1. Changes In Product Quality And
How Consumers Are Re-acting
Towards It
Submitted to :KamilYousuf
Submitted by: Roydon D’mello
Misbah Karim
Rukhama Mujtuba
Mirabel D’souza
Saba Shiekh
Maliha Naeem
Date: 14- Aug-2011’
2. Pakistan Economic Survey
2010‐11
• The inflation rate as measured by the changes in
Consumer Price Index (CPI) stood at 14.1 percent
during (July-April) of the current fiscal year 2010-11, as
against 11.5 percent in the comparable period of last
year.
• The increase in inflation rate during the current year
2010-11 is attributable to the increase in food price
inflation which has been mainly due to increase in
prices of sugar, milk, poultry, meat, fresh vegetables
and fruits owing to shortfall in production of these
items and significant increase in world food stuff prices
3.
4. Consumer behavior affected by
recession
• Many consumers who cut back on new clothes, out-
of-home entertainment and take-away meals and
switched to cheaper grocery to make ends meet plan
to stick to these new habits even when economic
conditions improve,
• According to the Nielsen survey, nearly one in three
global consumers will continue to economize on gas
and electricity. In Pakistan consumers are forced to do
so...
• Savings : Consumers do not appear to have fully
“come to grips” with what it would take to sustain a
depressed economy
5. • Spending Time at Home, Reductions in eating
out have resulted in sharp declines in
restaurants’ performance—additional
declines are imminent.
• Delaying Substantial purchases on consumer
durables.
• Subconsciously reduce charitable spending
6. How to companies react to the
recession
• Companies can either cut on costs. This can be
done by lowering their quality, cutting down
their advertisement budget, reducing their staff.
e-g Mr. Burger
• Prices remain intact for their normal products or
services but they introduce new products for the
lower classes . e-g Olpers milk and airlines.
• Increase prices and still the consumers pay e-g
good restaurants in Karachi
7. Engro’s Olper’s
• One litre Olper’s TetraPack = Rs 76, an
increase of six rupees
• 1.5 litre package, price went from Rs 98 to Rs
108. Effective May 2011
• Government allowed companies selling
packaged milk increase of 10% in price
because of packaging and transportation
costs. Increase in price was more.
8. Engro’s Dairy Omung
• Dairy Omung = Rs 65/ litre
• Fresh milk available for Rs 66, government
set price of Rs 60
• Dairy Omung, low cost UHT milk priced at
Rs11/liter lower than Olper’s
• Highly competitive with fresh milk
• Margins are low, Engro targeting the huge
loose milk market mainly SEC B
9. Airline Industry
• Lack of employment, people saved as opposed
to spending. Thus less air travel
• Airlines merging. Air France-KLM
merger, Lufthansa/Swiss merger
• Airlines providing cheap tickets with different
holiday packages
• Southwest Airlines announced it will institute
festival seating on all flights beginning in
2010. Southwest is committed to providing
a festival like in-flight
10. Pakistan Telecommunication Authority (PTA)
• Cell phones have become a necessity
• Cellular phone subscribers witnessed more
than 100 % growth in FY 2010-11
• Addition of 9.7 million new connections despite unending
competition and severe regulatory measures in the sector
• Multiple subscription trend, call packages, SMS bundles and cheap
SIMs have supported the growth of cellular phone connections in
Pakistan
• Cell phone users have increased in rural and urban areas with the
increasing penetration of services, customer care
facilitation, availability of SIM, scratch cards and easy-load
11. Nokia
• Nokia has dominated the cell phone market in Pakistan over the
years
• Nokia vendors have lost 2% points of
share this year
• Chinese manufactured cell phones have
flooded Pakistani markets
• Nokia does not have the first mover
advantage when it comes to Dual SIM phones
• Other challenges for the year include a shortage of components
because of the earthquake in Japan
12. Nokia Pakistan
• Threatened by Apple’s iPhone, HTC, Samsung and Motorola
• Invested billions of dollars in building up mobile internet
services, effectively admitted defeat in its services strategy
• N8 smart phones were introduced in an effort to recover the lost
market share, they didn’t quite succeed at doing so
13. Complaints of Nokia Users
• Gets heated while charging
• Turns on and off by itself
• The screen freezes
• Small keys often result in typing errors
• Difficult to hear conversations clearly even
at maximum volume
• Poor battery life for those who speak frequently
• The small speaker holes frequently get covered with dust due to
their small size, thus phone calls can not be heard.
14. Nokia - Internationally
• Nokia has dominated the mobile phone business for almost two decades
• The introduction of the iPhone in 2007, followed by the arrival of
Google's Android operating system in 2008, has eroded its market share
and profits substantially
• New numbers from Gartner reveal that Nokia’s current market share is
the lowest its been since 1997, nearly 14 years ago
• While Nokia’s share was plummeting, worldwide mobile devices sales
jumped 19% year-over-year. Google’s Android takes a 36% slice of the pie
and Apple doubled the number of iPhones it sold last year
• In the context of the broader Smartphone marketplace, Nokia now
amounts to only a 31% share, which is a major dip relative to its 40%
slice in Q4 2009 and 38% in Q3 2010.
15. NOKIA and MICROSOFT form partnership
• Nokia has joined forces with Microsoft in an attempt to regain ground lost to the
iPhone and Android-based devices
• It will result in Nokia using the Windows phone
operating system for its smartphones, and so,
Nokia's existing operating systems (Symbian and
Meego)will eventually have to be sidelined
•Symbian, which runs on most of the company's
current devices will become a franchise platform, although the company expects
to sell approximately 150 million more Symbian devices in future
• The MeeGo platform was expected to form the core of Nokia's future
Smartphone strategy and Nokia still plans to ship one Meego device by the end of
2011
• Microsoft's Bing will power Nokia's search services, while Nokia Maps would be a
core part of Microsoft's mapping
16. NOKIA & Competition
• Google's Android operating system and Apple's iPhone are Nokia’s biggest
competitors
•The first iPhone was shipped in 2007 and ushered in an
era of touch screen technology - Nokia still didn’t have a
product that was close to the experience
•Android came in 2008 and took Nokia’s leadership
position in Smartphone volumes
• While the phone market has recovered since a slump in 2009, Nokia
has been slow to react to the growing Smartphone competition
•Nokia has faced a new threat of cheap phones in Asia from companies
unheard of like Micromax, Carbon, Lava, etc.
• The demand for Symbian and windows OS mobile phones have fallen down
heavily. Google's Android has got a good acceptability in the public and Nokia has
not been able to implement Android in their smart-phones
17. NOKIA’S Quality Decline
• As Nokia’s quality goes down, it also slows down the production
•Nokia E90’s faced defective microphone problems of background noise
during phone calls, it raised customer complaints and scratches on the phone
screen caused by some keyboard keys touching the screen were also reported
• Customers feel that while trying to upgrade their tools and features, Nokia
seems to be decreasing the quality of hardware and accessories
22. McDonalds
• McDonalds has been
persistently providing
the quality it started off
with.
• It is known for its high
quality and hygiene
standards.
23. INTRODUCTION
• CBL is engaged in the manufacturing and
marketing of the brand LU
• It includes such favorites as TUC, Candi, Prince
and Tiger and now Bakeri Cookies.
25. Market Share
• In the last 27 years it has Market Share
gained 30% market share
with competition from
EBM which now enjoys
40% market share after 40%
56 years. 30%
20%
10%
• Prime emphasis on
0%
quality products coupled
EBM CBL
with an excellent
distribution network.
26. Competition
• Company Market Share
• Continental Biscuits Limited. 30.3%
• English Biscuits Manufacturing Co. 43.0%
• Ismail Industries, Bisconni. 10.5%
• Asian Foods. 6.1%
27. LU becomes a Superbrand!
• Continental Biscuits’ ads end
with the statement,
• ‘ A QUALITY PRODUCT OF
CONTINENTAL BISCUITS’
• CBL (LU) has been awarded the
Superbrands Award 2011 for its
quality
28.
29. STRATEGY
• CBL's strategy is to be a leader in the biscuit
business driving long-term sustainability and
delivering sustainable performance for the
company, environment and the community.
30. Differentiation
• CBL has successfully applied “differentiation”
to its market positioning strategies by
capitalizing on its existing brands, maintaining
& improving their quality, advanced
technology, individual brand advertising
emphasizing together the complete range
of biscuits by LU thus building the unique
family name LU.
32. SALES
• Sales Operations are Systemized
i.e., Invoicing, Dispatches , Booking
, Delivery, Sales Reporting
• Strong Competitor Tracking
• Sales team yet has to be given some valuable
Training & Coaching Sessions to be fully
equipped to face future challenges of
Modernization
33. MARKETING
• Marketing Department in the year 2009 and 2010
has floated some brilliant ideas to be roll out and
company has turned around the sales with
consecutive growths of 52% volume growth
34. COMPETITORS
• The major competitors of CBL are Bisconni
and EBM
• English Biscuits Manufacturers which has
about 53 brands under EB and about 44
brands under Coronet Foods Private Ltd. (CFL)
35. Characteristics Affecting Consumer
Behavior in the Biscuit Market
• Different characteristics of the consumers affect their
buying patterns and the way they perceive various
marketing offers. It is important for businesses to
determine what types of characteristics affect the
specific consumers of their products
Social class of the consumer
Family
Age
Lifestyles
36. • The market has been segmented primarily
into adults and kids with further
segmentations in terms of taste
profiles/Lifestyles and hence:
Soft & Sweet Plain Bakeri, Gala
Cream Filling Prince
Salty Snacks TUC
Indulgent/Sweet Candi
Plain Glucose Tiger
Ingredient Based Zeera Plus
Healthy Wheatables
37. Consumer Buying Roles
• Consumers differ in buying behaviors in terms of
involvement in the purchase of a product and
perceiving brand differences.
• In case of biscuits, the type of consumer buying
behavior involved would be Variety-seeking buying
behavior , low consumer involvement but significant
perceived brand differences.
• consumers are frequently engaged in brand
switching and they would generally go for a new
brand if it is initially successful and renowned.
