervision of logistic department through authority to maintain the product property and to reach the final consumers.
Physical distribution looks after physical handling of goods, and assures maximum customer service. It airs at offering delivery of right goods at the right time and places to customers. Physical distribution activities cover.
a) Order processing
b) Handling of goods.
f) Inventory and
g) Customer service.
All middle men in distribution perform these functions and they assure putting the product with in an arms length of customer desire and demand.
Table:3.5.1 Opinion about showroom’s decoration positive impact.
Price analysis :
The price prevailing in the market at any given time and determined by the forces of demand and supply is the market price. Market price is important because price changes send signals to producers which tells them whether they should produce more or less of their good or service. If the price of a product is raising this is a sign that producers need to supply more.
Producers will respond to this signal because, in general, higher rives lead to higher rewards for producers (profit) and so they have an incentive to work harder and increase production. Filling pries, on the other hand,. hand generally lead to falling profits and this is the way that the market signals to producers that they should produce less.
The influence of price on demand: The price of a good or service is obviously one of the main factors that influence how much we buy of it. The factors that cause the level of demand to change are explained below. The general rule is:
An increase in demand leads to arise in price
A decrease in demand leads to a fall in price
Changes in income: Most people gain an income from working in the form of wages and salaries. However, people con gain an income from a number of other sources. They might be from employment, savings, retirement pension, state benefits, property ownership, share ownership or business. It is cleat that the greater the level of people’s income the greater the level of demand. It also follows from this that higher the level of demand the higher the market price. Obviously this logic can also be applied the other way around- lower incomes lead to lower demand and lower price.
The price and availability of credit: The price of some goods and service that people wish to buy can often be so high that they find it difficult to afford them out of one month’s income.
The influence of price on supply: The price of a good or service is obviously one of the main factors that influence how much we buy of it. The general rule is that:
The higher the price of a good or service the more businesses will want to produce
The lower the price of a good or service the less businesses will want to produce
The factors that cause the level of supply to change. to change. and hence the market price of goods and services to alter, are explained below.
An increase in supply leads to a fall in price
A decrease in supply leads to a rise a in rise in price
Changes in the cost of production: A rise in business costs will often lead to a fall in profit levels and so firms will lose some of their incentive to produce. It the majority of firms in the industry are affected in the same way then there will be a fall in supply. Similarly a fall in business costs tends to increase profit levels and they have an incentive to produce more. If most firms in the industry respond in the same way then there will be an increase in supply.
Factors to consider when setting prices:
Before setting price, the company must decide on its strategy for the product. If the company has selected its target market and positioning carefully, then its marketing-mix strategy, including price, will be fairly straightforward. At the same time, the company may seek additional objectives. The clearer a firm is about its objectives, the easier it is to set price. Price is only one of the marketing- mix tools that a company uses to achieve its marketing objectives. Price decisions must be coordinated with product design, distribution, and promotion decisions to from a consistent and effective marketing program.
Pricing of Microwave oven:
In case of the product Microwave oven, Butterfly Marketing Ltd. has adopted the following price on the basis of following formula.
Selling price = Landed cost (LC) + Administrative cost + Transportation cost + Warehousing cost + VAT + Profit margin.
Different brand, different size and different price:
|Brand name||Size (Liter)||Types||Price|
Different model and price of LG microwave oven.
Cash & Installment
Cash & Installment
Cash & Installment
Cash & Installment
Cash & Installment
Cash & Installment
Table –3.6.1 Price comparison of different brand for 30 Liter MC:
- Market Analyses of the Industry
- Major participants of the Industry:
- Market Share Analysis of Industry for global brand.
- Market Share Analysis of Industry for Non brand
Market analysis of the industry:
To ensure that our analysis is consistent, it is very important to define the ‘industry’ we are dealing with. An ‘industry’ is defined as a group of organizations or business units producing close substitutes. For the convenience of our analysis, the industry can be defined in both wide and narrow.
Wide Definition :
Base on the available information, the industry can be defined as “Consumer durable Electronics Goods” industry.
For the critical analysis, the industry can be defined as “Microwave oven” industry.
Major participants of the Industry:
The companies who are performing well and have maximum market share of the industry are as follows:
Major participants of the Industry:
- Noka .
Table : Market Share Analysis of Industry for global brand : (Sales Volume)
For the Year 2007
Market Share %
Table: Market Share Analysis of Industry for Non brand: (Sales Volume)
For the Year 2007
Market Share %
I recommend the following steps:
- Price can be reduced to attract the customers mostly.
- More advertising campaign should be taken to attract the customs.
- Number of showrooms should be increased.
- Credit facilities could give to the dealer in some cases.
- Prices should not be more frequently.
- Set up a control R & D department to make R & D activities more cost effective & fruitful.
- Should have in house advertising agency.
- After sales services facilities should be prompt & with care.
- Strengthen channel of distribution.
- Can diversify in other domestic products to gain economics of scale.
- Become more aggressive to cover wide area.
- Setting up a strong brand image.
- Can Improve promotional activities (consumer promotion, trade promotion).
Managers at all levels are involved in implementing a strategy. Of course top level managers should take the initiatives to carry out the plan with the help of middle level and lower level managers. Then the whole task should be divided into several parts. Procurement manager is needed to play a major role here. He should have the capability to negotiate with the supplier in order to lower the input price. They can also setup a central R & D department to make R & D activities more cost effective and fruitful. The R & D team has also something to do in implementation. The manager in charge of R & D should persuade his subordinates to come up with innovative ideas and give operational efficiency to lower the price.
The manager of marketing department will be responsible in implementing the plan. He should explore creative ideas to attract the customers. The advertising and promotional activities should be exceptional to influence the consumers to buy Butterfly products.
There is always uncertainty in this world. The strategies taken to accelerate a company’s growth may go in vain. Therefore the company should have some backup strategy. Since the average income of Asian consumers is low, many people may be reluctant to buy Butterfly’s products. For this, Butterfly can introduce an economic version of its product line, which will be affordable for the low-income consumers. Not only for Asia, can it produce this economic version for any low income-earning people all over the world.
International market is unforeseeable; the government may not act in accordance with the terms and conditions. In this case they can seek cooperation from the govt. to put pressure on the host government so that they comply with the international norms, rules and regulations. Local people who have strong influence on the govt. should be convinced by parent company so they act in favor of them. All these strategies may not produce the desired result, so insurance should always be there to cover up this loss before entering any new country.
From the study of Competitive market analyze of microwave oven, it can be concluded that functions followed by Butterfly marketing company Ltd. is comparatively good. Since consumer demand is changed instantly, the company should take the advance strategies and policies to grab the market. In this regard integrated marketing can be helpful. Rivalry is likely to increase; its Butterfly’s strategic move to global market has been successful. The life cycle stages of the products of Butterfly are mostly in mature stage. All the big companies in the market are acquiring small companies and as the product range-is-quite large they enjoy Economies of Scale. Customers are very brand loyal some rivals have good distribution channels. As buyers’ preferences are changing it is inducing the industry to change. An intense competition is going on in the market of home appliance between the brand and non-brand product. The increasing demand for non-brand product is due to lower price rather than others.
Customers are not very well-known about LG/Butterfly product like due to the drawback of advertisement. Advertisement is one of the key issues of sales growth through which Konka. Nova and some other non-brand are doing very well in sales. Konka and Walton are most demanding in the gray market because of lower price, nice getup and for guarantor period. The demand of Microwave oven is increasing day by day which is a positive sign for LG. Price is the first choice of the customer for purchasing Microwave oven in the gray market but brand loyalty and quality are not ignorable.