DESK

RESEARCH

Class: IFA-BO1

Student:
Sahil Butt 596409
Lucia Zappia 591904
Viet Anh Tran 592387

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Introduction
- So Dendermonde has produced the tastiest dairy using ancient farmer traditions and a
secret home-made recipe. They are really special the way they produce desserts based on
natural ingredients.
- They had a big success but as the company grew the assets such as a machine was halted
because it was only small. The demand was growing but they were not able to grow intern. -
- There is a lack of money to really invest in machinery or use the money for maintenance
- We have the obligation to provide Dendermonde with the latest research updates in order
to make Dendermonde a successful full functioning company again.

Problem definition
They found a private investor who was willing to invest a million euros before she makes
the decision, theres a new convincing strategy requested. It is needed to provide
Dendermonde with Desk and Field research to give the company the latest insights in order
to make the company fully functioning.

Problem orientation
-They have a production hall which is built after the war and is to the mac full for only
storage, production or other activities. A small machine was the only option because theres
no extra space to be created.
-The machines are not state-of-the-art anymore and are nearing their replacement date.
They hire flex workers who do not have the attitude, knowledge, and experience to reach
the quality level as desired. Mr. de Clercq is not studied well enough to understand some
figures. There are also no job descriptions and there is no specific strategy.
-The quality and research department and development consist of a young graduate and is
inexperienced to handle it by herself. This when quality cannot be met. She alone is not able
to check all deliveries.
-The marketing and sales consist of only 2 people who work separately and can only take
care of their own sales. The competition is really high because of FrieslandCampina who
holds a market share of 16,6%. A lot of independent retailers are their customers which will
give them a bad overview.
- They have a production hall which is built after the war and is to the mac full for only
storage, production or other activities. A small machine was the only option because theres
no extra space to be created.

(Photo: Taste.com.au)

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Theoretical framework
Although Dendermonde has established since 1949, their market share has still remained
small and virtually stayed unknown in the big market. After a look at the current situation of
the firm, we note that most problems the company has been faced with result from the
internal factors. Therefore, we believe the three theoretical frameworks below are suitable
in this case to solve the problem of Dendermonde.

SWOT analysis
We us the SWOT as it stands for Strengths, Weaknesses, Opportunities, and Threats. It is an
analytical framework which analyzes both the internal and external factors of a firm. The
method was created in the 1960s by Edmund P. Learned, C. Roland Christensen, Kenneth
Andrews and William D. Book in their book "Business Policy Text, and Cases" (R.D. Irwin,
1969).

Investopedia, the world largest financial education website, states: Using environmental
data to evaluate the position of a company, a SWOT analysis determines what assists the
firm in accomplishing its objectives, and what obstacles must be overcome or minimized to
achieve desired results: where the organization is today, and where it may be positioned in
the future.

In this case, Dendermonde manager does not know how to take full advantage of their
hidden internal factors as well as the potential market. Therefore, SWOT model may help
them come up with a better business strategy.

(Photo shot by: Ilse Velkens)

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Marketing mix 7Ps
The marketing mix 7Ps is the extended version of the original marketing mix model with 4Ps.
It includes Product, Promotion, Price, Place, People, Process and Physical evidence.
Understanding these components fully will help come up with a suitable strategy for the
company in order to maximize profits and raise brand awareness.

Annmarie Hanlon, who is a digital marketing specialist of Smart Insights, states: The 7Ps
helps companies to review and define key issues that affect the marketing of its products
and services and is often now referred to as the 7Ps framework for the digital marketing
mix..

Segmentation, Targeting and Positioning (STP)
STP process includes Segmentation, Targeting and Positioning. The process can guide
Dendermonde to the development and implementation of an appropriate marketing mix in
order to come up with an effective marketing strategy for the company.

Mind Tools, one of the worlds most popular management learning website, claims: This
model is useful because it helps you identify your most valuable types of customer, and then
develop products and marketing messages that ideally suit them. This allows you to engage
with each group better, personalize your messages, and sell much more of your product.

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Main-question
How to convince a private investor with a new convincing strategy and implementation plan
in order make it successful again

SQ1: Why is the current strategy of Dendermonde outdated/not functioning?
The strategy was grounded in 1994 by a former director who had a driven view on the
Dendermonde products. The mission was stated as following: Develop, produce and market
a broad range of reliable, natural, and nutritious dairy desserts that should contribute to the
well-being and vitality of life for our final consumers and to guarantee that all our customers
are delivered as soon as possible , (Dendermonde strategy , 1994). This doesnt work in
practice because the trade-off is a higher cost level than the industry average. To get a
better understanding, well take a look at the SWOT in order to get a better understanding.

The standard packaging and quantities for all sorts of products are most likely the same. The
reliability will decrease as Dendermonde has an outdated packaging style. This leads to
costumers buying other brands, because of the more attractive/reliable design. The labels
that Dendermonde is using consists of no clear pictures and has a poor design.

The studies from nowadays show a relation between the influences on the design process of
a package from external and internal factors. This outcome shows that the designing process
is, to a certain level, very dependent on the interaction between the main actors in this
process. The result of this study shows that a good design can trigger customers to make
purchases or even a re-purchase of the product which will reinforce their brand. (Packaging
design: creating competitive advantage with product packaging, 2009).

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Even studies in China, for example, shows the influence of food labeling of ingredients and
additive on food purchase decisions in China (Statista, 2014). Only 3% of their population has
no interest in food labeling. It shows that a lack of packaging is a lack of a vital instrument in
the modern marketing activities for consumer goods, which leads to a negative competitive
advantage in the food industry.

(Photo: Statista 2014)

The production hall of Dendermonde is outdated, it was built after World War II in 1949 and
was extended in 1959. The Production hall is very insufficient because every square meter is
used for either storage, production or other activities. Dendermonde growing process is shut
down, as no extra space can be created. Even the machinery is nearing their replacement-
date and due to a lack of sources, it will be hard to replace them. As you can see in the
picture below, it shows that space is lacking for Dendermondes growing process.

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The outdated strategy to hire expensive flex-workers who are not working efficiently and
effectively and have a lack of motivation will slow down the production process. The flex-
workers do not have the attitude, knowledge, and experience to reach the desired outcome
and/or quality. The lack of their experience will have a negative result in the final product
because the production process struggles with waste-levels at a peak of 5%. The average
educational level is low in the factory and the average age of the workers is 45.

Who are the relevant customer and how to apply marketing communication aimed at the
target group? (STP)

Consumers
Consumers of Dendermonde are people who enjoy real tasty dairy products from all ages
also people who care about their health but mostly children and the elderly. These days
people are more conscience of their health so the market for dairy products keeps on
growing. In 2017 revenue in the milk products segment amounts to US$2,84m in Belgium,
the market is expected to grow annually by 1.2% (CAGR 2017-2021). From an international
perspective, the USA shows the most revenue generated US$123,647m in 2017. (Statista,
2017)

Segmentation
There are two types of target groups in this market. The first one is demographic, this is
measured by the age, gender, occupation and socio-economic groups. Dairy products are
consumed by all ages especially the young and the elderly. All genders consume dairy
products and people with high or low-income purchase dairy products because they believe
it is necessary for good health.

Based on the pattern of their utility values, yogurt consumers were categorized into four
segments, Health Seekers (33%) want healthy yogurts, but are not willing to sacrifice taste,
the Product Lovers (24%) eat yogurt because of the health benefits, Anti Healthy Devotees
(36%) are driven by the total taste, textural, and situational experience of consuming yogurt,
whereas Flavor Cravers (7%) are loyal to their brand, and influenced by endorsements from
health agencies. (T. Luckow et al., 2008, Google Scholar)

The second one is psychographic this is measured by the lifestyles, personalities, attitudes
and class. Yogurt and other dairy products are seen and used as a health benefit for mostly
all ages and all classes buy them for the same reason. There are people that incorporated
dairy products into their daily life this becomes a daily routine, a lifestyle. Also there are
other people that use dairy products not as much just enough to keep good health.
Personalities and attitudes also play a big role in dairy consumption.

For example a study done in Kosovo, shows on the market level, a significant share of the
consumed milk and dairy products are imported. This study aims to better understand
attitudes and preferences of Kosovar consumer segments toward milk and dairy products. A
quantitative survey with 300 consumers was conducted in major Kosovo cities.

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There were three distinct consumer segments identified the first one conservative consumer
segment, the socially oriented foodie, and the information-seeking eco-consumer. The latter
two segments are especially open to trying new food products and actively search
information about food. All three consumer segments show strong believe that domestic
milk and cheese are safer than imported products and are of higher quality. (Maurizio
Canavari et al., 2016, Google Scholar).

This example shows how important market segmentation is to really determine and
understand your target group. This makes it easier and clearer knowing who your target
group is, how and where to sell it.

Promotion
One of the weakness of Dendermonde found from the SWOT analysis was that
Dendermondes packaging of the products was outdated and did not look appealing to the
consumers. One of the causes for this is lack of investment into the products. There are ways
we can get Dendermonde back on track and back in to the market through some of these
marketing communication strategies. Starting with promotion, Dendermonde should have a
new look, out with the old and in with the new. Dendermonde should completely change its
packaging into a modern look that will catch consumers eye.

Next Dendermonde should advertise more on TV and also on social media outlets. In this day
and age social media plays a big part in the market and in peoples daily lives, Dendermonde
should take advantage of this and advertise on health and food social media influencers with
a large number of followers. This will get the word out quickly. Dendermonde should also
run an advertising campaign with a famous person in a short catchy film that can be run in
commercial breaks on TV and also on YouTube ads, this will get lots of peoples attention. In
addition, we can put up billboards and get supermarkets to carry the products. Last but not
least Dendermondes website should be updated and modernized so that consumers can go
on the website to look up detailed information about the products and find out more
information, this is another way they can be surer of the products. If we implement these
the right way Dendermonde will succeed.

Previous studies on how forming differentially affects consumer perceptions of value from
equivalent deals indicate that perceptions of deal value from price-saving versus extra-
product promotions are moderated by the stock-up characteristic of the category. An
experiment involving 223 student participants showed that consumable nature, but not
stock-up characteristic, affected frame preference.(Shu Li et al., 2010)
This study shows that how you promote and advertise makes a big difference, there for it is
important to market this product the right way as stated above.

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SQ3: How to optimize the production chain in order to meet the demand?
Dendermonde has a potential market with high demand. Therefore, it is essential and clearly
possible for the company to develop a business strategy in order to give the best
performance in the market. By doing so, the company will be able to achieve higher
objectives and maximize their profits.

For this question, we apply the Marketing mix 7Ps model to analyze and compute a strategic
plan for Dendermonde.

For a tangible product like yogurt, it is important for Dendermonde to focus on improving
their product quality and the packaging in order to attract the current market. To do so,
machinery upgrades and better quality control are highly considered in order to maximize
the capacity and efficiency.

P. Kotler and G. Armstrong (2010) gives a definition of product: Product means the goods-
and-services combination the company offers to the target market. (p. 67)

Brand recognition is one of the elements that lead to the increase in sales by making the
customers know more about the products through various promotional activities and
advertising. Promotion includes all of the activities marketers undertake to inform
consumers about their products and to encourage potential customers to buy these
products.(Solomon et al, 2009, p. 37)

In fact, poor performance of the marketing department is one of the main reasons leads to
the downturn of Dendermonde. There are several ways for the company to shape up its
marketing strategy:

- Build a strong marketing team and doing research about the external environment.
- Focus on advertising, sales promotion to raise brand awareness.
- Participate in other new food fairs.

To every business, price is one of the most important factors leads to success as it generates
revenues and affects a firms profit. By adjusting the price of the product, the company can
increase their sales as well as the capital.
Price is the amount the consumer must exchange to receive the offering. (Solomon et al,
2009, p. 37)

Moreover, it is important for a product to be available in the right place and at the right time
while still maintaining the product quality at the same time. What Dendermonde should
improve is to expand their distribution channels instead of sticking to the old customers for
decades. Place includes company activities that make the product available to target
consumers. (Kotler and Armstrong, 2010, p. 76)

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In every buisiness, people are the factor that directly relates to the outcome of a firm. The
fact their performances are involved in every process and activity of a company makes them
the most important factor to determine the success of it.

Entrepreneurial initiatives such as updating business and operational plans, formulating

marketing policies and regularly analyzing the competitive environment resulted in the
adjustment of strategies such as changing/limiting the product range and reducing
employment - ultimately aimed at ensuring business sustainability.

In the book Leadership is an Art, written by Max De Pree, employees are viewed as
customers. Meanwhile, the role of the manager is to serve the employees and try to help
them maximize their performance.

Meanwhile, no existence of HR department is possibly the main reason for the unproductive
business of Dendermonde as there are problems in every sector which mostly relates to the
staffs.

Replace the number of expensive flex-workers with fixed-term employees would save a lot
of costs for the company and improve the product quality. Moreover, It is essential to train
the staffs and organize frequent team building activities in order to increase the productivity
and the quality of workers. Marketing manager and HR manager should be hired to take
charge of the two departments.

When the firm wants to increase their market share, it is important that the product can
occupy a place in customers mind. To do so, they should provide unique physical evidences
that can attract customers and help them stand out in the market.

Physical evidence is the environment in which the service is delivered, and where the firm
and customer interact, and any tangible components that facilitate performance or
communication of the service. (Zeithaml et al. 2009, p. 313)

To leave a good impression to customers, Dendermonde can improve their customer service
and use the positive feedbacks to boost the image of the company. Creating a clear,
informative and appealing homepage also help improve the firms physical evidence.

A company must have a well-tailored process and attempt to maintain to ensure the
business run effectively. Definition of process is the actual procedures, mechanisms, and
flow of activities by which the service is delivered this service delivery and operating
systems.(Zeithaml et al, 2008, p.286).

A smooth process and well-performed system may not exist without good management and
advanced technology. Furthermore, having a good supply chain will bring the satisfaction to
the customer and increase the value of the firm.

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Recommendations
We have listed in detail what should be done for Dendermonde to improve its overall
performance, to summarize it all here are our recommendations.
Identifying who Dendermondes target groups are and where they are located. In this
case they are mostly of all ages, people who care about their health but mostly
children and the elderly.
Tackle down the suppliers, Dendermonde currently has too many suppliers this
needs to be cut down into small groups to make the logistics department run
smoother.
HR department needed. This is very important to make the internal company run
better. Hiring experience workers to fill in this position will make a big difference.
Training employees will improve the quality of work in Dendermonde.
Building a marketing team is very important in the internal and also in the external
part of the company. A good strong experienced marketing team can lead
Dendermonde in a stable right path to succeed.
Using social media to promote Dendermonde. Social media plays a big part in
peoples lives and also in the market. This is a very good opportunity that should be
taken advantage off.
Dendermonde should change its outdated packaging and modernize it, this will catch
the consumers eye.
Extend distribution channels
Conclusion
Dendermonde can get out of this rough time. If all the steps which are listed above in detail
are executed step by step. This may take time but with investment in the company, good
work and dedication of the managers, C.E.O and the staff, Dendermonde can soon be back
on track.

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