[Type text]

Effective Segmentation and Targeting Strategies

A study on:

Date: 24/04/2011 Hamidul Islam Lecturer, Department of Marketing Faculty of Business Administration American International University- Bangladesh Banani, Dhaka.

Subject:

Submission of Transmittal.

Dear Sir, It is a great pleasure for us to submit the report to you entitled by Effective Segmentation and Targeting Strategies: A study on Partex Group. It has been a great pleasure for us to work on this report as it provides many opportunities to gain insights about market segmentation and targeting strategies. We are grateful to you for your continuous guidance in preparing the group project. Sincerely yours,

Md. Ikram Hossain Id: 10-16237-1 Hyok Sin Id: 10-16331-1 Md. Tareq Hossain Id: 07-08990-2

Acknowledgement
By the cordial mercy of Allah, now we are able to submit our report to our honorable faculty Mr. Hamidul Islam. We strongly believe that it would not be possible preparing such a report without Almightys grace. Now we would like to thank our honorable faculty for his keen efforts and invaluable guidance. We would like to express gratitude to our university faculty members. They should be remembered because they produced the platform of our knowledge. Finally we are really grateful to the other employees and officers of Partex Group for their help and valuable advice. Again, we like to thank our honorable teacher for giving us such a chance in completion of the report

Executive Summary
This report mainly deals with the segmentation and targeting strategies implemented within the Partex Group. In order to find out the bases of segmentation and different line stretching and line filling policies within the Partex Group, various kinds of resources and information have been gathered mainly thorough secondary research methodology. It also discusses the market offerings, company overview and practice of different marketing concepts. It also holds a product mix table describing the different types of product lines, its width, length and also its consistency. As the report has been prepared in an academic way, it may lack some realistic point of views in terms of marketing strategies. We also included some recommendations for the Partex Group to improve their marketing process. We greatly hope that this report would fulfill all the requirements set by the honorable faculty and we are always ready to accept our shortcomings and learn from our mistakes.

Table of Content
Contents Letter of Transmittal Acknowledgement Executive Summary Page No 1 2 3

Contents

Page No

CHAPTER ONE Introduction of the report

01. Company Overview 02.Objectives of Study 03.Limitations 4-5 6 7

CHAPTER TWO Methodology of Study

Data Collection 8

CHAPTER THREE Findings and Analysis

01. List of Market offerings 02.Practice of Marketing Concepts 03. Business Portfolio 04. Product Mix Table 05. Line Stretching Strategies 06.Bases Of Segmentation 07. Target Marketing Strategies 08. Pricing Strategies 09. Evaluation Of Close Competitors 9 10-11 12-14 15 16 17 18 19 20

CHAPTER FOUR Suggestions

01 . CHAPTER

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FIVE

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Conclusion
Reference and Bibliography Appendix 23 24

Chapter 1 Introduction of the Report

1. Company Overview
Background: Partex Group is among the large Bangladesh private sector manufacturing and service based enterprises, owning and operating over twenty units giving value for money to all customers.

The group started modestly in 1959 in tobacco trading and with prudent entrepreneurship of our Founder Chairman Mr. M.A. Hashem. Today we have a stake in tobacco, food, water, soft drinks, steel container, edible oil, wooden board, furniture, cotton yarn and the IT sector. After Bangladesh was established our Chairman set up M/S Hashem Corporation (Pvt.) Ltd. in Chittagong city meeting the large demand of food and materials needed for sustaining the needs of a new nation through imports. From importing to import substitution was the next logical step and the stepping stone into the manufacturing sector, which has matured to the multi million dollar diverse investment of the Partex Group today. A dedicated work force and committed board members led by our Chairman and backed by a market oriented corporate strategy has been the cornerstone of our success. Today the group has over twenty family owned private limited companies with a sizable turnover. Ours is a dynamic organization always exploring new ideas and avenues to expand and grow further.

Mission and Vision: THE AIM The Sky is not the limit for us, but our expectation is within limits. Therefore, our imagination soars beyond conventional barriers. We share or destiny with our beloved motherland. We want to serve her in the greater quest for national uplift. THE WAY To sincere traveller, the way is never too long. We believe in "progress in diversity and service through entrepreneur". We are, both merchants and missionaries, doers and

dreamers, entrepreneurs and professionals. We are futuristic with emphasis on creating thinking and dynamic action. ...and THE SPIRIT Enterprise is our spirit. We manufacture superior import-substitute consumer and industrial products. Our cutting edge precision leads to greater public utility and hygiene, with a great care for the environment and human inhabitation. It is the very ingredient that gives our organization the integrity upon which our reputation is built and we zealously guard it everyday. Many a thousand minds of our group contributed their gathered knowledge to keep the the wheels rolling that in turn leads us to our goal. This cumulative strength of knowledge is required, today , to find new solutions for the manifold problems of fastchanging economic cultural and ecological milieu.

2. Objectives of the study

Broad Objective: This report is mainly intended to find out more about the Partex Group in terms of their segmentation and targeting strategies in the light of marketing management. Today, effective segmentation and target marketing strategies play an important role increasing the revenue and the actual profit of the market. This report closely looks into the various aspects of segmentation of the Partex Group and how they are targeting their customers.

Specific objective: This report then specifically deals with the list of market offerings, practice of marketing concepts, list of SBUs within in the Partex, different types of line stretching strategies and etc.

3.

Limitations of the Study

This report holds some limitations of its own as it only deals with the limited aspects within the Partex Group and it also has some setbacks as the report is done without any actual survey on the Partex Group. As the resources for the report was mainly secondary, it holds little impact on the current happenings and the strategies implemented within in the Partex Group. And as it deals only with segmentation and the targeting strategies of the Partex Group, it may be misleading when trying to judge the whole marketing strategies performed by the Partex Group accurately.

Chapter 2 Methodology of the study

Data Collection
Most of the data used in this report are mainly secondary sources as our group could not take any actual surveys on the topic among the Partex Group itself. Some of the

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information are from Partex Groups official websites and various other articles and some of them are from various kinds of magazines and newspaper articles. As we failed to obtain any primary data on the topic, the report would be much more theoretical and subjective rather than objective based on actual statistics.

Chapter 3

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Findings and analysis

1. List of Market offerings

Following is the list of market offerings of the Partex Group and their various sizes and their relevant prices. (Prices may be different from retailers to retailers.)

No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Name of Product Danish Sweetened Condensed Milk Danish Milk Powder Danish Milk Powder Danish Mango and Orange Juice Silver Cross Full Cream Sweetened Milk Danish High-Energy Biscuit Danish Pineapple Biscuit Danish Premium Assorted Biscuit Danish Assorted Biscuit Danish Glucose Biscuit Danish Lemon Biscuit Danish Doreo Biscuit Mckenzie Vegetable Biscuit Mckenzie Calcium Danish-G Royal Crown Cola

Size Net 397Gm Net 1000Gm Net 500Gm Net 250ml Net 397Gm Carton box Carton Box Tin Tin Carton Box Carton Box Carton Box Carton Box Carton Box Carton Box 500ml, 250ml

Price(TK) 40 420 245 20 37 10 30 350 350 10 10 60 130 170 80 25, 15

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17 18 19 20

RC Cola (Diet) RC Cola (Lemon) RC Orange Mum Mineral Water

500ml, 250ml 500ml, 250ml 500ml 1.5liter, 500ml

25, 15 25, 15 25 20, 12

1. Practice of Marketing Concepts

Danish Food Products and Partex Beverage make up the biggest financial profit for Partex and those funds are then invested to other sister companies to improve both quality and quantity of their products.

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Danish Food Products and Partex Beverage are combining Production Concept and Marketing Concept. If closely examined, Production Concept plays more important role in the Partex management. Production Concept is the idea that consumers will favor the products that are widely available or highly affordable. In light of this theory, Partex Beverage and also Danish Food Products are both having large production and effectively using various distribution outlets in order to attract more customers and to increase their satisfaction level thorough low price and availability.

For example, customers can easily buy Danish food products and

beverages

in almost every shopping malls or small shops with relatively low price. Danish condensed milk, Danish Fruit Juice, Danish Milk Powder and Danish Biscuits are all produced in bulk quantity and the company tries to maintain the lowest possible price in the market by producing in large quantities. Partex Beverage is of the same case. They are also producing beverage products in large amount and they are also promoting their products thorough effective communication so that customers would find the products on every possible shelf of shops. RC Cola, RC Orange and Mum mineral water are also well established in the minds of the customers and their impression on those products are also very positive, which can later act as a great base to improve the sale and image of the company. The way that Partex can reduce the price of their products is that they are producing in bulk amount and because of their relative low price, they can get closer to their customers more than their competitors do.

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Partex is not only following the Production Concept but also following some of the Marketing Concept. They do not produce products just out of blank. They are consistently doing market research and development to pin point the exact need of their customers and to deliver the desired satisfactions better than competitors do. Partex has a very effective management team to manage the needs and wants of the target market and based on the results, they are producing needed products with state of the art technology. By relying on the market surveys and researches, the management team is trying hard to meet everyday changing demand of customers. Partex Beverage and Danish Food Products are also providing freedom of choice with many different types of products of different size, packaging and flavor.

Partex is also well-known for its quality. Danish Food Products have achieved the quality management certificate ISO 9001-2000 and for producing quality product Danish Condensed Milk has achieved the HACCP certificate at first in Bangladesh.

Combination of production concept and marketing concept is the key to their success and production concept is the main backbone for their company.

2. List of Business Portfolio

List of Strategic Business Units: Partex can be categorized into separate SBUs based on their characteristics and individuality.

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Danish Condensed Milk: Danish Condensed Milk Bd. Ltd. is the most rewarding unit of Partex Group; the unit produces Danish Condensed Milk in 397 Gm. cans, Danish Milk Powder in 1000 Gm. & 500 Gm. sachet packs and Mango & Orange Juice in 250 ml aseptic packs. Danish Condensed Milk is the first in the Condensed Milk Industry started operation during the year 1991 in the country and possessing the leading position in the local market. Presently Danish Condensed Milk is being exported in Nepal, Bhutan and some parts of India in bulk quantity. It has been well appreciated in those markets as a result it is expanding day by day in foreign markets.

For quality management Danish Condensed Milk bd. ltd. has achieved the ISO certificate. It also has achieved HACCP certificate for maintaining stringent quality in all phases of production.

Danish Milk Powder: is another SBU of pertex group. This unit of the Group was launched with the aim of marketing high quality full cream milk powder throughout the nation. The factory of Danish Milk Bangladesh Ltd. is located at Kanchpur, Narayanganj. The company markets "Danish" brand spray dried full cream milk powder both in 500 grams and 1000 grams sachet packs, enriched with vitamin A and D. The products are packed in sachets by highly sophisticated Automatic FFS (Form, Fill and Seal) machine. The products are marketed through its vast nationwide distribution network by the company's distributors covering the whole of Bangladesh. At a later stage, the company has a plan to market powder milk in tins & other pack sizes.

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Danish Fruit Juice: is another SBU of Partex. Recently commissioned, this unit produces highest quality fruit drinks under the brand name Danish Fruit Juices. Bangladeshi customers have welcomed the mango fruit and orange flavored drink, hygienically packed in 250ml aseptic packs. Every age group can enjoy this drink, especially when served chilled in our hot summers.

Danish Biscuit: comprise another SBU of Partex.

Danish Foods Ltd. is

producing Biscuit of international standard in the world's most modern hi-tech plant maintaining the most hygienic way. They are offering the very best quality of biscuit in the country. Danish Biscuit contains nutritional values like vitamin, mineral, calcium, protein etc. those are essential for human body. Danish has got the production capacity of 40 tons Biscuit per day with its titanic plant. At present we have launched twelve variants of Biscuit and another six variants are in the pipeline. Danish Biscuit has been exported to Nepal. We are in the process of expanding our export market.

RC: Rc drinks are another SBU of Partex. RC drinks combine RC Cola, RC Orange, and RC Lemon. These products are already well-established locally with profound history of market presence since 1997.

Mum mineral water: is another well-known SBU of Partex. Although it is in the fierce competition among other mineral water companies, it is well received by many customers and they are doing their best to maintain long-term relationship with their customers based on the top-most quality and wide availability.

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3. Product Mix Table Product Mix Length Product Mix Width

Food and Drinks Danish Condensed Milk, Danish milk powder, Danish Biscuits, Danish Fruit Juice, RC cola, Mum Mineral water, RC orange, RC Lemon, Upper 10, Furniture Partex Furniture, Paper Marine Transportation Particle Boards Clothes and steel Amber Corvee paper maritime and pulp, Partex Star Amber Particle board, cotton, Partex Denim, Rubel steel drums,

Product Mix Depth:

As shown in the table of product mix of Partex Group, under the category of food and drinks, the product line is very lengthy and its depth is also incredible as those brands hold numerous different versions of different sizes or colors or tastes. For example, under Danish Biscuits, there are tens of different versions of cookies of different price and most importantly different taste. Also under the RC brand, there are some different versions of RC such as RC Orange, RC Cola, RC lemon and Upper 10, which is another variation of RC brand. Under the category of Danish Condensed Milk, there are various kinds of packaging based on the likes of different customers.

Product Mix Consistency:

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However, when considering the consistency, the product mix of Partex Group is not that efficient as the different categories it holds are all of different fields. Except the category of foods and drinks, the rest of categories are of various different fields which require construction of different types of factories, employment of different skilled labor and establishing different distribution lines. As the fields it is operating in is so different, it obviously require large sums of money. In order to attract larger profits, the Partex Group may need to look into those aspects of consolidating the consistency level of its product lines.

Line Stretching Strategies:

Partex Beverage Ltd. has stretched the companies product line in both upward and downward line stretching strategy. Those are:

Upward Stretching: From Danish High-Energy Biscuit, Danish Pineapple Biscuit to Danish Premium Assorted Biscuit, Mckenzie Vegetable Biscuit, Mckenzie Calcium etc. Downward Stretching: Silver Cross Sweetened Milk

Target Marketing Strategies:

Undifferentiated: As our company uses production concept, thereby we mostly use undifferentiated target marketing strategies to target consumers. For Example: 250 ml of Royal Crown Cola, RC Cola (Diet), RC Cola (Lemon), RC Orange etc. all of these soft drinks stands for a same amount of price- 15 Tk.

Differentiated: Our company also uses marketing concept, so differentiated targeting marketing strategies are also practiced by our company. For Example: Danish Doreo

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Biscuit, Mckenzie Vegetable Biscuit, Danish Premium Assorted Biscuit etc. stands for different range of pricesPricing Strategies:

Pricing Strategies:
Market Penetration: As a producer of Fast Moving Consumer Goods (FMCG), Partex Beverage and Danish Food Products are both having large production and effectively using various distribution outlets in order to attract more customers and to increase their satisfaction level thorough low price and availability.

Evaluation of Competitors:
As a producer of common food products, Partex Beverage and Danish Food Products has both Direct & substitute competitors regarding the Product category. Some competitors of our company are: Direct Competitors: Pran, Acme, Akij etc. Substitute Competitors: Energy drink producers like shark, tiger, speed etc.

Appendix
We use a questionnaire consists of 10 questions. Our questionnaire is given below: American International University Bangladesh (AIUB) Topic Name: Effective Segmentation and Targeting Strategies A study on Partex Beverage Course Title: Marketing Management Course Instructor: Mr. Hamidul Islam

Name: Sex: Occupation:

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Address:

1) Which brands product do you use? o Partex o Pran o Acme o Others ______ 2) Which companys product is more available in your area among: o Partex o Pran o Acme 3) Which Powder Milk do you use in your home? o Danish Milk Powder o Fresh Milk powder o Marks Milk Powder 4) Which Mineral water you use in your house? o Mum o Fresh o Spa 5) What do you think, what kind of RC flavor Partex should introduce in Bangladesh? o o o o o o Ginger Twist Diet Lemon Lemon Low Calorie Peppermint Honey and Lemon If other, _________________

6) Which Biscuit do you use in your house? Danish High-Energy Biscuit Al-Amin Pineapple

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Mr. Cookie

7) What do you think about the price of Partex food products, is it affordable? Highly dissatisfied Dissatisfied Satisfied Average Highly satisfied 8) What do you think about the quality of the products of Partex? Highly dissatisfied Dissatisfied Satisfied Average Highly satisfied 9) Whats your opinion about packaging of Partexs product? Highly dissatisfied Dissatisfied Satisfied Average Highly satisfied 10) Which FMCG product you want to suggest Partex to launch in Bangladesh market? Ans: _________________________________________________

Reference
www.google.com

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 www.wikipedia.com www.Partexgroup.com www.Partexbeverage.com.bd

Bibliography
1. Principles of Marketing,

By, Philip Kotler and Gary Armstrong, 12th Edition.

The End

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