Executive Summary
This document portrays the current status of Cocola Instant Noodles and recommendations to improve the product to generate more demand for it. First, the history of Cocola Food Products Ltd. has been briefly discussed. Then the market for instant noodles is reviewed using the information collected by Nielsen. The market for instant noodles is growing at 40% MAT. Then, the product portfolio of Cocola has been evaluated to find whether they conform and which markets they have targeted to serve. Then a competitor review was shown to pinpoint Cocola’s strategic location and the strategic positions taken by its competitors.
Then, the market has been segmented using two variables: demographic and geographic. Cocola can serve the niche markets at present provided by the B2B prospects and also use its brand reputation to create awareness for Cocola Instant Noodles (CIN). Cocola have around 200 distributors in Bangladesh and this is one of their strengths since they can make all their general purpose distribution carry this item. So, their main challenge is create awareness, interest and desire among the target market. Till now, they have not been successful to communicate to major portion of their target market about CIN. The primary target market for Cocola is children between the ages 7-12. And secondary target market is mothers who make the purchase in most case.
Then, analyses were done to find out the strengths and weaknesses of Cocola instant noodles, Maggi instant noodles and Fu-Wang instant noodles. The market for this product is growing and this product itself is in growth stage. This calls for large promotional spending in order to capture maximum market share. Cocola have higher resource constraint compared to Nestlé, which is a MNC. Thus, Cocola has to be content with follower strategy at present. PEST analysis revealed a trend of dual working parents rising in Bangladesh. Thus, the need for quick snack items is growing. Using conjoint model, the most important wants of consumers were identified as taste and price.
After analyzing the current situation, the marketing objectives were set and they include all the 7Ps of marketing mix. Product differentiation will be not only in terms of packaging and labeling but also in terms of taste. Tastemaker is the most significant point of differentiation now. So, giving the target market the taste they desire most will attract and create a loyal customer base. Price will no longer be set at going-rate but value pricing will be used. Consumers must feel that the value provided by this product created delight for them. Meeting their expectations in terms of quantity and quality is not enough. Providing different tastes will make consumers feel they have a choice.
From time to time, promotional efforts in terms of discounts and gifts will create delight. Cocola needs to make sure that they have a separate shelf in supermarkets as that is where most sales volume can be achieved. Also, the sales force will no longer be working on a straight commission basis. They will be given commission based on the number of accounts they create and sales volume they generate. It will be communicated to the sales force clearly and firmly with no room for misunderstanding.
Finally, a control system has been incorporated in the marketing objectives to guide the future actions to be taken. Feedback from the sale of product re-launch after first three months will be used to determine the demand for each product variant. That will determine the number of manufacturing lines that will be operated from the fourth month. Suppliers of the tastemakers will initially be given a small order to cover three month production. Then, the demand for each variant will determine how much of each will be bought. Again, packaging costs will be same but the different colors will mean different manufacturing lines have to be run for each or they have to be packaged alternatively. Thus, training the workers so that the right tastemaker is put in the packet will be given. This will be easy as different colors will be used for each taste. The package of the cake and tastemaker will have the same color to make learning easy. This is a two-year marketing plan and the results and feedback from this plan will provide insights to prepare the next marketing plan.
Introduction
Problem and Purpose
The purpose of the report is to improve the marketing mix and build a marketing plan for the product Cocola Instant Noodles of the Cocola Food Products Limited. Although the Cocola Egg Noodles of the company is very well known and successful in the market, the instant noodles, which was launched a couple of years back, failed to gather
significant market share or gain respectable market growth. They are facing intense competition from both Maggi and Fu-Wang. The main problem faced by them is the domination by Maggi in the instant noodles market in terms of brand preference and also in terms of product variety and quality. This problem is further augmented by
inefficiencies in the distribution channel of Cocola and also the image of Cocola Instant Noodles as being imitators of Maggi Instant Noodles.
Scope
This report deals with the marketing strategy for Cocola Instant Noodles. It has been prepared by analyzing the present situation of Cocola Instant Noodles, Maggi Instant Noodles and Fu-Wang Instant Noodles in the market. Also involved are the current marketing strategies, the product and marketing mix and the distribution network used by these companies. Based on the surveys which were conducted, a new marketing strategy has been proposed.
Sources and Methods of Collecting Information
The sources of information were interviews of the employees directly related to the marketing of the products of the respective companies, regional surveys taken from various areas, and a consumer survey of a randomly selected group of people. The interviews were based on a standard questionnaire and the interviewees were asked for their own opinions as well as the factual information of the respective companies. The regional surveys were directed at the shopkeepers of various places. Finally, the consumer survey was based on a questionnaire which has been attached with the report. After gathering the data from these surveys, analysis was done based on them to get the present situation for the product and the insights for the future provided. And using those guidelines, a new strategy was formulated.
Company Review
Background
Cocola Food Products Ltd. started its journey back in 1973 as Baby Food Products which was a sole proprietorship. It became a private limited company in 1985.
The company initially produced Cocola candy and toffee. Gradually they started producing various kinds of biscuits. Cocola was the first company to introduce the use of foil paper in the food products industry. The foil paper was imported from Singapore, Japan and Korea. Cocola acquired Sunstar Beverages as a sister concern. Now it has two SBUs; Cocola Foods and Sunstar Beverages.
Products
Some of the products of Cocola Food Products Ltd. are:
(a) Noodles: (b) Biscuits:
1. Cocola Egg Noodles 1. Cocola Champion Biscuit
2. Cocola 2 Minute Instant Noodles 2. Vita Plus Biscuit
3. Cocola Cook Noodles 3. My Protein Marie Biscuit
4. Cocola Mojadar Egg Noodles
(c) Candy & Chocolates: (d) Wafers:
1. Gems 1. Banana Wafer
2. Fruit Candy 2. Chocolate Wafer
3. Kiss Candy 3. Pineapple Wafer
4. Lichi Chocolate 4. Milk Mini Wafer
5. Milk Fruity 5. Chocolate Roll Wafer
6. Milk Candy
(e) Chips: (f) Drinks (Non-Carbonated)
1. Potato Chips 1. Fruity Cup
2. Caramel Corn Crackers 2. Lichi Gel
3. Twister – Tomato Flavor
Mission Statement
Since Cocola Food Products Ltd. does not have a mission statement, we have proposed one based on the objectives and vision of the management.
“To meet customer expectations and trust by providing an assortment of affordable nutritious products of good taste and convenience without compromising on quality or hygiene.”
Market Review
Overview of the Noodles Market
The market size for noodles is 9000 tons+ per year (Approximate). Two types of noodles are available in the Bangladeshi market. They are:
i. Instant Noodles
ii. Air Dried Noodles
Instant Noodles:
Instant noodles come with a packet of flavoring called tastemakers. Instant noodles are eaten after being cooked in boiling water for 3-5 minutes and added with tastemaker.
The market size for instant noodles is 4000 tons (approx.) which is equivalent to 45% of the total noodles market. The current market leader in this segment is Maggi by Nestlé with a market share of 57% (Oct ’08). Source: Nielsen
Air Dried Noodles:
Air dried noodles, also referred to as traditional noodles, is first boiled in water, then the water is drained and finally it is cooked with oil and other ingredients like egg, vegetables, etc. The market size for instant noodles is 5000 tons (approx.) which is equivalent to 55% of the total noodles market. The current market leader in this segment is Cocola Egg Noodles with a market share of 64% (Oct ’08). Source: Nielsen Since this report focuses on marketing Cocola Instant Noodles, only the market for instant noodles will be reviewed.
History of Instant Noodles in Bangladesh
Cocola Food Products Ltd. introduced stick (air dried) noodles in Bangladesh in 1987. Instant noodles were first brought to Bangladesh by Fuji. It came with a tastemaker and a small packet of oil. Now oil is not given with any instant noodles due to packaging problems. Within a very short time, in 1997 Transcom Food brought Maggi Instant Noodles from Pakistan. Now it is the flagship brand of Nestlé Bangladesh Ltd. Other companies such as Banoful and Korean company named Tasty followed them with their own instant noodles. Cocola Instant Noodles was launched in 2001. The current competitors for Cocola Instant Noodles are Maggi, Fu-Wang, Bangas’ Dragon, etc.
Companies like Sajeeb Corporation, Akij Group of Industries and Square Consumer Products Ltd. are also thinking of introducing their own instant noodles.
Market Trends
The instant noodles industry has been growing at 40% With the increasing number of working mothers, it has become a very popular tiffin for children and evening snack for the family as it is very easy to cook and takes less time to prepare than the air dried noodles. The growth is also driven by price point players with their multi-packs.
There has been a clear emergence of a price point segment diving the market into Maggi and others especially Fu-Wang. The consumers are price driven, looking for value for money.
There has also been an increase in the awareness of nutritious food. Emerging “modern trade shopper”
Market Needs
The basic needs of the instant noodles market are quick preparation time, tasty and healthy product, and a certain variation of tastes, which means different flavors. These needs can be further put into categories based on the use and preparation of the instant noodles.
In Bangladesh, we use instant noodles mostly for lunch break or snack purposes for the children as well as for other members of the family in school, work and at home. In these cases variation of tastes and quality of the product comes in action. When the children are given noodles as lunch, they prefer to have some added taste and variety to
their food. If we give them the same flavor all the time, they lose their interest in the food. This same condition applies when noodles is used as snacks. This is one of the many reasons why Maggi captured market share so quickly and also for this reason most of the instant noodles come with more than one flavoring.
Another factor is preparation. Women who are homemakers can afford to take time to prepare noodles either for snack purposes or for their children’s tiffin by mixing several ingredients in it. And for this reason the Cocola Egg Noodles have been popular and has a large market.
But recently, in our country, there have been changes in the role of women in a family. Today, a lot of mothers living in the urban areas of the country are working mothers and they play a vital role in family’s income and purchase decision making. For the working mother, the time and the process of preparation is quite important. Working mothers prefer a quick and hassle-free method of preparing food. And thus, a rise in the number of working women has also induced the need for food products that are easy to cook and takes less time to prepare.
Product Review
Summary
The noodles section of the Cocola Food Products has the following types of noodles which they produce, package and sell:
Cocola Egg Noodles
Also known as the Cocola Stick Noodles in most of the markets, this has been the most successful of all the Cocola noodles products. The unique thing about this product is the preparation method. The Egg Noodles is made up of air dried noodles sticks. It naturally comes with a single flavor and with two packaging (red outer line or yellow outer line, red outer line being the more popular). According to Cocola and also its competitors, this preparation method gives Cocola a competitive edge over all others, because none of the other companies have as good machinery for making air dried noodles as Cocola does. And for this reason, this air dried Egg Noodles has been the most popular of all the Cocola Noodles products.
Cocola 2-Minute Instant Noodles
This is the instant noodles product of Cocola. A packet of instant noodles contains a noodles cake and a flavoring known as taste-makers. Cocola Instant Noodles is available in the market in two flavors – Chicken Masala and Beef. The taste-maker is actually produced in Japan but they are imported from Singapore. The preparation method for
this type of noodles is completely different from that of the air dried noodles. The cooking method is also different. This noodles mostly targets those who wants to have noodles with as less cooking hassle as possible. But this Cocola product is far behind than the Egg Noodles, as the market is mostly dominated by Maggi and Fu-Wang.
Cocola Cook Noodles and Cocola Mojadar Noodles
These products are comparatively new in the market. Both of them contain the same type of noodles but in different packages and different sizes. The Cook Noodles is of a larger size, mostly for families. The Mojadar Noodles is of a smaller size. The noodles cake that is used is similar to the instant noodles in shape but contains air dried noodles.
So, although they have the same appearance as the instant noodles, the cooking method and taste are different because of their production method. For this marketing plan we have chosen the Cocola Instant Noodles and we have tried to show the way in which we can increase the market share and awareness of this product.
Availability
As will be discussed later in detail, Cocola Food Products Ltd. has a good distribution network. Their products reach a lot of places where other companies fail to deliver their goods. Although this distribution network is based on other products rather than Cocola Instant Noodles, nevertheless, Instant Noodles also reaps some benefit over this broad distribution network. The Instant Noodles is available in almost all the places whereother Cocola Food Products are available. But, since they are not very popular in the country-side, their numbers are small. As all of our surveys showed, many village shops that have noodles supplied to them (mostly Cocola Egg Noodles) also have few packets of Cocola Instant Noodles available in their stock.
Competitive Review
Maggi Instant Noodles (Nestlé Bangladesh Ltd.) Maggi Instant Noodles is the biggest player in the instant noodles market in Bangladesh with a market share of almost 57%. It is a brand under the flagship of Nestlé Bangladesh Ltd. Since this product is verygeneric and variations are possible only in the form of taste and quality, the market is very competitive with high entry barrier and exit barrier. It requires specialized machinery to produce the cake. The
tastemaker for Maggi is imported from Malaysia while Cocola brings its tastemaker from Taiwan.
Product
The product range includes:
- Maggi 2 Minute- Masala (Pack size: 62g & 248g) @ Tk.13 & Tk.52
- Maggi 2 Minute- Curry (Pack size: 62g & 248g) @ Tk.13 & Tk.52
Pricing
Maggi gives trade discounts to retailers but consumers are not directly given any concessions at present. It has been successful to make the economy pack (4 packs in one) look less expensive compared to its single pack. Consumers feel they are buying at a lower price though the price is same. The general conception with large packs being more
economic is being exploited successfully.
Marketing
Nestlé has a massive marketing budget worldwide. It can cover Bangladesh market by placing advertisements on Indian TV channels like Cartoon Network, Star World, etc. In Bangladesh, Maggi has become the other name for instant noodles. People mistake Cocola instant noodles as “Cocola’s Maggi” and Fu-Wang instant noodles as “Fu-Wang’s Maggi” in the rural and semi-urban areas. Nestlé Bangladesh Ltd. provides shelves in various supermarkets and has good delivery system. Its marketing strategy includes the following:
- Innovation & renovation
- Low cost and highly efficient operation
- Product availability- Maintain existing distribution with more effective Point of Purchase (POP) excellence
- Consumer communication- Establish Maggi as the best tasty and healthy noodles, which cannot be compared.
Goals
- Be the no.1 preferred snacks in Bangladesh for children aged between 10 to 12 years
- To become no.1 preferred snacks for all kids in the country
- Establish Maggi as the best tasty and healthy noodles (for children), which cannot be
compared
Competitive Position
Nestlé is finding it very easy as the market leader in this category with its brand Maggi. Maggi has successfully captured market share, mind share and heart share of its target market. When Cocola slashed its price by Tk. 2, Maggi’s sales was unaffected. Price alone cannot upset Maggi’s loyal customer base. Internationally, Maggi has been criticized of claiming to provide protein though its protein content is lower than the amount needed daily.
Fu-Wang Noodles (Fu-Wang Foods & Beverage Ltd.) Fu-Wang Noodles is the market challenger with 19% market share. It is owned by Fu-Wang Foods & Beverage Ltd. in Bangladesh. They import tastemaker from Taiwan. Their noodle is to be cooked for 3 minutes not for 2 minutes like the other instant noodles. Consumer preference is not affected though.
Product
The product range includes:
Fu-Wang Noodles- Beef (Pack size: 70g, 280g, 560gü & 700g) @ Tk.12, Tk.45, Tk.95 & Tk.110
Fu-Wang Noodles –Chicken (Pack size: 70g, 280g, 560gü & 700g) @ Tk.12, Tk.45, Tk.95 & Tk.110
Pricing
Fu-Wang gives trade discounts to retailers but consumers are not directly given any concessions at present. But it has priced its 10-in-1 pack at Tk. 110 which has resulted in huge trade volumes for them. It has been successful in increasing its sales volume in a short time.
Marketing
Fu-Wang is currently placing shelves at all major supermarkets. This move was taken recently and thus time will tell its effectiveness. It is also considering the production of TV ads to be broadcasted in the major Bangladeshi channels. Due to lack of initiative on their owners’ part, marketing seems to be an undernourished child of the company.
Competitive Position
Fu-Wang is set to topple Maggi but lacks in marketing initiatives. With only retailing promotion and lack of innovativeness, they seem to progress slowly. Their main differentiating point is their tastemaker which is less spicy and tastes like chicken soup. Their target market is different in terms of taste.
Others
Currently there are some nichers like Dragon Noodles (Bangas Ltd.) and some foreign brand of noodles from Thailand, Indonesia and Malaysia. However, Sajeeb Corporation, Akij Group of Industries and Square Consumer Products Ltd. are planning to introduce their noodles division soon.
Distribution Review
Overview
In the Bangladeshi instant noodles industry, the distribution channel mainly comprises a single distribution channel where buyers may be classified as habitual shoppers. The distribution channel is crucial because push strategy is more or less widely used by the companies involved in this industry. Most of the companies use intensive although some use selective distribution technique.
The distribution channel is often a two-level indirect marketing channel consisting of the manufacturer, wholesaler (known as distributor), retailer and the final consumers. There is no specific distribution channel for Business to Business (B2B) market, but some of the companies are now thinking about catering to the untapped B2B market. The distributors play a major role in breaking bulk and supplying the product in different markets throughout the Bangladesh. The structure and number of distributors of the major players vary in terms of number and size, as seen below.
Cocola Food Products Ltd.
Cocola Food Products Ltd. is a well known company in the Bangladeshi fabric with popular products like Cocola Egg Noodles (air dried noodles), Champion biscuit, Gems, Wafers, etc. The company has around 175 distributors throughout the country. There are some sole distributors of Cocola, although numbers could not be provided. The vast distribution channel is a huge strength for CIN, which has not been levered. The distributors are paid a commission of 7-8% as Cocola pursuits push strategy.
Nestlé Bangladesh Ltd.
Nestlé Bangladesh Ltd. is a large-scale multinational company providing various kinds of food items like coffee (Nescafé), chocolate (Kitkat), baby food (Cerelac) in addition to Maggi 2-Minute Noodles. They have 78 distributors under 48 sales territories. The distributors are paid a commission of around 5% on sales and they have indeed been successful in capturing more space in retail stores and superstores.
Fu-Wang Foods & Beverage Ltd.
Fu-Wang Group is a conglomerate where Fu-Wang Foods & Beverage Ltd. manufactures various food items like cake, biscuit and bread apart from instant noodles. The group as a whole has a distributor base of 950. No concrete information could be provided for Fu-Wang Foods and Beverage Ltd. regarding the number of distributors. It pays commission of 5% to the distributors. The company also sells directly to large-scale retailers and it is the only company following multi channels. Fu-Wang, like Cocola, has failed to utilize the distribution channel to the maximum.
In spite of having a limited distribution channel Nestlé has been very successful in distributing Maggi. In fact, Maggi is widely available in semi-urban areas and suburbs. Although Nestlé has limited number of distributors, the volume traded is large compared to that of Cocola or Fu-Wang. Also, Cocola and Fu-Wang have not set up specifically territorial distributor which has resulted in some overlaps.
Logistics
In this industry warehousing is provided mainly by the distributors although the manufacturers have warehouses too. Inventory management is not very sophisticated here. Transportation is provided by the distributors in most cases. Orders are taken by the sales representatives working under distributors who visit stores once a week in average (in Dhaka) and deliver the products in 2-3 days. It is important to note that Nestlé has successfully built profitable partnership with the distributors by placing advertisements of Maggi on their vehicles.
Channel Conflict
Since most of the companies are involved in a singular channel, there is no channel conflict. Fu-Wang, however, sells directly to large-scale retailers including superstores and department stores (removing distributors). However, the retailers have to place orders on their own before the goods can be delivered. Channel conflict is not prevalent because orders placed are usually in bulk (which serves the function of wholesalers) and also because considerably few transactions are taking place.
External Environment Analysis (PEST)
Economic Environment
Instant noodles are a growing product and thus price should be competitive to capture market. The economic factors we find relevant to instant noodles are:
Global price surge is heating up edible oil market. In 2008, the price was Tk 87-90ü per litre1. This year, the price has come down to Tk 60 per liter, which is still high.
Instant noodles contain a cake already baked in oil and thus require no additional oil. More women are availing employment opportunities and working mothers will help drive the demand for ready-to-cook snacks. As Bangladesh is undergoing extensive industrialization, many household maids areü leaving their current jobs and entering the factories for better salary and better social status leaving homes to be tended by part-time helps or by the families.
Global recession is causing prices of essential items to go down and makingü complimentary snack items more affordable.
Social and Cultural Environment
Social factors will affect customer’s needs and perception of what they want and thus shape potential market for our product. The social factors we see affecting our product are:
There is a trend of both parents working in all social classes leaving the children to tend for themselves and instant noodles can be cooked by practically anyone who knows how to boil water.
Children with both parents working and part-time help is becoming more widespread, leaving them to arrange lunch and afternoon snacks using the microwave oven or stove.
Technological Environment
Currently, the technological environment is not directly affecting the demand for instant noodles. The technology to produce instant noodles is acquired from experts from Taiwan, Japan and other countries.
Political and Legal Environment
The political environment has been an influence in promoting certain brands for government offices. Currently, government offices do not demand noodles as they have their own canteens. Legal side of this product would include complying with the Bangladesh Standard Testing Institute (BSTI). That would include providing the correct information on the packaging label about nutritional facts.
Marketing Strategies Positioning
Perception of Cocola Instant Noodles
Many consumers in urban and the rural areas are unaware of the existence of Cocola Instant Noodles. That is mostly because of Cocola’s lack of promotion of instant noodles and also because of the fact that competitors like Maggi and Fu-Wang occupy a concrete position in the consumers mind. Few of the consumers who are aware of the existence of the product mostly refer to it as a copier of Maggi. So, Cocola Instant Noodles does not have any proper or unique positioning in the market. However, Cocola Stick Noodles is very popular in the air-dried noodles market. Cocola Food Products has other popular products like candy, biscuits and such. Most think of Cocola stick noodles when they are asked to describe Cocola.
Perception of Competitors
Maggi
Maggi 2-Minute Instant Noodles is perceived as a tasty, healthy and nutritious product by most of the consumers. In fact, the major percentage of noodles consumers prefers Maggi over any other brand. Maggi has unique positioning in terms of taste and nutrition, and also they are popular in the minds of their consumers, mostly the children.
Fu-Wang
Fu-Wang Instant Noodles has a somewhat different and also unique perception among a different set of consumers. They target the family as a whole. They are positioned as economy and good taste. People perceive Fu-Wang as economic because they offer family packets containing 10 noodles cakes at a price which is cheaper than the same quantity of any other noodles brands. Also, a lot of consumers perceive Fu-Wang to have a different taste compared to others.
Positioning of Cocola Instant Noodles through Differentiation
The previous sections show the existing positioning of Cocola Instant Noodles and its competitors Maggi and Fu-Wang. This section is based on developing a new and better positioning for the Cocola Instant Noodles. For a product to be successful in a competitive market, it needs to have a proper position in the minds of the customer. The product must occupy a position that is different from its competitors and it should be unique and simple. And for a product’s position to be unique, it needs to be different from its competitors’ products.
For the Cocola Instant Noodles, we have used Product Differentiation. The instant noodles will be different from other companies’ instant noodles in terms of taste. As was shown earlier, the existing flavors of Cocola are Chicken and Masala, and those of Maggi are Curry and Masala. So in terms of flavors, both of the companies have similar products. Here, we propose to introduce new flavors of the Cocola Instant Noodles.
These new flavors are not available in either the Maggi or the Fu-Wang Instant Noodles. Also it has been noted that the perceived difference between the tastes of the two flavors for the Maggi Instant Noodles are not that much. But this will be different for Cocola Instant Noodles. The new product will come with four flavors of taste-makers –Beef, Shrimp, Chicken and Spicy, and these flavors will add unique tastes to the noodles which will be quite different from each other.
Since the new Cocola Instant Noodles will have more flavors than the other instant noodles of the other companies, so the positioning for Cocola will be very simple and straightforward – Variety. They portray themselves in the mind of the customers as the instant noodles having a variety of tastes to choose from.
Positioning Strategies Based on Product Life Cycle (PLC)
The product life cycle shows the stages through which a product evolves from the time
when it was introduced into the market. The four stages of product life cycle are: Introduction, Growth, Maturity and Decline. The following diagram shows theses stages of PLC.
From analysis and data collection, it has been concluded that Cocola Instant Noodles has crossed the introduction stage and is now at the growth stage. The positioning strategies for the Cocola Instant Noodles based on the growth stage are given below:
The new version of Cocola Instant Noodles will have four distinct types of tastemakers. This will increase the variety of the product in terms of flavors and taste.
Previously the target market was limited to the people living in urban areas. The same targeting was also used by Maggi. Now the target market will be extended to both urban and semi-urban people, utilizing the good distribution network that Cocola has.
Although the distribution channel is pretty widespread, it has been found out there is much inefficiency in the channels which leads to a significant loss in sales. For this reason the distribution channels’ structure will be improved and the efficiency of the distribution channel will be enhanced.
Many people, both urban and semi-urban areas are not aware of the existence of Cocola Instant Noodles. So promotion campaigns will be directed to increase the awareness of the product as well as slowly building preference for the product to those people who were aware of the product.
Marketing Mix
Product
Cocola Instant Noodles can be classified as a non-durable consumer shopping good. The
noodles are consumed up in one use and it is mostly bought by the single consumers for making noodles in homes. The product is mostly B2C (business to customer), and although B2B (business to business) prospect exists, a sector that has not yet been fully utilized. This B2B sector targeting has been the focus of the niche market section. Since the product is a shopping good, quality, price, packaging, variety and brand awareness plays a very important role in the purchasing decision of the consumers.
Differentiation
For creating a unique proposition in the mind of the customer and also to create a brand and a unique positioning, a product has to be different from its competitors’. From the above classification, it can be seen that buyers make their purchasing decisions related to noodles based on price, packaging, quality, variety and brand awareness. So to have a unique positioning the Cocola Instant Noodles has to be differentiated along the above categories.
In the positioning section, it has been mentioned that for Cocola, Product Differentiation on the basis features will be used. The core product – noodles cake – is the identical for all the players. They are manufactured in the same way and they have almost same size, shape and taste. So, in the case of the core product, it is hard to differentiate. The differentiation must be done in terms of the flavors. As was mentioned earlier, all instant noodles packs come with a taste-maker which adds flavor to the core product.
This feature of the product will be used to differentiate Cocola Instant Noodles from those of Maggi and Fu-Wang.
In the existing market Maggi Instant Noodles comes with the flavors Curry and Masala and Fu-Wang Noodles with Beef and Chicken. Cocola Instant Noodles has two flavors – Chicken and Masala – imitating Maggi. We will add three more distinctly different flavors to add to the depth of the product mix. These flavors are Chicken, Spicy, Beef and Shrimp. Specifically these four flavors have been chosen because they have never been used by any of the instant noodles companies simultaneously. Also, the consumer surveys have shown the preference of the consumers for these flavors. In addition to these two flavors, the flavor Masala will renamed as Spicy so as to differentiate from Maggi. Having these two flavors will differentiate Cocola from the other companies, and will also emphasize on its positioning – which is Variety.
All general distributions will carry the product. Cocola’s distribution network is extensive enough to cover most of the points of purchase used by consumers. The three months after re-launch will be crucial to determine the total demand generated by each product variant. Then, the production can be carried out on large scale. This will optimize the costs for the company and also produce satisfied consumers. Other measures include customer satisfaction survey which will serve a dual purpose. Not only can we identify which wants we are not meeting but it will also help create more awareness of the brand among innovators and early adopters. This will help create top of the mind share of instant noodles consumers.
Physical Evidence
Physical evidence is the proof that the product is delivering what it promised. There are two parts of the instant noodles: the cake and the tastemaker. Cake: The cake is a standardized part of the product. Though CIN’s cake is the hardest among the top three in this market followed by Fu-Wang and Maggi as the softest, it does not change the perception of consumers by much. Fu-Wang is a three-minute noodles and it has thicker cake strands than Maggi’s. On the other hand, Cocola has the thickest strands. These differences have been tested using conjoint analysis. Tastemaker: As the instant noodles will be consumed, consumers will be able to taste
the difference between each flavor offered by CIN and other companies. The main challenge for Cocola will be to convince target group that each taste is different and unique. Also, making the scent appealing would be crucial. Cocola’s promise to its customer is to produce healthy, hygienic food. It will be easy to establish the hygiene factor as the cake looks very clean with a uniform texture.
Surprisingly, most people in Bangladesh are not very concerned with hygiene of the food. However, consumers take it for granted that the products are safe. Instead of focusing on what Maggi says about its product, that Maggi helps in building muscles, and claiming the same, Cocola should give concrete facts. Most consumers do not think of health when they consume noodles. Most eat it because it has carbohydrate so protein is not a very strong point to convince consumers about the nutrition of noodles.
Physical Evidence Strategies
• Meet the expectations of the consumers and give them a delight by using promotional tools from time to time
• Provide all the flavors that has been promised
• Make the claims believable and important by telling consumers about the daily
carbohydrate need that one packet of Cocola meets and focus on why carbohydrate is needed
• Portray eating noodles as a fun activity by using ATL and BTL
11 Controls
11.1 Marketing Research
11.1.1 Surveys
The consumer survey revealed the following observations related to preferences and factors of the Cocola Instant Noodles and the instant noodles industry:
• Most of the people surveyed were aware of the existence of the Cocola Instant Noodles
• But nearly all of the consumers prefer Maggi Instant Noodles. After Maggi comes the position of Cocola and finally the least preferred are the Fu-Wang. It has also been found that few of the people are not actually interested in any of these brands, they prefer foreign brands.
• People purchasing instant noodles mostly look for taste and quality, followed by preparation time, quantity of noodles in a packet and brand preferences. The next factor comes is price. Fineness of the cake and quality of packaging are the least important factor.
• About the consumption of instant noodle, four to eight packets per month is the average.
• Most of the people surveyed relate the color yellow with noodles, although the reason behind is that Maggi’s packaging is yellow and Maggi is the most well known instant noodles brand in the market.
• When asked to rank the flavors, the consumers ranked chicken as number one flavor, followed by curry, spicy and beef. The last to be ranked were the shrimp and vegetable.
• Most of the people surveyed obtained idea about the noodles brands from the television and radio advertisements. Also a few people learned about the brands from shelves of supermarkets and printed advertisements. Also a small section of people have come to know the brands through free sampling. • Instant noodles are mainly served as snacks for afternoon or evening. Also it is used as ‘tiffin’ packages for children t school and as refreshments for guests.
• Half of the people surveyed buy instant noodles from retail stores and the other half buy it from supermarkets.
11.1.2 Test Marketing
The sales volume of Cocola per year is 750+ tons. The amount to be produced for test marketing will be around 30 tons of that, since the duration of the test marketing will be conducted for two weeks. Around 30000 (10 out of 175 distributors) units of the new CIN would be manufactured. These would be fed to school children in district schools and leaflets showing the new CIN package and a
coupon to buy noodles at a discount will be provided. A conjoint survey will be carried out. In supermarkets in Uttara and Dhanmondi, shoppers will be fed the new flavor and given the leaflet without the coupon. This will provide the needed feedback on how much of each variant to manufacture.
11.2 Action Programs
The product will be re-launched with a new taste maker. The positioning message will be made clearer through push strategies initially and aim at capturing the soul share. By providing quality hygienic noodles, CIN will try to gain 25% of the market share up from the current market share of 18% in the next one year. The entire project is flexible and thus test marketing has been prepared which initial survey of people show that they will go back to Cocola if the taste was good.
1. Taste maker modified re-buy from Malaysian suppliers so that the ingredients have a better taste. (They had tried with Taiwanese taste maker before.)
2. Packaging from yellow and red to the popular Cocola Stick Noodles packet design though size will be same as before.
3. Clearing inventory of old CIN packages.
4. Training to agents to have better B2B relationships and retailer relationship.
5. Carry out test marketing.
6. Special trade terms modified to reduce commission of agents as we go for a pull strategy.
