You are on page 1of 15

MARKETING MANAGEMENT

TERM REPORT

PADDLE POP MAGILIKA “CHOC LAVA”

SUBMITTED TO: MS. SABRINA AFZAL

SUBMITTED BY: NADIA SALEEM SEEMAL IRFAN SIDRA NAWAZ SANAA JAVED AHMED SHAFI

BBA (HONS.) SECTION: F

ACKNOWLEGDEMENT

Firstly, we are thankful to Allah Almighty, for giving us courage at each and every step of our lives, and especially in making this report. We would also like to thank the course instructor, Ms. Sabrina Afzal for clarifying our marketing concepts and guiding us in each and every phase in the completion of this project. We are also obliged to Ms. Khadija Shahid, the teaching associate for her cooperative and friendly behavior throughout the semester. Special thanks goes to Mr.Waseem in the R& D department of Wall’s and Mr. Zafar in the production department of Wall’s who gave us useful information about the selected product. We are also grateful to our parents and some special friends who are the source of our strength and without whom we could have never achieved anything in our lives.

INTRODUCTION: Unilever is the world’s largest manufacture of ice cream; in fact Unilever holds almost 18% of the global market share. Unilever is moving towards making ice creams even healthier treats, by reducing fat content, introducing lower calorie ice creams and beefing up other treats with calcium and other nutrients. Wall's is the brand name of Unilever's Heartbrand ice cream business it is the name of the company that for many years, as an independent and then as a Unilever subsidiary, made and marketed the Wall's brand of ice cream. Unilever Pakistan Limited is a Pakistan-based company. The Company manufactures and markets home and personal care products, beverages, ice cream and spreads .the Unilever Pakistan Limited (UPL) was established in Pakistan in 1958. Unilever Pakistan is the largest FMCG Company in Pakistan, as well as one of the largest multinationals operating in the country. Also in Pakistan the Heartbrand is called Wall’s and it is one of the most active players in the market and is striving to offer lighter, healthier products as well as providing old favorites, hence catering to a variety of diverse tastes. Secondly it is the largest player in the Pakistan ice cream market and holds the lion’s share of the market. The Wall’s factory in Pakistan is located on Multan Road in Lahore. The factory was constructed in 1994, and its production started in the year 1995.It is fully equipped with a state of the art innovation pilot plant. This makes Pakistan one of the few countries in the region to have their own innovation pilot plant, making it possible for Wall’s to launch exciting new products every year. In the first year of there operations the total production of ice cream was 4 million liters. In 1994 Lever Brothers Pakistan tried to acquire Polka Ice Cream for Rs 600 million. Polka refused the bid, demanding instead Rs 1 billion. One year after the launch of Wall's Ice Cream by Lever Brothers in 1996, Polka approached Wall's with an offer to merge the two companies. So
they merged in 1996 and now it is called wall's not Polka.

Mention ice cream and most people in Pakistan think ‘Walls’, Pakistan’s leading ice cream brand. Throughout the years Walls brand has brought to Pakistanis a number of much loved classics from the seduction of magnum, sharing of Cornetto with your loved ones to the refreshing taste of paddle pop. The Wall’s brand stands for a good time. From affordable treats to

premium indulgence, to hanging out with friends and sharing precious fami ly moments; Wall’s adds
to the simple pleasures in daily life.

REASON FOR INTRODUCING PADDLE POP MAGILIKA: According to the marketing department at Walls, ice cream lovers are categorized into four basic categories, and the categories are made according to the different age groups and choices of people falling in that category. These categories include, firstly the kids of age group 4-7 who love eating ice cream in cups, then comes the age of 7-10 kids in this category are more inclined towards eating ice lollies, then comes the category where the children are aged between 10-15, this is the category where kids are converting from ice lollies to light chocolate coated and milk ice creams on sticks. Finally then there are those who prefer stronger flavors of ice creams like bitter and dark chocolate, white chocolate, and have a preference for ice

creams such as Cornetto, magnum, and death by

chocolate. Catered especially for the kids aged between10 to 15 Paddle Pop is a major hit. The Paddle Pop’s Lion is the friendly face of fun and adventure and this ice cream rates among the fastest selling and most popular ice-cream among the children. Wall’s re launched its Paddle Pop brand with a new name Magilika in January 2007 under this brand there were three different Paddle Pop categories of ice creams which were launched, namely they were; • • • Magic Star Rainbow Spell Choc Lava

We have conducted a research on Choc lava. Choc lava was made is such a way that the lower half is made up of light chocolate while the upper half was made up of with the coating of milky hard chocolate with an inner filling of light chocolate which has viscous condensed milk.

COMPANY ORIENTATION TOWARDS THE MARKET PLACE:

According to the marketing team at Wall’s for choc lava they used the production concept to conduct their marketing activities. The concept states that those products that are widely available and inexpensive are preferred. The company mass produced the ice cream at low costs. The managers of production oriented business concentrate on achieving high production efficiency, low cost and mass distribution. But from our analysis the company should have made use of the product concept as it focuses on those products that offer the most quality or innovative features. This is because of the fact that choc lava did have innovative feature in it. The liquid condensed milk in the ice cream bar was a concept that was totally unique and not known before. The product would have been more successful if it was priced and advertised and sold properly. MARKETING ENVIRONMENT: Successful companies recognize and respond profitably to unmet needs and trends. Companies could make a fortune if they are able to deal with the environment efficiently. • Demographics The demographic environment is of major interest to marketers because it involves people, and people make up the markets. The firms have to closely analyze customer’s age, gender, occupation, income and other statistics in order to set the perfect target market for their product. As far as demographics of choc lava are concerned it especially caters to children, both male and female following between the age group of 10-15 years. As it is catering specifically to children so it is low priced, this shows that it is for kids belonging to all income brackets. • Economic Environment Markets require purchasing power as well as people. The available purchasing power in an economy depends on current income, prices, savings, and debt and credit availability. Marketers must pay careful attention to tends affecting the purchasing power because they have a strong impact on business. As in this case the scenario is different because the product is not price sensitive and caters to all income classes.

Socio cultural Environment The cultural environment is made up of institutions and other forces that affect our society basic values perceptions, preferences and behaviors. People grow up in a particular society that shapes their basic beliefs and values. Mostly children belonging to all societies and culture have same behaviors. Little kids love eating ice creams and usually chocolate are their favorite flavor. So the culture in which Wall’s operates is not very complexed rather it is quite favorable.

Political & legal Environment Marketing decisions are strongly affected by development in the political and legal environment. This environment is composed of laws, government agencies and pressure groups that influences and limit various organizations and individuals. There are certain legislations and government agency enforcement which compile firms to show socially responsible behavior. Wall’s also does not face any threats from these conditions as it follows and fulfils all food laws and legal requirement imposed by the state authorities.

Technological Environment One of the most dramatic forces shaping peoples life is technology. It is force that creates new product and new market opportunities. Like all other businesses technology also affects the operations of Wall’s directly. As Walls’s owns and operates a highly automated production plant and as most of its machinery and equipments is imported the company has to be on its toes when it comes to adapting to new and advance technological changes. The machine used for filling condensed milk in the upper layer of choc lava was also very technologically advance and unique as previously no other company had used such a technique before.

STRATEGIC COMPANY PLANNING, MISSION & MARKETING OBJECTIVES:

Strategic planning is a plan used to guide the decisions and actions of everyone in the organizations. For any product to sustain itself in the market it is very important that the company owing the product does extensive and detail strategic planning before the launch of the product in order to get hold of the competitive advantage. The marketing executives search continuously to find such an opportunities. Competitive advantage is a unique strength relative to its competitors. It is mostly based on quality, time, cost or innovation. Having identified this competitive advantage the company must allocate its resources to exploit it. Choc lava no doubt was a completely innovative product consisting of three flavors in one ice cream, light chocolate, milky chocolate and condensed milk. It was a unique product which no company had offered before but the ice cream failed terribly due to its bad launching timings. The timings of the product and marketing actions directly influence the magnitude and duration of a firm’s competitive advantage. Choc lava failed firstly because it was launched in the start of January 2007. Choc lava was launched in winter which is not an appropriate time to launch such a

product because obviously parents won’t allow their kids to buy ice creams in winters. Secondly, its sales dropped considerably in the summer season due to the problem of extreme weather conditions. The mission of Wall’s was to re launch Paddle pop by a new series of ice cream named Magilika, as depicted by the name Magilika has something to do with magic and the main theme behind this re launch was to attract children by magical fantasy. The color of the ice cream is brown (chocolate) which represents mountain and inner filling of condense milk which represents lava hence the name Choc Lava Power.

MARKETING RESEARCH: Marketing research is the process of defining marketing problem and opportunity, systematically collecting and analyzing information and recommending actions to improve the organizations marketing activities. An effective marketing research involves six steps which are defining the problem and research objectives, development of the research plan collection of the information, analysis of the information, presentation of the findings and decision making. Marketing research attempts to identify and define both marketing problems and opportunities and to generate and evaluate marketing actions. Hence it is a means of reducing risk and uncertainty. Wall’s is one of those companies which do not launch any of its products with out extensively carrying out marketing research. Same was the case with Choc lava but the only problem was that the research done for the particular product did not work because of the following reasons; a) When they conducted the children’s tasting test they give fully frozen ice creams to kids who liked the ice cream immediately as the frozen ice cream depicted no problem in the product. b) Secondly when they offered the ice cream to the kids they readily accepted it as no kid ever refuses an ice cream no matter what the taste it. c) When the ice cream was in fully frozen the condensed milk was in its proper place inside the ice cream. However due to improper freeze temperature management by the retail

outlets the condense milk leaked out of the wrapper giving an untidy and unpleasant look. As condensed milk is very sweet and it was dripping it touch the throat and as a result gave an overly sweet taste which disliked by the children’s. These problems occurred in the later stages which were not depicted by simple children ice cream tasting tests. TARGET MARKET & BASIS OF SEGMENTATION: A target market is group of people or organization whose needs the marketers’ products are specifically designed to satisfy. Target marketing narrows the organization’s focus to an appropriate set of potential consumers whose needs can be profitably met. So the target market for Choc lava is kids belonging to the age group of 10-15 years. Market segmentation on the other hand identifies the separate group of people or organization within the broad target market, each with similar needs, characteristics or behaviors. Market segmentation for walls is categorized into four basic categories. These categories include, firstly the kids of age group 4-7 who love eating ice cream in cups, then comes the age of 7-10 kids in this category are more inclined towards eating ice lollies, then comes the category where the children are aged between 10-15, this is the category where kids are converting from ice lollies to light chocolate coated and milk ice creams on sticks. Finally then there are those who prefer stronger flavors of ice creams like bitter and dark chocolate, white chocolate.

MARKET SEGMENTATION STRATEGIES USED: Wall’s segments its market on the basis of demographics. The market is divided into groups on the basis of variables such as age and income. While Wall’s segments Paddle Pop Magilika on the basis of age only.

PRODUCT DEVELOPMENT PROCESS: The product development process is the sequence of activities a marketer uses to transform product ideas into marketable goods and services. In the course of developing new product,

marketers scans the environment and generate ideas, screen them, develop and test product concept, analyze the business concept, design and develop the product, test it in the market, and then commercialize the product as illustrated in the figure; ACTIVITY Environmental scan & idea generation PURPOSE Re launch Paddle pop with a new brand name “Magilika” which included three products, Magic Screening out inappropriate ideas Concept development & testing Star, Rainbow Spell & Choc Lava Various lollies & other Paddle pop products were eliminated. Using marketing research techniques such as conducting Business Analysis tasting sessions and noting the expressions, impressions and feedback of children. Wall’s made future projections before the launch of “Magilika” that its products would sell like hot cakes as there was no other ice cream brand currently in the market catering to children Product Design & Development specifically. Friendly “Lion” character with magical powers is used to attract children. The concept of condensed milk “lava” inside the ice cream was meant to be a Product & Market Testing Commercialization surprise for kids. This stage was skipped by Wall’s, which eventually led to product failure. Choc lava launched in January 2007

PRODUCT POSITIONING: Positioning is the use of marketing to encourage people in a product’s target market to form a particular mental image of the product relative to competing products. “Magilika” has been positioned in the minds of children as something which would take them into the fantasy world and the lion represents strength as children would start to think that eating Choc Lava would make them strong.

BRANDING STRATEGIES: The branding strategy for a firm reflects the number and nature of common and distinctive brand elements applied to the different products sold by the firm. When a firm introduces a new product, it has three main choices:
1. It can develop new brand elements for the new product. 2. It can apply some of its existing brand elements. 3. It can use a combination of new and existing brand elements.

Wall’s used the choice of using the combination of new and existing brand elements. Wall’s has used the same old brand name of Paddle Pop along with the same character of lion but a magical theme was used in order to attract the children. An existing brand that gives birth to a brand extension is referred to as a parent brand. Here Wall’s is the parent brand whereas “Paddle Pop Magilika” is the line extension that is the parent brand is used to brand a new product that targets a new market segment within a product category currently served by the parent brand such as when Wall’s offer new flavors an added ingredients in it.

PACKAGING STRATEGY: Packaging and labeling help marketers communicate with customers and provide protection, storage and convenience as product moves through the value chain. As a result, packaging and labeling adds value that help marketers differentiates their product and built brand equity. The packaging of Choc Lava ice cream indicates various ingredients used in the ice cream, nutritional information and the price. It also has certain symbols toward the back side like “halal”, “keep your country clean, “bar code” and “questions and comment” on lever rabta. Apart from all this the attractive features of Choc lava packaging is the cartoon character visible very clearly on the packaging. It is one of the factors that attract children toward the ice cream as

whenever a child visit the super market and open the ice cream freezer the special packaging immediately attracts his attention and he quickly reaches and grabs the ice cream.

PRICING STRATEGY: The strategy used for pricing of Choc Lava is value pricing in which prices are held steady while improving products benefit. The price of Choc lava at its launch in January 2007 was Rs 12. This low price is especially kept to attract children who normally have this amount of money in their pockets either they buy chocolate or ice cream. The new product attribute added in this ice cream is the condensed milk.

DISTRIBUTION & MARKETING CHANNELS: Distribution channel consists of individuals and firms involved in the process of making a product or service available for use or consumptions by consumers. High transport vehicles are used for transport of ice cream from the factory to the company’s detecting freezers UTECTIC freezers (cold storage) from where the ice creams are transported throughout the country as well as abroad. The shopkeepers are given same margin in each outlet throughout the country.

ADVERTISING & SALE PROMOTION STRATEGY: • • • ATL and BTL marketing activities TV commercial Magazines

KEY WEAK POINTS:

Improper launch timings Excessively hot weather condition No proper advertisement of Choc lava as a separate product Fault with a product itself

• •

RE LAUNCH OF CHOC LAVA: • Promotional Mix

 Product The main problem was in the product itself, the chemical formulation of the condensed milk is such that it cannot with stand even a little high temperature and it leaks out of the ice cream even before having the first bite. And it becomes very massy for children to eat it. Also it complaints about the product being too sweet for the children to eat it. We are also planning to change it. We as marketing managers have changed the ingredients of the ice cream. We have changed the light chocolate portion of the ice cream with vanilla and replaced the condensed milk with the semi liquid chocolate which would not prove to be as massy as the condensed milk. Furthermore as the composition of ice cream has changed, it is also necessary to change the name of the ice cream, so we have changed the name of ice cream from Choc Lava to “Vani Choc”.

 Price We have decided to change the price from Rs.12 to Rs.10. the main reason behind this change is the added convenience for children to purchase ice cream for ten rupees, rather than twelve rupees as it is rather difficult to get three rupee change back. The pricing strategy used is the even number value perception.

 Promotion Presently Wall’s is advertising Paddle Pop as “Magilika”, rather than concentrating on the three products. The consumers are confused as they do not know the individual characteristics of the products under Paddle pop “Magilika”, as only the name “Magilika” was highlighted in all the promotional mediums. The print ad is attached in the appendix. We have planned to re launch Choc Lava as “VANI CHOC” .This new ice cream will be launched under the existing brand name Paddle Pop Magilika but the ad campaign would be designed in such a way that each product of Magilika brand would be promoted separately. This means that instead of confusing the children by simultaneously portraying the three ice creams together in one advertisement a single ice cream would be advertised at one time. As it is totally a kid’s based product so we would be conducting ice creams festivals in different schools, painting competitions would be held  Distribution We would be using the same distribution channel that Wall’s is already is using.

PRINT ADVERTISEMENT OF CHOC LAVA