Strategic Marketing Practices of Milk Vita
Subject: Marketing | Topics:

Main principle of this term paper is to analysis Strategic Marketing Practices of Milk Vita. Other objectives are to know about the marketing operations exclusively the research activities in the application area and to including confidence on assessing dispersed data for analysis and thereby dig-out the appropriate notion. Report also focus to face future challenges in designing and operating research activities. Finally analyze implementation and control of strategic marketing activities, at present being pursued, to achieve the organization’s objectives.

 

Objectives

The prime objective of the study is to evaluate is to strategic marketing behavior of the products manufactured by Milk Vita, the largest dairy organization of the country, under the challenge of the global open market economy.

Based on main objectives, following few objectives are also set for the present study:

  • To look into the background the company
  • To enlighten the studying groups about the practical work environment of a industry and its management practices;
  • To know about the marketing operations exclusively the research activities in the application area;
  • To including confidence on assessing dispersed data for analysis and thereby dig-out the appropriate notion;
  • To face future challenges in designing and operating research activities.
  • To analyze implementation and control of strategic marketing activities, at present being pursued, to achieve the organization’s objectives.

Studying the situation of the selected organization i.e. Bangladesh Milk Producers Co-operative Union Limited (Milk Vita) that we can fulfill the objectives.

Hypothesis or Assumptions:

A hypothesis is an assumption to be tested. The statistical testing of hypothesis is the important technique in statistical inference. Hypothesis tests are widely used in business and industry for strategic making decisions. In attempting to reach decisions, it is useful to make assumption about the population involved. Such assumptions which may or may not be true are called statistical hypothesis and in general are statement about the probability distributions of the populations.

The hypothesis is made about the value of some parameter but the only facts available to estimate the true parameter are those provided by a sample. If the sample statistic differs from the hypothesis meet about the population parameter, a decision must be made as to whether or not this difference is significant. If it is the hypothesis is rejected. If not the hypothesis must be accepted.

Definition:

There will be very much difficult to identify the specific definition of that topic so I want to said that , the hypothesis for the present study require interpretation of some the definitions which are be used in analysis. Co-operative Business is the broad senses which are broadly practiced in the recent world because only production is not a difficult thing, but now a day the businesses are very careful about that. Item-wise definition and strategic discussions are placed to ventilate the appropriate issues.

Data Sources

Most important part for any study involves data collection, with the tune to match the objectives outlined; the study approach was set forth to accumulate data through personal interview wherever applicable and possible.

A. Secondary Data Sources: The secondary sources of data collections were utilized on issues pertinent to the background, function, activities and other relevant information regarding the organization and those have been incorporated in the present study paper with due editing. Needless to refer that, efforts were always there to value carefulness to avoid miss-representation and also data collected so is not distorted in any way.

B. Primary Data Sources: In the process, primary sources were earmarked as the respondents to the interview. The organization’s personnel such as General Manager (technical), Additional General Manager (Marketing), Manager (Marketing), Marketing Executives and Clients interviewed to get required information. Here, personal interviews and informal discussions were followed in collecting some data and information that the respondents were found reluctant to provide in formal way, that is, in written forms.

Technique Involved:

1. Asking to the respondents for the information which we have need.
2. Field observation of the actual strategic decisions.

 

Activities & Objectives of Milk Vita:

Activities and Objectives of any company are very important to identify the appropriate position to do their work. Not only objectives but also the activities are very much influential.

The objectives of the Co-operative Dairy Complex project were outlined:

  • Raising subsidiary income of poor, landless and marginal farmer living in relatively remote rural areas of the country by way of purchasing their produced milk at reasonable price through a guaranteed market under the co-operative fold and
  • Ensuring the regular supply of safe, hygienic and nutritious milk and milk products to city dwellers at a fair price.

Under the project, a co-operative infra-structure for the milk producing farmers were created in 4 (four) milk-shed area of the country viz.

  1. Tangail
  2. Tekerhat
  3. Baghabarighat (Sirajganj) and

During the project period (1973-1978) with the total cost of Tk. 155.61 million (including the foreign currency of 61.07 million Tk.), following 5 (five) dairy plants were established.

 

T-1: Plant of the Co-operative Dairy Complex

(Through the Government Loan Assistance)

 

No

 

Place

Distance

from Dhaka

(km)

Nature of plantCapacity per day (litter)Date of erection
1Mirpur,

Dhaka.

10Milk & Milk products processing110,000

(Initial-50,000)

May, 1976
2Tangail,

Tangail.

100Milk Chilling10,000Jun, 1975
3Manikganj,

Manikganj.

90Milk Chilling10,000Sep, 1975
4Takerhat,

Madaripur.

190Milk Pasteurization25,000Dec, 1977
5Baghabarighat,

Sirajganj.

125Milk products processing162,000

(Initial-60,000)

Nov, 1977

Thereafter with BMPCUL’s own resources, 07 (seven) more plants were needed in the line at the following places in recent years with total cost about Taka 50.00 million.

The activities on reaction of new plants in different areas of the country are further underway with 2 (two) more in this year at Shibpur and Ramganj.

After implementation of the project, the organization has so far been succeeded on bringing together over 80,000 farmer members into the fold of 750 village milk producers co-operative societies, who deliver milk to this organization regularly. Thus, around 400,000 farmers family member are being benefited by this organization. Moreover, the activities of Milk Vita has created about 4000 job opportunities in the rural areas with further 1000 in the plants. The co-operative members get reasonable price of milk produced by their cattle based on quality with an established guaranteed market as was visualized in the plant.

 

Co-operative Dairy Projects of Milk Vita:

In 1946, during the undivided Indo-Pak-Bangla period, a small Dairy Plant having the capacity of handling 2000 liters per day was planned to be established at Lahirimohanpur, Pabna, (presently Sirajganj District) by a the-then all-Indian organization namely “National Nutrients Company Ltd”.

The entrepreneur had the target to sell the processed milk and milk products to Calcuta (presently—Kolkata, capital of the Indian state West Bangla) which was one of the biggest market during the period in undivided sub-continent. Moreover, it was located within the easy and chapter rail communication network from the proposed plant area. The original entrepreneur stated erection job of the plant through import of the machinery. But the idea could not be materialized due to the partition of India and Pakistan in 1947.

The company lost their further interest to erect the plant and thereby maintain their business in this part of the sub-continent which had already become the part of a mew country following the independence.

Thereafter in 1952, a young businessman namely Mr. Mokhlesur Rahman showed his keen interest for completion pf the project and as such he exchanged his Calcutta (India) property with all the assets of the original entrepreneur lying idle in the paet of the country.

The new entrepreneur with the name of “Eastern Milk Products” continued the erection job and within a couple of year, the company managed to process and markets their products i.e. Milk butter and Ghee with the brand name – “MILK VITA”.

But the business failed to attain success since in one hade the targeted Calcuta Market being a different country, was not reachable and on the other the existing market of Dhaka was located at a comparatively distance place from the plant area.

Moreover, the costly and cumbersome communication system prevailing during the time, pulled back enormously for marketing of the products under the existing management pattern.

Therefore, Mr. Mokhlesur Rahman initiated the co-operative management for the plant and as such in 1965; the first “milk producer co-operative society” was formed in the area with the apex organization (EMPCUL) “Eastern Milk Producers Co-operative Union Ltd.” through government patronization.

About 100 nos. of village milk producers’ co-operative societies were formed over the Lahirimohanpur plant area and production and marketing of Milk Vita products continued for a couple of years. Even though the economic condition of the organization did not improve; as a result, the plant was handed over to the Co-operative Marketing Society in 1968.

During the period, there was another dairy plant engaged in processing milk in bottles at Tejgaon, Dhaka namely ‘ASTO Dairy’ which was also economically sick and was run by Co-operative Marketing Society. Due to the lack of fund and moreover dearth of efficient professionals, performance of both the enterprises did never improved. Therefore the Marketing Society had to run the plants in a very restricted manner with limited investment of resources and manufacturing of products.

 

Historical Background of the Organization:

Bangladesh Milk Producers’ Co-operative Union Limited, popularly known by its trade name “Milk Vita” is the largest dairy organization of the country. It is regarded as the successful endeavor in the country in dairy field under the co-operative management. A detail study of the organization would, obviously, help to analyze prevailing dairy approaches of the country.

Present Status of the Organization:

In the year1972, soon after the independence, the Government of the People,s Republic of Bangladesh initiated 2 (two) major surveys for the rehabilitation of the-then existing 2 (two) financially sick dairy plants viz. Eastern Milk Producers’ Co-operative Union Limited, Lahitimohanpir, Pabna and ASTO dairy, Tejgaon, Dhaka.

Under the financial sponsorship by the Danish International Development Agency (DANIA) and United Nations Development Program (UNDP), Term Leaders for both the surveys Mr. Pen Nielsion and Dr. Kastrup respectively studiedthe situation for a couple of months.

Evaluating overall situation, the surveyors put up their recommendations to the Government following which a development project title Co-operative Dairy Complex in the pattern of AMUL (Anand Milk Union Limited), India was launched in Bangladesh.

Based on the philosophy of AMUL pattern, the initial project of Bangladesh envisaged on the purchase of milk from the individual poor marginal and landless milk producing farmers under the folk of Primary Milk Producer’s Co-operative Societies, twice a day. In the process, fair price to the farmers were assured with regular guaranteed market. The milk collected in the societies is then transported to the rural plants for preliminary processing at the initial stage.

In the transportation process, since the societies are located at the remote places, both the road and river transportations are used. In one hand there are the contacted boats are arranged and on the other the rivkshaw-vans and locally fabricated mechanical carrier mostly called as ‘Nasimon’ are engaged. In some places trucks hired of from the organization also used. In the entire way care id taken so that the milk is brought to the factory within the stipulated time to avoid quality deterioration. The farmers and also the carrier take due care of time lineless even in the troublesome weather of the monsoon rains and floods.

After wards further transportation of milk to the product manufacturing plants were executed for final processing of market milk and milk products. In the transportation process, special types of insulated road milk tankers are used to preserve the milk quality through the plight.

 

Cattle wealth of the country:

By way of mechanization, the modern world has adopted technologically advanced methods in agricultural production. But in Bangladesh, 90% of the agro-activities are still performed with the draft-power received from cattle heads. Not only that, in the process of harvesting, carrying, oil producing and many other activities are done by cattle. Statistical surveys interpret that there are about 23.72 million cows, 0.86 million buffaloes, 24.19 million goats and 1.24 lambs in Bangladesh.

T-3: No. of Cattle heads with projection.

SL NOLive Stocks1997-1998Yearly Increment %1998-19991999-20002000-20012001-20022002-20032003-20042004-2005
1Cows23.400.3423.4823.5623.6423.7223.8023.8523.90
2Buffalos0.821.230.830.840.850.860.870.880.89
3Goats33.500.5133.6733.8434.0134.1934.3634.8934.90
4Lambs1.112.781.141.171.211.241.271.291.29

The average numbers of different categories of livestock per acre of land are 1.60 for cattle and 1.03 for goat. The live stock holding by house holds vary between 2.32-6.47 for cattle and 2.49-4.72 for goat. This indicates a wide spread and a low density of livestock population which causes problem in adopting effective control against harmful diseases and also in monitoring for batter treatment and adopt  improve management practices.

As livestock is a secondary type of activities for deriving economic benefit, the nation paid a very little importance for improvement of the live stocks sector in the past decades. The efforts initiated in the fourth five year plan of the country for the development of dairy sector has been intensified in 3 year Re-rolling and Fifth five years plan (1997-2002).

Country’s Milk Production:

The present milk production of the country is estimated to 1.76 million metric tons of which 80% is from cows and the balance 20% is received from buffaloes and goats.

T-4:  Milk production in the Country (Million Metric Tons)

product1997-98Yearly Increment %1998-19991999-20002000-20012001-20022002-20032003-20042004-2005
 Milk1.621.891.651.681.711.761.791.821.86

The proportion of milking cows is 45% with average milk production 200-300 liters per lactation period comprising 180-240 days in a year. These are very low-breed local varieties and do not conform economic payback in certain milk-pocket areas, there exist some local crossed high-breed cattle having milk production 800-1000 liters in 210-300 days of lactation. This statistics however is also far from the international slandered of milk production i.e. about 20-40 liters per day per milk cattle. This is important for dairy sector that for economic return keeping of less numbers of quality cattle against higher number of low-productive breed in a prerequisite.

Powder milk import:

The quantity of milk produced in the country does not cater the existing demand. To cater the national deficit the Government is to import powder milk through in vestment of the national hard-earned foreign exchange as can be seen from the bellow table:

T-5: Powder Milk Import in the Country.

SI NOYearsMetric TonsMillion US$1 US$= Tk.Total Cost (Crore Tk.)
1.1991-9255,000.00130.0038.15503.58
2.1992-9345,000.0089.4239.14349.99
3.1993-9435,000.0075.0040.00300.00
4.1994-9525,000.0062.0040.20249.24
5.1995-9621,000.0049.0040.84200.11
6.1996-9714,000.0053.0042.70226.31
7.1997-9813,000.0045.0045.46204.47
8.1998-9915,000.0056.0048.06269.14
9.1999-200016,000.0060.0050.31301.86
10.2000-200119,000.0062.0053.96334.55
11.2001-200220,000.0059.0057.43338.84
12.20002-200318,600.0061.0057.90353.19
13.2003-200416,250.0057.0059.85341.15
14.2004-2005*16,003.0056.0060.25347.21

* Approximate.    ** 1Crore= 10 Million

Directorate of livestock services, Bangladesh, 1998; and Bangladesh Bank, 2002-2003.

About 0.16 million metric tons of liquid milk is received from this import of powder milk from developed countries. This has put the local indigenous production at a stake. This is because of the fact that, the consumers used to prefer imported powder milk which is comparatively cheaper due to subsidized price, lower taxation revenue and so far easy to-use than the local milk. Besides, it is also reported that a significant quantities of powder milk is being poured-in the country through un-authorized sources.

T-6: Comparison between price of local liquid and Milk Imported powder Milk.

Items Pricing/kg of Milk powder Tk.Liquid Milk Equivalent (litre)Price of liquid Milk (Tk./Litre)Price of liquid Milk (US$/Litre)
Imported Milk powder210.008.0026.250.44
Local Liquid Milk 000 000 23.50 0.39

Moreover, the colorful packages and intensified promotional campaigns in the Medias attract more attention for the purchaser. As a result the local processing sector faces unfair competition and thereby being frustrated due to continuous economically deprivation, which is needed to be repaired and reconciled. In terms on consumption rate of milk in the country, only 08-15% is supplemented from the import source.

T-7: Imported Vs Domestic Milk Use in the Country.

 

Product

Domestic Production (Million Tons)Imported Milk Converted Equivalent (Million Tons)Total Milk Use (million Tons)Total

 Deficit

 %

Liquid Milk1.790.161.958.33%

 

Nutritional Demand of Milk:

Considering nutritional demand e.g. by way of providing 240 grams of milk per day per person depicts a monumental deficit in the country as can be seen from the bellow table. However, meeting the nutritional demand is a huge national task. Moreover, it depends on many factors like purchasing capacity of the consumers, milk drinking habits, availability, competitiveness for supplementary products etc.

T-8: Nutritional Demand of Milk in the Country

 

Product Use

UseTotal Demand 

Total Deficit

 

Total Deficit %

Domestic ProductionImportTotal UseNutritional Demand/ PersonNutritional Demand for 140.00 Million
 

Product

 

Mil. Ton

 

Mil. Ton

 

Mil. Ton

 

Gram

 

Mil. Ton

 

Mil. Ton

 

%

 

Milk

 

1.79

 

0.16

 

1.95

 

240

 

12.26

 

10.31

 

84.09%

 

 

Future Plan of Milk Vita: 

The success of Milk vita with further scope for expansion in the processing sector has encouraged the organization to plan for widening of its activities further with the addition of a number of processing facilities. These expansion programs include:

  • Expansion of the current handling capacity or the existing plants;
  • Establishment of a number of chilling plants;
  • Acquisition of bathan (Pasture) land from the government for permanent use as grazing land by the Milk producer farmers;
  • Completion of the Establishment of UHT Treated milk plants;
  • Establishment of Can Making Plant;
  • Establishment of the Mineral Water Bottling Manufacturing Plant;
  • Establishment of a cattle feed Plant;
  • Replication of the project in other areas of the country, especially in the divisional head quarters, such as Chittagong, Khulna and Rajshahi; and
  • Establishment of a cattle disease diagnostic laboratory.

These plants are expanding to allow Milk Vita to contribute further for the development of the dairy sector in Bangladesh.

 

Financial Position:

Milk Vita could not attain financial success till 1990-1991. A number of reasons were defined for this misfortune. However in 1990-91 based on a study recommendations the Government instituted some appropriate activities like reshuffling the top management level of the organization by establishing leadership of the democratically elected Co-operative members, and  further at the executive level due Professionals were assigned to routine management and development affairs in place of running the organization by the deputation-based Government official.

Simultaneously a financial restructuring for the government investment through waive of outstanding interest and conversion of the 50% loans to equity rewarded in positive. These resulted in a magical change and for the first time in the history the organization emerged as a profitable one after 18 years of its operation i.e. 1990-91.

Since then, the organization has further been able to maintain the spirit of earning met profit consecutively for the last 11 (eleven) years till to date. This net profit earning by BMPCUL is a shining example in the co-operative movement of the country through which the farmers have been encouraged in cattle keeping practices resulted in increase of the milk collection for BMCUL. FAO in a recent report has earmarked views like:

Milk Vita continues to be flourishing concern, which can be seen not only from its encouraging financial performance and plans for growth, but also from its recent imitators who have set up similar dairy enterprises to process and market 50 million liters of milk annually. The Grameen Bank is currently adapting the model to reach out to some 8,000 of its poorest female clients involved in inland fish farming, again with UNDP & FAO technical Assistance.

Not only is the privet imitators, the government also initiating activities based on the experience of Milk Vita for poverty alleviation programmers of the country.    

 

Processed Liquid Milk Sale:

It is also worth mentioning here that most of the milk in about 95% is consumed in Bangladesh and received from the indigenous i.e. farmers and middlemen source. The dairy plant processing sector supplies only the 05%. In the recent year some new ventures in milk and milk product processing and marketing have been initiated in the country. Through most of the organization caters an every little quantity of milk but the market for the processed milk in the country is increased.

T-9: Processed Liquid Milk Sale per Day

SI. NOName of the EnterpriseMilk Sales Liters/Day (Average)% of Market Share
1.Milk Vita1,20,00063.15
2.Arong35,00018.42
3.Amomilk5,0002.63
4.Shelaida4,0002.11
5.Bikrampur5,0002.63
6.Saver Dairy3,0001.58
7.Aftab Dairy7,0003.68
8.Safa Dairy3,0001.85
9.Tulip Dairy4,0002.11
10.Pran Milk28501.50
11.Others11500.61
Total1,90,000100%

 

T-10: Market Share of Processed Liquid Milk

 SI. NO Name of Enterprises % of  Share
1.Milk Vita120
2.Arong35
3.Others36

 

Micro-Credit facilities of Milk Vita:

Milk Vita plays a very important role in the economic development of milk producing farmers through purchase of milk from them and assuring timely payment. In the tune of these services the organization has started experimentation on investment in the micro-credit sector. To facilitate purchase of cattle by poor farmer members of the organization, loans are being sanctioned on easy terms. BMPCUL has invested so far an amount about 15.00 million Taka since 1994.

The loan is interest-free and repayments of the installments are made through the weekly deductions from the milk bill to ease the financial pressure on the farmers. This has assured 100% recovery of loans without any defaults. The recovered loans are again “recycled” along with new additions to the fund resulting in increases of the number of recipients each year. This credit facility has made a commendable impact in the process of milk production increase. The demands for the loans are increasing every year from the poor farmers and milk vitas as well as the government are trying to increases it.

Condensed Milk Scenario:

In addition to the processed liquid milk and some other dairy products there exists venture for the production of condense milk in the country. The organization engaged in the process does not have any source for fresh milk collection and as such they maintain their production through the imported powder milk. Since the condensed milk production activities at present are targeted completely for commercial interest, negligence in product quality is largely in sight. This has recently been identified by the Bangladesh Standard and Testing Institute. As a result, the Government has taken a strict view for the interest of the general mass. The players in the condensed milk production term are:

 

T-11: Condensed Milk in the Country.

SI No.BrandPlant Capacity Tons/dayA average Price Taka
1.Danish12030.00
2.Star Ship16030.00
3.Goalini12030.00
4.Ducth Fresh*12030.00
5.Kwality12030.00
6.Milk Vita**13030.00

* Temporarily Production Abandoned ** to be Started March, 2005

 

Strategic Marketing Activities:

Marketing has got no alternatives and based on this concept marketing approach with pragmatic strategy are designed by Milk Vita with appropriate monitoring progress and supports from Promotional and Public Relations activities. Milk Vita products are mainly marketed in major cities of the country through established marketing network with includes Rikshaw Van Co-operative Societies in additional to the retail agencies and wholesaling distributors.

At the outset of production, Dhaka City was ear-marked as the target market. Gradually the marketing activities have been increased and expansion has been made to big city areas like Chittagong, Comilla, Feni, Rangpur,Brahman Baria, Sreemangal, Moulvi Bazar and diversification of product rage as per market demand. The major product of Milk Vita includes:

  • Pasteurized Liquid Milk;
  • Flavored Milk;
  • Butter;
  • Full Cream Powder;
  • Skimmed Milk Powder;
  • Ice-Cream
  • Ghee;
  • Sweet Curd;
  • Cream;
  • Lollies;
  • Rasa malai (sweet meet) etc.

Milk Vita authority pays due attention in maintaining overall quality and hygienic conditions. Most of the “Milk Vita” products are certify by the Bangladesh Standard and Testing Institute (BSTI), the government authority for maintaining the standards and quality of products in Bangladesh.

 

Product and Product Line:

The following chart we can see the different types of product and price of Milk Vita. They have three stages for price that is price for distributors, price for retailers and price for consumers. Some time they have to maintain direct marketing for the purpose of Institutional request, here they create price for institution under the consideration of location, distance and transportation etc.

 

Development of Marketing Mix:

The American Marketing Association (AMA), which represents marketing professionals in the United States and Canada, defines:

“Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goals and services to create exchange that satisfy individual and organizational objectives”.

The AMA definition recognizes that exchange is a central concept in marketing. For exchange to occur there must be two or more parties with something of value to one another, a desire and ability to give up that something of the other party, and way to communicate with each other.

After the target market has been selected, the next steps to determine the marketing mix. The marketing Mix is the set of marketing tools that a firm uses to pursue its marketing objectives on the target market.

The tools are:

  • Product
  • Price
  • Promotion and
  • Place (distribution)

These marketing elements must be blended appropriately to achieve the maximum response from the target market. The marketing mix is controllable because firms usually have a high degree of freedom in marketing product, distribution, promotion and price decisions.

 

Strategies Development according to Product, Price, Place and Promotion:

Strategic Brand/Product analysis:

A product is a bundle of tangible attributes that a seller offers the potential buyers and that satisfies the buyers need and wants.

Accompany may have a single product, a product line, or a portfolio of product lines. In our discussion of managing existing products, we assume that product/brand strategy decisions are being made for a strategic business unit (SBU). Product of the company-consumer goods, Milk vita always tries to maintain their product quality and can best because they are the market leader of liquid milk production. They can collect the milk from the rote level they have to need dust/germ free from that primary production. They heated it over 60°C for injurious bacteria have been killed because it is harmful for human body, they do another thing that extra cream need to be separate because it is also not good for health, and cold it 04°C heat. Because some kinds of bacteria which are injurious for human body is need to be destroy.

They 9 (nine) major types of products especially they capture the market. Moreover they will introduce recently some kinds of product and product line that are following:

  • Condense Milk
  • U H T
  • Fresh Milk
  • Mineral water
  • Candy
  • Flower Milk

 

Pricing Strategies:

A price is something of value that is exchanged for something else. In that organization pricing strategy is relatively same form other similar company. They took some strategy in two times that one, introducing new product and two, any expands of the product line. They are considering some feature to establishing the both types of products that are following:

  • Society
  • Purchasing power
  • Total economy
  • Weight of the predicts

In addition I can say that another type of prices is introduced by them under the commission basis that are:

  • Price for consumer
  • Price for retailer
  • Price for distributor

Price list has shown before. Against the price of the products and services, customers cost is considered. Product is designed and priced in such a way that the target market can afford it. Present market price is also considered in pricing the product and services.

A high price may be set to recover investment in a new product. This practice is typical in the pricing of new prescription drugs. A low price may be used to gain market position, discourage new competition or attract new buyers.

Milk Vita takes some appropriate strategies in different situation like crises period that increases their product price i.e. in Ramadan. As a market leader they can play with product pricing strategy in the market to gain an abnormal profit. But they all ready can capture the market share also loyalty to the consumer’s.

 

Selecting the Pricing Strategy:

Analysis of the Milk Vita’s Pricing situation provides essential information for selecting strategy. Using this information management needs to (1) determine extent of pricing flexibility; and (2) decide how to position price relative to costs and how visible to make the price of the product. The pricing strategy needs to be a coordinated with the development of the entire marketing program since in most, if mot all, instances there are other important marketing program component influences on buyers’ purchasing behavior.

Promotion, Advertising & Sales Promotion Strategies:

It pays an important role in the exchange process by information consumers of an organization’s product or services and convincing them of its ability to satisfy their needs or wants. It being defining as:

“Promotion is any of communication used by a firm to inform, persuade or remind people about its products, services or impact on society”.

Promotional Strategies of Milk Vita:

It is a systematic decision making pertaining to all aspects of the development and managerial of a firm’s management effort.

Promotion strategy consists of a group of interrelated communication activities. It combines advertising, personal selling, sales promotion, direct marketing, interactive/ internet marketing and public relations unto an integrated program for communicating with buyers and others who influence purchase. Promotion strategy covers the planning, implementation, and controlling and organization’s communications to its customers and other target audience. The purpose of promotion in the marketing program is to achieve management’s desired communications objectives with each audience.

Integrated Marketing Communication:

During the 1980s, many companies came to see the need for more of a strategic integration of their promotional tools. These firms began moving toward the process of Integrated Marketing Communication (IMC), which involves coordinating the various promotional elements and other marketing activities that communicate with a firm’s customers.

A task force from the American Association of Advertising Agencies (the 4As) developed one of the first definitions of integrated marketing communication:

“Integrated Marketing Communication concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluate the strategic roles of a variety of communication disciplines – for example, general advertising, direct response, sales promotion and public relation – and combine these discipline to provide clarity, consistency and maximum communication impact”.

An important marketing responsibilities is planning and coordinating the integrated communication i.e. promotion strategy and selecting the specific strategies for the promotion components viz. Advertising, Personal Selling, Sales Promotion, Direct Marketing, Interactive/Internet Communication Marketing and Public Relation.

Advertising Strategies of Milk Vita:

Advertising consists of any form of non-personal communication concerning an organization, product, or idea that is paid for by a specific sponsor. The sponsor makes the payment for the communication via one or more forms of audio, video and audio-visual Medias:

  • Radio
  • Magazine
  • Newspapers
  • Television (4 Channel)
  • Billboards
  • Polycarbonate etc.

Among the advantages of using advertising to communicate with buyers of the low cost per exposure, the variety of media (newspapers, magazines, television, radio, internet, direct mail and out door advertising) control of exposure, consistent message content, and the opportunity for creative message design. In addition, the appeal and message can be adjusted when communications objectives change. Cable television enables advertisers to target their communications to specific buyers with more focus than is possible with the large networks.

Sales Promotion Strategies:

Sales Promotion expenditures are increasing more rapidly than advertising in many companies. Milk Vita’s expenditures for sales promotion are estimated to be as high as 75 percent of total spent on the two promotion components. Both advertising and sales promotions are receiving major attention by Milk Vita in their attempts to boost productivity and sales promotion.

(1) Personal selling:

Personal selling consists of verbal communication between a salesperson or selling term and one or more prospective purchasers with the objective of making or influencing a sale. Annually expenditures on personal selling are much larger than those for advertising, perhaps twice as high. However, both promotion components share some common features, including creating awareness of the products, transmitting information, and persuading people to buy.

(2) Sales Promotion:

Sales promotion consists of various promotional activities, including trade shows, contests, sample, point-of-purchase displays, trade incentives, and coupons. Sales promotion expenditures substantially greater than the amount spent on advertising. This array of special communications techniques and incentives offers several advantages: Promotional can be used to buyers, respond to special occasions, and create an incentive for purchase. One of the mote successful sales promotion initiatives is the frequent flier incentive program.

A variety of short-term incentives to encourage trial or purchase of a product or services, and sales promotion of BMPCUL’s includes:

  • Discount on price for a period
  • Fairs and Trade shows
  • Entertainment programs
  • Arrangement credit facilities for different level.

Direct Marketing Strategies:

Direct marketing includes the various communications channels that enable companies to make direct contract with individual buyers. Examples are catalogs, direct mail, telemarketing, television selling, radio/ magazine/ newspaper selling, electronic shopping, and kiosk shopping (e.g. purchase of flight insurance in airports). The distinguishing feature of direct marketing is the opportunity for the marketer to gain direct access to the buyers. Direct marketing expenditures account for a large proportion of promotion expenditures.

Interactive/ Internet Strategies:

Included in this promotion component are the internet, CD-ROMs, and Interactive Television. Interactive media enable buyers and sellers to interact. The internet performs an important and rapidly escalating role in promotion strategy. In addition to providing a direct sales channel, the internet may be used to identify sales leads, conduct Web-based surveys, provide product information, and display advertisement.

Public Relations:

Public Relation is a planned effort by an organization to influence some group’s without and opinion towards that organization”. Public relations for a company and its products consist of communications placed in the commercial media but mot paid for directly by the sponsor. For example, a news release on a new product may be published in a public relations unit is to encourage relevant media to include company-released information in media communication.

It’s a variety of programs designed to promote or product a company’s image or its individual product. The BMPCUL in this respects cover the following activities:

  • Publishing annual report and up to date company group profile of BMPCUL.
  • Sponsorship of events by BMPCUL.
  • Charitable donation by the BMPCUL’s Chairmen’s.
  • Community relation.

 

Place of Working:

Place includes various activities the co-operative union undertakes to make the product accessible and available to target customers. Actually, it refers to channel functions. Marketing channel performs the work of moving goods from producers. It overcomes the time, place and possession gapes that separate goods and services from those who need or want them.

BMPCUL uses own sales force to communicate to target market/ prospective buyers. Different marketing technique and efforts are made to sales the ‘product’ to the buyers. Sometime some brokers or retailers or sales agents are employed to persuade potential buyers and sale the ‘product’ through them and in return they get commission (usually 0.75%– 2.50% of the price). Members of the BMPCUL’s marketing and sales section perform following key functions:

  • Gathering information about potential buyers and current customers, competitors and other actors and force of the marketing environments.
  • Developing and disseminating persuasive communications to stimulate purchasing.
  • Working with prices and other terms, fixed by the authority, for effecting transfer of ownership or possession.

 

Distribution System of Milk Vita

Distribution Decisions:

It is the most important part of any company as well as Milk Vita. Distribution of any company is very much effective, Milk vita knows that and takes the proper strategies to distribute their milk and milk product to the market.

Companies are legally free to develop strong channel arrangements which will suit them. In fact, the laws affecting channels seek to prevent the exclusionary traffics of some companies that might keep another company from using a desired channel. Most channel law deals with the mutual rights and duties of the channel members once they have formed a relationship.

Many distributor and wholesalers like to develop exclusive channels for their product that are:

  • Exclusive Distribution
  • Exclusive Dealings
  • Exclusive Territorial Managements

Producers are free to select dealers, but their right to terminate dealers is somewhat restricted.

 

Value-Chain Strategies:

It involves entire supply chain management—meaning upstream and downstream value-added flows of materials, final goods and related information among suppliers, the company, resellers and final consumers.

Milk Vita today is placing grater emphasis on logistic for several reasons. First, company can gain a powerful competitive advantage by using improved logistics to give customers better service of lower price. Second, improved logistics can yield tremendous cost savings to both the company and its customers. Third, the explosion in product variety has created a need for improved logistics manage. Finally, improvements in information technology have created opportunities for major gains in distribution efficiency. Using sophisticated supply chain management software, web-based logistics system, point of sales scanners, uniform product codes, satellite tracing, and electronic transfer of order and payment data, companies can quickly and efficiency manage the flow of goods, information and finances through the supply chain.

 

STRATEGIC PLANNING

To formulate strategic marketing plan of Milk vita Co-operative Society; it needs to look into all the aspects of its marketing management. Strategic Marketing Management is analysis, strategy, and implementation and control activities to achieve the organization’s objectives.

The two main components of strategic marketing management process are planning and execution.

Planning is deciding today what to do in the future.

Execution is essentially making things happen and consists of implementation and control.

Strategic planning is the process of developing and maintaining a strategic fit between the organization’s goals and capacities and its changing marketing opportunities. It involves defining a clear company mission, setting supporting objectives, designing a sound business portfolio, and coordinating functional strategies.

 

 

Milk Vita’s mission that 2 (million) litter milk production from their local project and route level member who are rearing cattle.

Its objectives and goals are raising the subsidiary income of poor, and get them appropriate price, also Milk Vita committed them a guaranteed market all time of the year.

Guided by the Milk Vita’s mission statement and objectives, management now its business portfolio—the collection of business and product that make up the company. The best business portfolio is the one the best fit the company’s strength and weakness to opportunities in the environment. It involves in two steps that are following bellow:

  • The company must analyze its current business portfolio and decide which businesses should receive more, less, or no investment.
  • It must shape the future portfolio by developing strategies for growth and downsizing.

About the company’s attitude discussion of strategic planning on large corporation with many divisions and product.

On an assessment of the company, it places the market, and its goal, including the following options:

  • Identify the major elements of the business environment in which the organization operated over the past few years;
  • Describe the mission next few years;
  • Explain the internal and external force;
  • Develop a set of long-term objective;

 

Findings:

Through the collection of primary and secondary data, setting the assumptions and the findings were attained for the study ‘Sustainability of Milk Vita Products under Global Open Market Economy’. It is worth to be mentioned here that since all data were finally analyzed through testing of hypothesis, from the study and analysis it transpires that:

  1. Technology transfer for milk production increase from the exporting countries will always be practiced in least development countries like Bangladesh.
  2. Production in the home country will be increasing, through the effort being exerted by the existing involved group in milk sectors.
  3. Cost of production in the country will not be significantly increased as because the tendency of pricing for dairy products does not support that.
  4. The consumer will affect positively in purchasing the local brands of milk due to its better quality and lower price and a factor for this will be the ethnocentrism of the consumers.
  5. There will be a lot of integrated marketing promotional strategies for the local brands only because that the present global situations and experiences deeply advocates for that. Moreover, under the open market economy, since there will be no tariff carrier, integrated promotion will help market batter.
  6. There is inflation in all the milk exporting countries and in hence this will contribution in the milk price rise in those countries.
  7. The company works more selling concept than on marketing concept and it gives more tress on accounting than the financial aspects.

As to Marketing approach:

 

  • The organization, some time, work on selling concept and some time on marketing concept
  • All relevant promotional techniques are being pursued by the company
  • The company needs more experienced marketing executives and the marketing department needs to work through a system
  • Sales agents or middlemen whose need to be coordinated by their sales executives.

The organization enjoys support of marketing expertise as making strategic decisions.

These findings finally interprets under The Co-operative Business in Bangladesh and with Analysis the organization of Milk Vita, sustainability of milk vita will not be at stake. Milk Vita products would be sold in the market and therefore the organization will survive.

 

Recommendations:

Before conclusion and solicit recommendations, it is worth mentioning here that the study has been made completely for an academic requirement with minimum numbers of collection information. Such as, these can not be over-enthusiastically concluded that whatever outcome and findings have come out is fully dependable for the whole process.

Conclusion:

It was definitely a tedious job to conduct the over all study, make analysis and resolve findings for conclusion. These were done with honest approach under the guidance of the Faculty Guide. Hence from the study it can be concluded that “Co-operative Business in Bangladesh and with Analysis the organization of Milk Vita” will not face much of the difficulties rather it would be very much positive.

Recommendations:

The organization is running since 1952 very smoothly, its journey in the flourishing but competitive industry. The study made a number of investigations and thereby made analysis from the data received. As a result, some of the recommendations are found to be useful for the purpose of continuous sustainability of Co-operative Business in Bangladesh and with Analysis the organization of Milk Vita. Formulation of marketing policy and its implementation are going on simultaneously. The organization is yet to gather industry specific experience to suit its policy with the market demand.

In view of above facts and findings of the reports, it is recommended that:

  1. Marketing Strategic division is too staffed with more qualified and experienced personnel. Marketing executives should be given training on service Marketing.
  2. The organization may conduct a survey in its target market area regularly for founding more business scopes.
  3. Selection strategies of sales executives, brokers or middlemen, clients and other stakeholders should be given due considerations in drawing marketing policies.
  4. Milk Vita is the largest dairy organization of the country managed under co-operative principles. Appropriate measures should therefore be taken to expand co-operative activities and more areas should be covered under this system.
  5. Milk Vita should now go for the advertisement strategies in different media, so its have to needed essentially and immediately open their own WebPages in the internet for world wide presenting its products and services.
  6. Always avoided the existing manpower and recruitment should be maintained as per requirements.
  7. As a market leader, Milk Vita should very much careful about their product price as well as pricing policy.
  8. Under the leadership of Milk Vita, special dairy development efforts are to be initiated with short and long run dairy development.
  9. Milk Vita has to lead the other partners of dairy field to foster dairy development program at a connected manner.
  10. It is acknowledge that Milk Vita’s products are to be better quality and this has to be maintained in all the way. The standards set out by the Bangladesh Standard and Testing Institute should be followed meticulously.
  11. Milk Vita should be awarded the person who show the better perform in their job especially in Marketing and Distribution site.
  12. At this juncture of market economy, milk vita must undertake integrated marketing promotion approach to aware the consumer about the local products, its benefits and thereby motivate them to purchase.
  13. Rural hardcore poor milk producing farmers face exorbitant shortage of capital in the practice of cattle purchase. Milk Vita has to increase the cattle lone revolving funds and in need, government funds can be utilized through the Milk Vita infrastructure for effective utilization and timely pay-back facilitating other farmers to be benefited out of the fund.
  14. Milk Vita is contributing effectively in the process of poverty alleviation process of the country and it should be further intensified.
  15. Finally, It’s Project planning, implementation, Marketing policies and Distribution strategic system or sales should be supper planned and pushed in a strict coordinated framework.

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