BUS5SMM: Bulla Food Service- Strategy of Bulla Dairy- Marketing Report Solution

Bulla Dairy- Marketing Report

Aim:

A study of the marketing environment and strategy of Bulla dairy

Describe the marketing background of the company that includes key information about the industry indicating where the company fits and/or positions itself paying special attention to sustainable practices- environment, society, resources use, etc (10%)

Analyse the main products, services, suppliers and customers of the company (10%)

Describe the following marketing strategies used by the company

• pricing
• promotion
• distribution

Compare the marketing mix to its competitors

Make recommendations for improvement of marketing mix for product(s) to become more competitive- Include relevant sustainability aspects

Appendix: Include a Swot analysis and positioning chart

Strategy of Bulla Dairy

A study of the marketing environment and strategy of Bulla dairy

Describe the marketing background of the company that includes key information about the industry indicating where the company fits and/or positions itself paying special attention to sustainable practices- environment, society, resources use, etc

Bulla Dairy Foods is one the most significant dairy company in the Australia. It manufacturers dairy products and also exports it to many countries in the world under different brands. The company exports its products in Middle East markets and Asia Pacific region covering huge market there. As far as positioning of bulla Dairy Foods is considered it positions itself with respect to People Mix. It is clear with its positioning statement that is “Bulla, loved and trusted by Australians for over 100 years, making delicious real dairy products for five generations” (Anon., 2015). It was in the year 1910 when the company was established and soon it became Partnership Company of three families and is still run by them. The company has won many awards due to its sustainability practices and contribution towards carbon footprint. The practices adopted by the company are environmental friendly and socially acceptable. The company holds significant position in international market because of its superior quality of dairy products. It’s most important integrations are acquiring Colac Ice Works in 1930 and Regal Cream .Not only in international market but the company is one of the biggest dairy products manufacturers in Australia and it captured huge national market with over 450 people working in the company (Beddoe, 2012). The company enjoys fair goodwill in national as well as international market due to its management practices. In Australia the company owns two sites for manufacturing that are in Colac and Victoria. The company has its distribution centre and head office in Melbourne and Derrimut.

Analyze the main products, services, suppliers and customers of the company

The products main products that are being manufactured by Bulla Dairy are table cream, ice cream, yogurt, cottage cheese, sour cream, imitation cream, etc. There are many other milk products being manufactured by the company. The services provided by Bulla Dairy Foods are to deliver milk and milk products to the customers using their milk van. At present they do not have restaurants or food chains to serve the products. Bulla Diary food’s passion has also gone beyond the channel of grocery and they are leveraging their foodservice as well (East et al., 2012) .The foodservices channel provides a range of recopies and these recipes are widely accepted by people and this service is appreciated by customers. The suppliers of Bulla Dairy foods include dairy farmers and other individuals who can provide them fresh and supreme quality milk. The dairy farmers of Bulla dairy foods are also considered as their partners. The only raw material that Bulla dairy foods require is milk and thus the variety of suppliers is less in Bulla Dairy Farms. The company’s major customers include male as well female of age group 3-80 years. This makes the largest customers base for it (King, 2012). Due to its diversity of products it attracts customers from all the age groups. It shall also be noted that the customers of Bulla Diary farms are not only located in Australia but they are also located outside Australia in international market.

Describe the following marketing strategies used by the company

Pricing

The pricing of a product shall be done keeping in mind several aspects such as target market, target customers, vision of the company. The pricing objectives of Bulla dairy foods are being set keeping in mind the following aspects that are current revenue maximization, maximizing profit margin, survival and quality leadership (Martins, 2012). The pricing strategy of Bulla diary is such that it focuses on maintaining quality but at the same time it also does not charge a very high price. This is the best strategy a company can pursue. In this way it does not come under the category of delivering cheap products since the prices are low and it also do not comes under the category of very high priced products because of its moderate pricing. Due to this it can’t be said that the pricing strategy adopted by Bulla dairy is skimming pricing .Because in skimming pricing the prices of the products are kept very high and sometimes a niche is also created under this. But it is not like that in case of Bulla Dairy. Under skimming pricing the quality of products is very high and prices are also very high. Secondly it can’t be claimed that Bulla dairy is using penetration pricing. Under penetration pricing the prices are kept to be very low and quality is compromised. The focus of company here is to sell more and more products. In this way the pricing strategy of Bulla Diary Foods falls in between these two strategies (Tripon, 2008).The pricing strategy of bulla Dairy Foods is set exactly in sync with its mission statement that says that it wants to serve Australians proudly with its high quality products. It can be said that Bulla Dairy foods has adopted Value-based pricing. In this the aim of the company is to set prices in such a way that customers shall not go for alternative products available in the market and go for Bulla Dairy Foods’ products because prices are relative.

Promotion

Promotion refers to those activities that are undertaken to market the products in such a way that more and more customers shall get aware about it and buy it. Promotion is a way to market product using different modes. The modes of promotion are newspaper, internet, magazines, hoardings,Television, radio, brochures, etc. (Coleman, 2013). There are several other modern methods that are forming great place in promotional practices. Bulla Dairy Foods is using all the modern methods to promote its products. The promotional practices of Bulla Dairy Foods include social media marketing, decorative milk vans and recipe blogs. There are a number of companies that are now

using social media marketing to promote their products. The platforms for social media marketing are blogs, facebook, Twitter, Instagram, etc. The most noticeable promotional strategy of Bulla dairy is Instagram (Coleman, 2013).On the website of Bulla Dairy Foods an individual will find a promotional panel. On that panel one can upload their pictures of Instagram in which they are eating one of the products of Bulla Dairy Farms. This panel of promotion has brought about several pictures that customers have shared with public and this lead to massive promotion of the products. In the same way Bulla Dairy foods also has a recipe panel on its website that attracts customers to a very great extent and in those recipes they use products of Bulla Dairy Foods so that people shall

buy those products to try the recipes. Then Bulla Dairy Foods’ another creative promotional practice is sending its milk van to visit loyal customers. It has a very decorative milk van with a room and people are totally crazy for that. Thus, if a customer buys particular quantity of products this van goes and visit them. In this way Bulla Diary is using various promotional practices that are inexpensive and at the same time attracts huge customers to buy their products. The major part of promotional practices of Bulla Dairy Foods is comprised of online media marketing and in that it takes resort of social media marketing.

Distribution

The distribution strategy deals with creating a plan that intends to send finished products to the intermediaries or directly to the customers. There are various strategies of distribution and it depends on the manufacturer that which strategy is suitable for them. The distribution of a product also depends upon the nature of the product and the area or the market that is to be covered. As a matter of fact Bulla Diary Foods is dealing in products that are perishable so it has to plan its distribution strategy in such a way that it could finish the distribution as soon as possible (Williams & Braithwait, 2015). Bulla Dairy Foods is distributing its products on a national level. There are basically three strategies of distribution of the product. A company can use either all of them or any of them as per their requirements. The first channel that could be used by a company is to distribute directly to the customers, secondly a company can distribute the products to the retailer and then these retailer can distribute it to the customers and thirdly a company can first distribute it to wholesalers who will distribute it to the retailers and then it will reach to the customers (Bazerman & Moore, 2012). Bulla dairy foods is using two of the above stated strategies that are distributing directly to the customers and distributing trough retailers. Under the first strategy Bulla Diary is directly delivering milk to the customers in Victoria region and various other regions. But this strategy has limited scope in the company. The major focus is on distributing it to the retailers and then it reaches the customers. Bulla Dairy has tie ups with various grocery stores and departmental stores where they deliver their products and from there customers buy them. In this way the

distribution aim that is to distribute the products nationally gets achieved in Bulla Dairy Foods.

Compare the marketing mix to its competitors

The major competitors of Bulla Dairy Foods are Lion Dairy and drinks, Tasmania Heritage St Claire and Peters and Streets, Australia. It is obvious that every company has a different marketing mix and due to that the sales, prices, image of every company is different. Marketing mix comprises of basically four P’s that are Product, Price, Place and Promotion. These factors help a company to project its products in the market and earn good profits out of that. The marketing mix of Bulla Dairy foods is majorly towards People mix (Burke, 2009).If the marketing mix of Bulla dairy is compared with Lion Dairy and drinks then huge difference would be found out. Lion Dairy and drinks is also having substantial market share with huge customer’s base. The major focus of Lion Dairy and drinks is on Promotion mix. They indulge into promotional practices very rigorously. Their major aim is to reach to as many people as they can. They are not much concerned about product mix and they do not try to develop it. Whereas the case with Bulla Dairy Foods is not that they try to develop the quality of the products constantly. Lion Dairy and drinks are distributing free samples of products to the customers as their promotional practices. Their aim is to make customers aware of the product so that they shall use it and then buy it. On the other hand Bulla Dairy farm are not doing much to promote their products (Kiefer, 2011). Tasmania Heritage St Claire is lying on Place mix because they are not serving to the extended territory like Bulla Dairy is doing and due to that they are making their Place mix strong. The difference in the marketing mix of Bulla Diary Foods and its competitors is that all the others are working towards every marketing mix except for People Mix and the USP of Bulla Dairy foods is that it is working with respect to People Mix. Because it talks about love and trust and that intends towards people mix only. In this way marketing mix of Bulla Dairy have several issues where it needs to work out and these issues

include Promotional mix and price Mix.

Make recommendations for improvement of marketing mix for product(s) to become more competitive- Include relevant sustainability aspects.

The analysis of Bulla Dairy foods reveals that there are several areas where Bulla Diary Foods is required to work out. The Marketing Mix of Bulla Dairy Foods is not efficient enough and this is also the reason why it is not able to do well in international market. The only focus of marketing mix practices of Bulla Dairy is towards People Mix. This is not an optimum marketing mix strategy. If a company wants to improve its practices and remain competitive in domestic as well as global market then its marketing mix has to be strong and efficient. The strategies followed by Bulla Dairy Foods are good enough to sustain in short term but these practices may not work in the long term in such a competitive environment. There are several recommendations that would work out for Bulla

Dairy Foods so that it can remain competitive. These recommendations are described below:

• Bulla Diary Food shall work on its Promotion mix efficiently. At present the company is only using social media marketing tools and this is not the optimum solution to remain competitive. It shall also utilize other promotional practices. The company is targeting the customers from every age group and all the genders. As a matter of cat not everyone I using social media or internet and due to that the company is not able to target them using social media. It needs to work out on other promotional practices such as discounts, promotional offers, free sample, etc. (Kyle, 2012). These are the tactics that attracts customers to a very great extent. It will also help Bulla Dairy Foods in beating the competitors who are constantly gaining market share.
• Bulla Dairy also needs to check its pricing mix. As discussed earlier the pricing strategy followed by Bulla Dairy is neither Skimming pricing nor Penetration pricing and due to that it is falling in the middle of both these strategies. Although Bulla Dairy is trying to use value-based pricing strategy but it is not successful in this (Najjar & Alsyouf, 2013). Because of this it is not able to make a brand image as that is made by its competitors. To remain competitive it is very important to set prices very strategically.
• Bulla Dairy Foods’ Distribution strategy is good though but it shall open its stores and food chains to distribute the products effective to the customers. The competitors of bulla Dairy Foods have their stores and restaurants and due to that their sales and customer relationship management is very good. It is very important to satisfy customers in every aspect to remain competitive (Anon., 2015).Thus, if they will establish their stores there will be better communication with customers and they will be able to satisfy their customers.
• Bulla Dairy is also expanding in international market gradually and it is a good sign of remaining competitive. But the problem here is that its marketing mix strategies for international marketing are not efficient. At present Bulla Dairy foods is exporting its products to Middle East countries and Asia pacific region. But there is not much response from these countries (Senio, 2013). Bulla Dairy foods is also planning to expand in China but due to efficient marketing mix for international market its not able to operate properly in foreign market. Whereas the competitors of Bulla Diary are doing well in international market.

Appendix: Include a SWOT analysis and positioning chart





Positioning Chart

Bulla loved and trusted by Australians for over 100 years, making delicious real dairy products for five generations. Below is the positioning chart of Bulla Diary Foods that shows that it lies in High quantity and high sales quadrant.