International Marketing Strategy of Bulla Dairy - Case Study Example

Marketing Analysis of Bulla Dairy Name Institution Course Date Marketing Analysis of Bulla Dairy Introduction Marketing is one of vital and critical component of any organisation (Shankar and Carpenter, 2012). Lack of proper and effective marketing will make it impossible for any company to reach its consumer around the world in this competitive global environment (Ferrel and Hartline, 2014). The main purpose of this article is to study the marketing environment and strategy of Bulla Dairy. It will highlight the marketing mix of the company and will compare it with that of the competitors. The paper will also provide recommendations for Bulla Dairy that will improve its marketing mix for the company to boost its competitive advantage. Company Description Bulla Dairy Foods is a company established in Australia that is involved in the manufacturing of dairy products including ice cream, frozen yogurt, and cottage cheese, cream to name a few. It was established in 1910 and has grown over the years. Since five generations, the company has taken part in manufacturing dairy foods that serve the needs of its customers in Australia and around the world (Bulla Dairy, 2012). The business of Bulla is still engaged in making premium quality dairy product. The business name changed in 2003 from being called Regal Cream to Bulla Dairy. Currently, the company carries out its business through three manufacturing points in Victoria. Two of the sites are found in the town of Colac and the third site is found in Melbourne. Bulla Dairy today has more than 600 staff located in the three sites. The company is in the business of making a large number of branded and non-branded dairy products including export markets and retail service (Bulla Dairy, 2012). The company is termed as the leading producer of yogurt and ice-cream in Australia. Bulla Dairy has acquired the licence for producing, distributing and marketing of Cadbury range of products. In packaging its products, the company uses flexible and cardboard cartons. In addition, Bulla Dairy sells and distributes its products under two major brands and sub brands (Bulla Dairy, 2012). The major brand is Bulla and Cadbury. Nevertheless, the other brands and sub brands under which Bulla Dairy sells and distributes its products are Fruit’nYoghurt&Thick&Fruity and Crunch and Splits. The company takes part in manufacturing and marketing of its products through Australia. Nevertheless, the company also exports around the globe in regions such as Asia and Middle Eastern Countries (Bulla Dairy, 2012). Bulla Dairy Foods is committed to long-term sustainability concerning the environment and social sustainability. Since 2001, the company has driven an effective practice on the basis of reducing the environmental pollution and footprint (Bulla Dairy, 2012). From that time, the company has worked hard in engaging its staff and creating a conscious workforce of wastage and accountability to exclusive sustainability goals. In addition, Bulla Dairy Foods has also volunteered to the Australian Packaging Covenant by utilising packaging assessments and proper packaging guidelines that ensure that it meets the requirements and considered producing sustainable product. Such guidelines and practices include designing packaging materials that can be reused and litter reduction and use of renewable energy resources (Bulla Dairy, 2012). The company has continued to research on sustainable packaging materials and has reduced the use of non-renewable resources thus reducing its environmental impacts. Bulla has established a co-generation plant in Colac that contributes to the production of advanced renewable energy which reflects in its overall approach to establishing a sustainable business. Moreover, Bulla Dairy takes part in social sustainability through the donation of capital and resources to the less fortunate in the Australian society (Bulla Dairy, 2012). Bulla Dairy is a supporter of a campaign called Great Adventure Challenge that is engaged in raising money for disadvantaged children. Products, Services, Suppliers and Customers Bulla Dairy Foods is one of the largest Australian company that produces both local and internationally recognized brands of ice cream, table cream, and cheese as well as imitation creams which are under different brands (Dev and Don, 2005). They also manufacture other dairy products such as yoghurt, fresh cheese, gastronorm and also frozen yoghurt to mention a few. Bulla Dairy Foods is also a leader in the Foodservice channel in Australia. It also provides contract manufacturing services to other companies of choice for various Australia’s best renowned brands. These Australia’s known brands rely on Bulla Dairy Foods to come up with their products, therefore making use of Bulla’s far-reaching technical as well as production proficiency. In addition, Bulla Dairy Foods also provides supplies services to other dairy products outlets (Bulla Dairy, 2012). In addition, for its raw materials and dairy products, Bulla Dairy Foods source them from dairy farmers who sell to them at large quantities at competitive prices. In addition, most times the company also gets their dairy products from cooperatives that source them from dairy farmers. These raw materials are then taken to the manufacturing plant where finished products are produced (Bulla Dairy, 2012). Marketing Mix Price The component of price is very vital in the marketing mix. Pricing involves aspects such as price list, discounts among others. Price should take into consideration the reactions of the competitors with regard to pricing and decides the revenue earned (Bulla Dairy, 2012). Bulla Dairy is loved and trusted by its customers for over decades of operation and manufactures premium quality products that have effective prices. The company offers considerable and typical prices for its products which is made possible by its low cost of production. Over the years, Bulla Dairy Foods has increased the value of its products which is highly trusted and accepted by the consumers. Since it has established itself as a 100% Australian family company offering quality dairy products, price does not so much matter. Bulla dairy products generally are sold at reasonable prices a little bit higher compared to the competitors. In addition, Bulla Dairy often uses discount campaigns where they offer their products at relatively low prices in order to increase its sale (Bulla Dairy, 2012). Bulla Dairy Foods uses a flexible pricing strategy which is made possible by technological advancement. The prices of the products vary with time since some days the company offer their products at lower prices as a promotional strategy. In addition, Bulla Dairy foods calculate the price of its products based on a specific rate of return for a given volume of production. Ultimately, with quality comes price. This means that as quality of a product go up, the prices are also high (Schindler, 2012). Some Bulla products are at high prices while others are very much reasonable. Ice cream is considered a premium product as a result of its positioning and its acceptance across a number of target segments. Prices of each ice cream are different depending on the quantity and a customer buying it. Nevertheless, in all this, Bulla products are at average prices and can be placed on the same level as those of the competitors (Bulla Dairy, 2012). Promotion Promotion entails all the approaches available for marketing communication. The main aim of promotion is to increase product awareness while in return increases revenues and sales. Promotional activities that is utilized by Bulla Dairy Foods have assisted the company communicate clearly with the target customers. For instance, the company has launched a promotional campaign that is aimed at advertising its Australian heritage (Riggs, 2000). By using the phrase, “unfakeble” as a tagline, television commercials have explored the company’s 105 years in operation while advertising its products. The commercials are enunciated by actors and musicians such as Michael Caton and Deborah Conway. Australian customers are highly concerned about the place where Bulla produce its products and thus the “unfakable” has provided an opportunity for the company to light up the legacy of its brand and expanding further its market. In addition, Bulla Company uses the social media and the internet to advertise its products in order to create customer loyalty and expand its market (Wreden, 2005). Bulla Crunch has noted that some ice cream lovers colour their world on the basis of their favourite flavour of Ice cream. In order to appreciate and couple up with the ice cream lovers, Bulla Dairy has come up with advertising campaign called launching 7 Flavours, 7 Days. This campaign has showcased how Crunch can be an everyday treat that is highly engaging. Generally, Bulla Dairy Foods highly promote its products through television commercials and promotional campaigns. Other promotional activities that are utilised by Bulla Dairy Foods include the use of sales persons, direct marketing as well as online advertisement. Moreover, since most of its advertisement and promotions take part through commercial advertisement, Bulla Dairy has put special attention to its packaging (Bulla Dairy, 2012). Most of its products have attractive and quality packaging that are colourful and eye catching. Distribution The distribution of Bulla Dairy Foods is effective and widespread especially across Australia. It is present especially in the urban regions. However, Bulla Dairy marketing and distribution in rural areas is weak due to the weak demand of its products in the region. Bulla Dairy buys its raw material from dairy farms at large quantities at competitive prices (Hitch, 2011). Once the raw materials reach in bulk, they are broken accordingly from the company, distributers, and retailers to the consumers. Generally, Bulla dairy follow the concept of breaking the bulk. The initial output at the plant is in large quantities. This bulk becomes smaller as it passes through the distribution channel until it reaches the consumers (Bulla Dairy, 2012). There are two major distribution channels that are utilized by the company. As mentioned earlier, Bulla dairy acquire its daily raw materials from dairy farms. The milk products are delivered from the dairy farms to the cooperatives. The cooperatives collect these dairy products and send it to the plant manufacturing facility which then manufactures the end product. The second distribution channel is based on the use of forwarding agents, distributers and retailers (Hitch, 2011). In addition, the company has some outlets in Australia and Asian countries where they sell their products directly to the consumers. Due to the channel of distribution and the small size of the company, the cost of distribution is relatively high. At the end, Bulla Dairy Foods has a strong presence in the Australian market more than in other parts of the world (Hitch, 2011). In addition, Bulla Dairy offers some degree of happiness to its consumers at the right location and in good quality. It uses the retail concept in order to make its products available to the consumer at the right time. Comparison of the Marketing Mix The major competitors of Bulla Dairy include Lion Dairy and Drinks, Tasmanian Heritage St Claire and Peters and Streets Australia (Lion Diary and Drinks, 2012). In addition, the company faces unbending rivalry from multinational food companies. The marketing mix of Bulla Dairy Foods’ competitors is advanced and incredible. For instance, Lion Diary and Drinks has a power house range of differentiated products which are offered in varieties of markets not only in Australia but also in other countries across the world (Lion Diary and Drinks, 2012). The company not only produces dairy products but it manufactures and distributes juice and soy (Pradhan, 2007). In addition, due to the issue of “dairy free” in Australia, the company produces juice products and natural dairy for those who desire less processed food. Moreover, most of the competitors of Bulla Dairy Foods use the direct and indirect distribution channel to reach its customers. Under the indirect channel, a company like Lion Dairy and Drinks offer its products to almost all large and small-scale stores in Australia and across the globe (Lion Diary and Drinks, 2012). The usual channel under the indirect channel includes the distributers, retailers, wholesalers before it reaches the consumers. On the other hand, in the direct channel, the company sells its products directly to the customers through their personnel who use trucks and cycles. Due to its large size, the distribution network used by Lion Dairy and Drinks has made it possible for prompt deliveries (Lion Diary and Drinks, 2012). Concerning pricing, most of the competitors such as Tasmanian Heritage St Clair and Peters and Streets use the competitive pricing. In order for competitive pricing to be established, the companies have established careful watch of the market economy and the pricing policy of the competitors. In addition, it receives feedback that assist in determining the prices of their different products. In addition, the companies keep the lowest possible prices without tampering with the quality of the products (Lion Diary and Drinks, 2012). In some cases, the competitors use premium pricing where the products are more expensive than the local brands but they are reasonable at international level. With regard to the promotional strategy, the competitors use different strategies ranging from print media to television commercials, from on light marketing to use of billboards. Bulla Dairy has focussed its attention more on commercial advertisement and has neglected other advertising approaches. Recommendation for Improvement According to the marketing mix of Bulla Dairy Foods, we can establish that the company depends highly on perishable products such as milk and milk products. The company also has a huge presence in Australia and has not ventured properly in other regions of Asia and Middle Eastern regions. Many of its competitors operate in Australia and the rest of the world and offer differentiated products. Therefore, in order to improve its marketing mix, Bulla Dairy should expand its presence in other countries (Guidry, 2011). Bulla Dairy faces stiff competition from multinational companies in Australia which have established their brands in other parts of the world. Internationalization is a strategy that will enable Bulla Dairy to expand its brand awareness and sales (Doole and Lowe, 2008). In addition, Bulla Dairy relies almost entirely on commercial television advertising and campaigns as a promotional strategy. This limits its brand recognition creating an advantage for the competitors. Therefore, Bulla Dairy should venture in other promotional strategies more such as print media and billboards among others. This will enable them stay ahead of their competitors. Also, over the decades since its establishment, the company has relied on the manufacturing of dairy products which can easily be affected by milk price fluctuations. Most of the competitors offer additional products such as fresh juice and soy. As responsibility and sustainability focus on the customers, the competitors of Bulla Dairy offer dairy products as well as non-dairy products for the customers who do not consume such products. In addition, most dairy companies in Australia offer dairy free, pre-dairy and no lactose messages on their packages apart from Bulla Dairy (Magin, 2006). This is damaging to the development of the company. The sustainability aspect related to the packaging of its products by including nutritional information and messages should be established in the company. The offering of healthier products and drinks by the competitors has also affected the growth of the company. Generally, due to the few varieties of products offered by Bulla Dairy, the company has grown exponentially slow over the years. Bulla Dairy has taken part in environmental and social sustainability. It has focussed more on environment than the society. Therefore, the company should expand its sustainability practices to the society by offering other healthier products and assist the less disadvantaged in the society (Manzi, 2010). This will enhance their customer loyalty and at the same time increase its sales and revenue. Bulla multinational competitors have access to new products from international markets as a result of innovation and creativity (Kumar, 2004). What Bulla should focus on is the development and enhancement of its innovation and creativity in order for it to deliver new and novel products. Conclusion Bulla Dairy Foods is an Australian dairy company with established brand recognition since1910. The company manufactures high quality products that are sold at affordable prices. It uses a direct and indirect distribution channel in order to reach the customers and its promotional strategy highly relies on advertising campaigns. Compared to its competitors, Bulla Dairy marketing mix is not at the best level. In order to improve its marketing mix, Bulla Dairy should focus more on sustainability practices concerning the customers and the society. It should also venture into other promotional strategies in order to be ahead of its competitors. In addition, the company should improve on innovation in order to develop and create new and novel products that would satisfy a larger market. References Bulla Dairy 2012, Introduction to Bulla Dairy Foods, Retrieved on May 17, 2012 from http://www.bulladairyfoods.com.au/ Dev, C.S & Don E. S 2005, In the Mix: A Customer-Focused Approach Can Bring the Current Marketing Mix into the 21st Century, Marketing Management, 14. Doole, I. & Lowe, R 2008, International marketing strategy : analysis, development and implementation, London, Cengage Learning. Ferrell, O. & Hartline, M 2014, Marketing strategy: text and cases, Mason, OH: South-Western/Cengage Learning. Guidry, M 2011, Marketing Concepts that Win! Save Time, Money and Work by Crafting Concept Right the First Time, Live Oak Book Company, Austin, TX. Hitch D. (2011) Inside Bulla: "Trusted and loved by Australian families since 1910" Havard Printing Press Kumar, N 2004, Marketing as strategy: understanding the CEO's agenda for driving growth and innovation, Boston, Mass, Harvard Business School Press. Lion Diary and Drinks 2012, Introduction to Lion Diary and Drinks, Retrieved on June 9th 2012 from http://www.liondairyanddrinks.com.au/ Magin, V 2006, Competition in marketing two essays on the impact of information on managerial decisions and on spatial product differentiation, Wiesbaden, Deutscher Universit̃ts-Verlag GWV Fachverlage. Manzi, T 2010, Social sustainability in urban areas communities, connectivity and the urban fabric, London Washington, DC: Earthscan. Nichrin, N 2000, Bulla Dairy SWOT Analysis, USP & Competitors, Analysis Marketing Strategy, New York, NY: Simon & Schuster. Pradhan, S 2007, Retailing management : text and cases, New Delhi, Tata McGraw-Hill. Riggs, T 2000, Encyclopedia of major marketing campaigns, Detroit, Gale Group. Schindler, R 2012, Pricing strategies: a marketing approach, Thousand Oaks, Calif: Sage Publications, Inc. Shankar, V. & Carpenter, G 2012, Handbook of marketing strategy, Cheltenham, UK Northampton, MA: Edward Elgar Pub. Wreden, N 2005, ProfitBrand how to increase the profitability, accountability & sustainability of brands, London Sterling, VA: Kogan Page. Appendix SWOT Analysis Chart Positioning of Bulla Dairy Foods Read More