Marketing Strategy c.s sasko by sheena indhul

Sasko Milling
INTEGRATED MARKETING PLAN
& STRATEGY 2 00 2- 2 0 0 6

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Sheena.Indhul IMM-GSM: Marketing Strategy M4 Case Study

EXECUTIVE SUMMARY

Pioneer Foods dates back to 1920. De Boeren Ko-Operatieve Molen Maatschappij
Beperkt"-BOKOMO, was a co-operative milling business in the 1920’s, which was
associated with the development of Die Suid-Afrikaanse Ko-operatiewe
Graanmaatskappy Beperk – SASKO.

Sasko is in a highly competitive industry. The company’s main focuses are grains,
maize and flour. Since 1997 Sasko Baking and Milling has prided itself as being a
strong contender in the primary market for wheat products and in 1998 were the
leaders in the special maize meal category.

Vertical Growth has proven favourable to some extent; in such a competing industry
they have experienced both losses and success. The most important requirement in
this industry is to respond to demands. Sasko has taken a leap of faith, in launching
a new super maize meal. White Star was launched in 1999 as a top-end super maize
meal, competing with the premium maize meal brands in South Africa. Positioned as
the first fortified maize meal (with added Vitamin A), the brand quickly took to the sky
and showed an incredible growth rate.

In 2002 White Star, will become the most successful brand within its category. White
star has become a way of life for the people of South Africa. To grow market share in
a competitive industry white star needs to extend their brand portfolio. Differentiating
it from the many competitors that exist in the market. New markets have opened up,
such as the Black Diamonds, who are now fast becoming active participants in the
economic sector of South Africa. Added to this is the threat of the consistent flux of
the economy and government legislation regarding biodiesel. White star must grow
its market share by extending its portfolio into new segments, offering the segments
added value, while ensuring that the product remains of a high quality

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T A B L E O F C O N T E N T

Executive Summary 2

Part I: Situational Analysis
Macro environment
Political/ Legal situation 5
Economic situation 5
Socio-Cultural /Demographic situation 6
Technological situation 7
Enviroment situation 7
International Situation 7
Market Enviroment
Market Industry 8
Primary Industry 8
Secondary Industry 8
Tertiary Industry 9
Competitors 9
Customers 10
Suppliers 10
Intermediaries 10
Middleman/Retailer 10
Micro-Enviroment

Target Market 11
Positioning 11
Product/s 11
Price 12
Place 12
Promotion 12

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Part 2: Swot Analysis 15

Part 3: Key Issues 16

Part 4: Assumptions 16

Part 5: Marketing Objectives 16

Part 6: Marketing Strategy
Target Market 17
Positioning 18
Product Strategy 19
Price Strategy 21
Place Strategy 21
Promotion Strategy 22

Part 7: Action Plan 24

Part 8: Budget 25

Part 9: Controls 26

Part 10: Annexure A Tables 27
Table 1.1: White and yellow maize: Geographical distribution of production 28
Table 1.2: Total maize area harvested, production, consumption and prices 28
Table 1.3: Market share of white maize millers 28
Table 1.4: Extraction rate of various maize meal types 29
Table 1.5 Price Structure From farm gate to retailer 29
Table 1.6: Basic White Star Marcom Strategy 30

Part 11: Annexure B Tables
Figure 1.1: Gross value for the top ten agricultural products for 2002/03 32
Figure 1.2: White maize the super maize meal retail price 32
Figure 1.3: Positioning Map Comparing Consumer Preference 33
Figure 1.4 The Value Chain 34
Figure 1.5 Porters 5 forces 35

Part 12: Annexure C
Campaign concept-Illustration 37

Part 12: References 39

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MACRO ENVIROMENT
Political/Legal Situation
In 1997 the Maize Industry deregulated in South Africa, report by Food Price Monitoring
Committee, (2003) and Traub and Jayne, (2004) showed that the maize milling/retail
margins in the formal market have been rising in recent years after maize market
deregulation. Deregulation in the agricultural sector caused shifts in the geographic patterns
of white and yellow maize production. (Table 1.1: White and yellow maize: Geographical distribution of
production) Source: Crop Estimates Committee, 2003

Legislation was introduced in 1979 to the effect that all maize meal be Vitamin B enriched.
Further studies by the Department of health in 1995/1996 illustrated that one in three
children suffer from a lack of Vitamin A. It is now statutory to add both Vitamins.

Economic Situation
Before 1995, South Africa had a controlled marketing system which restricted informal and
unlicensed traders and millers. Since the implementation of the deregulation policy the price
of maize increased gradually up to 1999/2000.

Since 1997, product prices have been determined under a free market condition and are
formally traded on SAFEX. One of the main flaws of liberation is that consumers will
experience price peaks. The flux in R/ton from 1997 to 2000 was a difference of R70.00/ton
from the real white maize producers. (Abstract of Agricultural Statistics, SAFEX) Taking into account the
inflation of maize was also due to other producer variables. (Table 1.2: Total maize area harvested,
production, consumption and prices.)

South African maize milling industry will remain characterised by few role players and ever
increasing margins. This would impact significantly on low-income consumers who spend up
to 20% of their monthly income on maize meal (Watkinson and Makgetla, 2002).

In 2002 the cost of maize crops and raw materials increased by at least 100%. Maize was
the largest contributor to the GDP. Food prices rapidly increased, for the first time in history
1kg of maize was more expensive than the same quantity of flour. This sharp increase in
the producer prices was mainly caused by a strong depreciation in the exchange rate,
caused by erroneous market signals of possible maize crop failure. White maize producer
prices increased from 2001, R671.50/ton to 2002 R1158.20/ton. (Abstract of Agricultural Statistics,
SAFEX) This is evident in Table 1.2.

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South Africa’s lower lifestyle standard measurement (LSM) was affected. The total
percentage of South Africans that always have enough to consume was recorded at 58%
(Source: Future Fact 2000) of which majority were the higher income groups LSM 6-8.

Socio-Cultural/Demographic Situation
South Africa is rich in its cross-cultural assimilations that capture some of the positive and
exciting features of the social, cultural, and ethnic diversity.

The minimal dietary requirement for the black South African is maize meal. The diverse
maize meal market is attributable to the changing socio-cultural influences that differ
regionally in addition to the economic situation.

Super maize consumer values are changing and demand high quality maize that is high in
energy, cooks faster, softer and enriched with vitamins when compared to the unsifted
maize. Super maize meal is preferred by urban and peri-urban females aged between 18-35,
LSM 3,4,5 who make their own purchase decisions, keeping in mind the welfare of their
family. Social and financial pressure impacts when commodity prices like maize meal
increases, affecting the ability to sustain status quo.

The changing roles of families and working women within the middle class Black South
African is having a positive impact on their society since. Busy working class women are still
pressured to produce a meal after work, literally poverty stricken of time. Super maize meal
attributes complete these variables by cooking faster quicker and still serves the same taste
and enriched vitamins and energy for a family.

The changes in socio-cultural trends in the South African market have been influenced by
many variables. Urbanization started in 1940’s and increased rapidly into the early 1970’s.
Post-apartheid reform increased the countries middle class by 30% between 2001 and 2004.

The transition phase in healthy diets started gradually as it impacted on the black South
African core values and beliefs. In the Black African culture one is expected to be larger than
their standard body frame. This is a cultural value that was passed down from generation
and reinforced by others who adhered to the core beliefs and value system. The
understanding was should a black African female appear slim she was considered a shame
to the family as she had been perceived to have the white man’s disease that is HIV/AIDS.
(Sociocultural Influences and Eating Disorders Around the Globe By Mary K. Stein, Managing Editor: Extract: Dr. Christopher
P. Szabo)

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The impact of AIDS today on the demographic population will have an impact on the
consumption of maize meal, in South Africa. Source: National Agricultural Marketing Council (Namc)

Maslow’s Hierarchy of needs illustrates the shifts that are in action from basic needs to
psychological needs this is the influence of the western world and as a result we get the
evolving Black Diamonds. Eating habits have been curbed and diets, changing. The shift in
staple grain crops to a more diverse diet of eggs and meat indicated the influential impact of
the western culture health trends on generation y in 2005. The need for self-fulfilment will
become a priority for generation M. The growing social trend leaped from material to non-
material accomplishments. Having control over their lives and making decisions. Self-
conscious, new social interaction with other cultures allows for secondary thoughts this new
middle class society will shape the tastes and preferences. Free thinking, western culture
and women empowerment are some factors that shape our country.

Technological
The industry shifted from labour intensive to capital intensive, highly mechanised and
automated production units resulting in a more refined, softer super white maize.
Newly imported technology has made it possible to extract more super maize meal from a
single kernel without compromising on quality and reducing black spec.
Other forms of scientific technology that have captured many is the genetic mutation of
maize. (Table 1.3: Market share of white maize millers) Source: Competition Commission, unpublished information

Enviroment
Negative impacts on maize crop failure in regions can cause major effects across the board
as indicated in 2002/2003 flawed market signals of a possible crop failure.
The climatic advantage of maize meal is its ability to adapt in any climate. In recent years the
study of maize has led to assist in the bio diversity of emerging trends such as biodiesel. The
female maize flower is used as an alternative medicine in herbal supplements. The chemical
composition of maize starch allows us to make plastic, fabrics, adhesives and many other
chemical based products. Direct plant protection precautions for maize are, essentially,
aimed at weed control.

International
As maize is an internationally traded commodity, it is also subjected to the international
market conditions. The demand and supply conditions of maize in the international market
influence domestic prices directly.

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Market Industry
Maize is the most important grain crop in South Africa, being both the major feed
grain and the staple food for the majority of the South African population. In 2002/03 maize
was responsible for the largest contribution of 13.78% to the total gross value of the
agricultural production with a gross value of R9.5 billion. (Figure 1.1: Gross value for the top ten
agricultural products for 2002/03)

The South African maize industry is also the largest maize industry in Africa and ranked in
the top 10 maize producers in the world. The major production areas in 2002 were situated
in the Free State, North- West and Mpumalanga Provinces.
The average local consumption requirements are estimated at 7.4 million tonnes. This can
be split up into 4.2 million tonnes of white maize and 3.2 million tonnes of yellow maize.
White maize is the staple food of a large section of the African population in Africa and this
account for 94% of white maize meal consumption.

In 2000/2002 more than 40% of all the maize meal sold in the SA market is super maize
meal and this percentage is increasing. Special maize meal sales make up 30% of total
sales.

Primary Industry
The geographical distribution of white maize increased in the Northern Cape. In this area
mainly irrigation farmers have opted to plant white maize as a response to the high prices.
There is a variety of maize meal types within the maize meal category. The maize meal
market varies distinctly from one region to the next. To succeed in the staple foods category
it is necessary to hold a 20% share of that market. Source: Sasko White Star, Case Study.

According to the Grain Silo Industry (2002), the total grain silo storage capacity in South
Africa is estimated at 17.5 million tonnes, 85% of which is owned by 22 silo owners. Most of
this storage capacity is also located in the provinces in the northern parts of the country.

Secondary Industry
According to the National Association of Maize Millers, the top 4 companies in
this group of 22 millers produce the majority (73%) of the market share of white maize meal.
.(Table 1.3: Market share of white maize millers) Source: Competition Commission, unpublished information:
Analysis of selected food value chains. The secondary industry converts maize to either maize-meal
for human consumption, for animal feed or for maize starch.

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Although an extraction rate of 62.5% is reported for super maize meal, some industry
specialists regard this figure as “conservative”. The best-selling super maize meal brands,
IWISA and ACE, only have a 55% extraction rate. (Table 1.4: Extraction rate of various maize meal types)
Source: Chamber of milling

The effect of the expensive maize bought during the first part of 2002 impacted on the
industry towards the middle of 2002, as the spread between retailer and miller became
negative. Millers could not increase retail prices any further they had high costs for raw
material. This meant large losses in the maize milling industry. Volume of maize milled
declined rapidly as consumers responded negatively to the high maize meal prices. Figure 1.2:
The white maize spot price, the super maize meal retail price and the miller to-retail margin. Source: SAFEX, AC Nielsen,

Tertiary Sector
The tertiary sector consists of traders, retailers and transporters. Traders move the produce
to the domestic or export market. There are three types of traders in the maize industry,
hedgers, arbitrageurs and speculators The retail sector provides infrastructure and services
for the distribution of maize products from the miller to the final consumer. Transport helps to
move the maize from the farmers to the silo owner, from the silo owner to the miller and from
the intermediaries to the final consumers.

Competitor
The maize meal market is increasingly competitive. The best-selling super maize meal
products are Iwisa and Ace. Premier foods and tiger milling were the leaders in the white
maize meal market with an extraction rate of 55%-62,5%, before Sasko entered the
competitive super maize market.

The competitive advantage Sasko had was the additional Vitamin A enriched white maize
meal. Sasko customer centric approach had also led them to understand the importance of
the black specs per kilogram and vitamin enriched maize meal. The white star slogan “the
clever choice” played a significant role against their competitors. White Star is entering a
commodity market, making the job of differentiating the white star from its competitor brands
difficult.

In 1998 Pioneer (Sasko) were leaders in the special maize meal category with 4 of their
brands holding a substantial portion of the market share. In 1997 Pioneers (Sasko) super
maize meal category had only 2% of the market share. To succeed in the super maize meal
category Sasko needed to increase their market share by 20% so Sasko launched White

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star in 1999. In 2000, Sasko held more than a 30% total share of the maize meal category
and within 20months White Star captured 10% of the super maize meal market share. White
stars regional market share varied between 5% and 70% depending on the region.

Consumer/Customer
Maize meal is a staple diet for the price sensitive consumer. Research confirmed that “mama
knows her pap”, consumers have a consistent and uncompromising idea of what they expect
from a quality maize meal. White star super maize meal needs to meet these standards of
the quality conscious and brand loyal consumer. The low level of disposable income are
more subjected to change should these attributes not be met.

Suppliers
Pioneer (Sasko) purchased Tongaat mills and Amaize Co. to assist with the increase in
production. Pioneer mills supplied Sasko with super maize meal. The production process is
highly fragmented as one brand is produced at a number of different plants in different
regions. Sasko relies heavily on other local mills production capacity and the ability to ensure
consistent standard of quality.

Intermediaries
Sales reps in each region compiled a list of 10 -20 key customers to stock the White Star
brand. These retailers were their main focus, rationing the brand to limited stores will yield
better results and consumer demand will pull products into the remaining outlets.

Middleman/Retailer
Maize meal is an FMCG product, using the traditional channels. The distribution costs are
high. From wholesaler to retailers such as Pick n Pay.

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MICRO-ENVIROMENT
Target Market
Primary target market
White star target markets are urban or peri-urban females between the ages of 18 – 35, who
fall under LSM 2, 3, 4.

POSITIONING
White star competitors Iwisa and Ace held a strong position in the super maize meal market.

Brand Positioning
In order to elevate the white star brand they needed to have a clear unique proposition and
style of communicating through the clutter. White star is positioned as “the clever choice”.
This is perceived in the mind of the consumer as “they are making the right choice by
purchasing white star super maize meal”, it matched consumer’s perception of what they
perceive to be high quality super maize meal. The slogan is indirectly used to draw attention
to the fact that White star was the only super maize meal with vitamin a. This was white stars
unique brand proposition. At the time white star did not have an icon so the objective was to
present white star brand personality.

White star synergetic campaign rouse to fame, the brand personality and unique positioning
proposition was pivotal to white stars launch strategy in 1999 reflecting its competitive
advantage and motivating the consumer.

PRODUCT
White star is a high quality super maize meal. White in colour with a fine ground texture.
White star super maize meal is enriched with added vitamins A and B. Super maize meal
cooks faster taste better and is softer with minimal black specs. White star is available in
1x10g, 1x12, 5kg package. White star is limited in its product range, the brand portfolio only
consists of White Star Super Maize Meal, as it was easier to support one brand.

Research approach contributed towards the success of the white star brand. The brand
name, pack design and advertising campaign were a result of the respondents as they were
consumers and could identify with the product. The product brand name: white star held
positive connotations, and the “white” added a quality approval. The “star” resembled
performance and excellence, one that may excel or go far.

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Traditional maize meal packaging with a modern design twist was incorporated. Simple
design elements, that one can communicate with. The graphics illustrated a striking red,
shooting star on a white background.

PRICE
White Star super maize meal had to maintain a status quo and was priced marginally below
the leading brand. White Star super maize meal wanted to be perceived as a premium
priced product which targets LSM 2,3,4. super maize meal consumers. The lower – middle
class disposable income groups.

The more refined the maize meal the higher the price. Maize meal is sub categorised, super
maize meal is the premium product. Maize meal is a price sensitive market and escalating
costs would be passed onto consumers. The substitutes available are affordable, should a
consumer develop an attachment to White Star out of tradition then sensitivity to price
changes, would result in more inelastic demand. Price is also a factor when looking at the
supply chain. In 2002 the rapid increase in product was a result of erroneous market
information regarding bad crops. However many other factors played equitable role such as
bread price fixing.

PLACE
White Star super maize meal follows supply value chain. From farmer to silos to miller to
wholesaler to retailer. The manufacturing process of super maize meal is highly fragmented.
White Star Super Maize Meal can be found in large retailers Pick n Pay, Checkers-Hyper,
Spar and Metro store to name a few. Inland region, there are spaza shops and kiosks which
many are recognized as informal retailer.

PROMOTION
The product life cycle of white star launch strategy consisted of 3 phases. The campaign
focused on the primary target market, women. The message transmitted to women that by
purchasing White star she was making a “clever choice” for the real stars in her life, her
family. Sasko brand awareness progressed.

Growing Awareness (Introductory) phase:
Sasko developed an intimate customer centric relationship with their
consumers. “Know thy consumer” Sasko conveyed their dedication towards
reliability and quality of maize meal to their consumer.

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Advertising
Primary Medium used to launch the first part of the campaign:
Radio, as it had the highest reach and frequency for White Star target market. Kwaito
music started to win a growing audience. White star was shooting for the stars with a
commercial using a Kwaito jingle.
Television
The Kwaito jingle commercial used on radio was also developed for television
Magazine.
Print, educated prospective consumers in recognising the packaging of the White
Star brand, the disadvantage was the language barrier and illiteracy rate that
impaired White Stars superior offering. The use of primary media radio and magazine
offered optimal exposure.

Inducing Trial (Growth phase):
White star brand was priced marginally below the leading brand in the super maize
category.
Sales Promotion
They launched White Star with a special offer, “cow and calf promotion” For limited
period of 3 months all consumers were given a free 1kg pack with every 12,5kg bag
of white star purchased.
Sampling
The above the line campaign included In-store promotional activity, capitalising on
community events through product demonstrations and sampling within the target
market.
Out Door Media (OOH) Off premise
A White Star trailer shaped like a shuttle broadcasted voice-over messages that
supported the extensive advertising campaign as it travelled through high traffic
areas.

Building Loyalty (maturity phase):
White star advertising campaigns continued. In-store promotional activities were
consistent. White star newly gained market share held and a new brand found its
way onto the shelves of many South African homes.

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Personal Selling
Sasko had a strong and consistent internal sales force that supported the brand and
followed through.
Public Relations
White star received positive PR exposure at the time of launch: “The first super
maize meal with vitamin a.”

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PART 2: SWOT ANALYSIS

SWOT ANALYSIS

STENGTH WEAKNESS

Sasko Customer Centric approach indicates good reputation
amongst Target market Distribution and sales force is weak

Share of market gained from 2% to 10% of super maize meal
Ability to sustain market share nationally is poor. 5% - 7%
and held a overall 30% share of market in the maize meal
imbalance in market share From region to region
category
Technology that was invested into white star exceeds the
product quality. Narrow product range

Committed Employee (Brand file) High cost of maize production

Research and Development as well as an internal strategic
Rely heavily on media communications with no actual
department
research on the changing socio-trends.
Even though White star meets the needs of the Target
White star quality of super maize meal market it is still uncertain if they could meet the same needs
during the tough times.
Competitive advantage of enriching super maize meal with
Vitamin A High cost of maize production

Priced marginally below the leading brand Cultural stigma attached to maize meal in general

Target Market awareness of white star was initiated by a
strong launch campaign. Lack of creativity in communications

Target Market attitude towards white star indicated brand
loyalty

OPPORTUNITY THREAT

Health Trends Ace and Iwisa- brand loyalty is strong

Medium term investment in biodiesel-bio ethanol. Competitors hold majority of market share

Brand Extension from 2002 into cereal or flavoured maize Cost escalation impacts the target market- low disposable
or healthier “light” maize. income

Increase Target Market Generic super maize meal substitutes

Substitute maize meal category of cheaper alternative Bread,
Export to surrounding SADC countries.
rice, oats

Demographic: black diamond’s emerging genertation into
Increased regulations
.urbanization

Advancement in Genetics Global Recession causing inflation

Bad crop harvest for the season will impact the supply of
Using technology to expand database
super maize meal

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PART 3: KEY ISSUES
 Growth in existing product market- inc. market share of super maize meal
 Extend category & geo-expansion segmentation-Focus on Black diamond
 Product Development- Increase product offering by extending product line.
 Brand Extension- New products
 Market development- expand target market segments
 Sales force needs to increase their customer base- Business 2 Business
 Market trends are indicating a medium term demand for maize

PART 4: ASSUMPTIONS
White star super maize meal has maintained their market share in a competitive growing
market. The socio-cultural trends allow space for a larger market share. It is assumed that
the country’s economy is in a constant state of flux from the end of 2002 to the end of 2006.
At some point the exchange rate will cause a decline in R/ton. Possible losses in the future
2008 onwards, monitoring global economy will decide on the future sales of Pioneers assets.
Research and development need to be an ongoing process. A prediction of vertical
integration in the long term will commence.

PART 5: MARKETING OBJECTIVES
 Increase market share in the target market from 20% (2002) to 35% by end of 2005.
 Achieve 90% awareness on new White Star product range by the end of 2005.
 Increase brand awareness amongst new target markets to 90% by end of 2005.
 Increase product sales by 30% by the end of 2006
 Increase the distribution phase of white star product range to outlets to achieve a
penetration of 85% by the end of 2006.

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PART 6: MARKETING STRATEGY

Target Market
There are two target markets which exist for White Star. There is the B2C – Business to
Customer and B2B – Business to Business. These target markets are the foundation for
white stars prolonged existence.

Business To Consumer
White star target market can be further divided up into, rural, urban, peri-urban,
children and black diamonds.
Geographic
White star is distributed nationally to all provinces across South Africa; however its
primary target markets are in Free State, North West province and Mpumalanga.
White star can be found in the urban areas of South Africa.

Demographics
Age:
Majority of the consumers are aged between 7 to 55 years.
Income:
White star Super maize meal targets consumers in LSM 1 to LSM 7: low.
Gender:
Majority of the shopping are done by females.
Ethnic:
South Africa is multi-ethnic. Majority of the market are black/Africa
Family Lifecycle
Young single/married, with/without children, widowed/separated.
Social Class
The emerging affluent, trendsetting, Black Diamonds fall into the middle and upper
class. Maize meal is apart of their culture and have the deepest respect to adhere to
the elders.
Education
In the past, Sasko had illiteracy barrier. This strategy must certainly not continue, to
overlook these individuals.

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Psychographics:
The psychographics of the target market can be described as “moving with the
times”. Highly driven and ambitious. Energy to succeed personally and professionaly.
Determined to show the world they on top of their games in all they do, from career
to family, home and social life. Source: Yankelovich MindBase segmentation

Behaviour Characteristics
Brand loyalty and image conscious customers.

Business to Business
The sales representative or key account manager markets the white star product range to
retailers and wholesalers. This also includes businesses and institutes.
Examples of which we must target are:
1. Government Hospitals eg: King Edward
2. Prisons
3. Restaurants eg: Africa 2 Asia
4. Game lodge & Reserves eg: For foreigners and locals
5. Airlines eg: South African Airlines flies in and around the African continent.

POSITIONING
Positioning Strategy
The objective is to maintain the current brand positioning at the same time enhancing it with
a new tag line that will appeal to both current and new target markets. White star is “the
clever choice” has proved, worthy. With the changes in social trends and new emerging
markets it is imperative that white star appeals to all segments. Tapping into the mind of the
consumer to discover their aspirations and lifestyle in the urban world White star is still
positioned as ‘the cleaver choice”, with healthier benefits quick and easy meal replacements.
White star is indicating progression with the “times” of the new emerging markets.
Figure 1.3: Positioning Map Comparing Consumer Preferences

Positioning statement
To be the no 1 health maize meal brand.
White star must be the “the clever choice” when it comes to maize meal.

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PRODUCT
The white star brand now contains a variety of products to suit the changing markets. The
product ranges all contain the highest quality super maize meal. Adapting to market changes
white star has found healthier, tastier and versatile ways to make the consumer happy.
White star brands, super maize meal range, instant porridge and vita shakes.

Product Range

White star- super maize meal
White Star super maize meal products are the clever healthier delicious energy packed
super maize meal consumers can’t get enough of. It is a convenience product that can be
eaten with or without a little tomato relish fish, meat or vegetable, a simple, easy & quick
meal. White star maize meal combines an instant energy hit light, fluffy and smooth, texture
with a moreish melt in the mouth buttery taste delivering a satisfying, reassuringly familiar
white star experience. White star maize meal is rooted gratification leaving you with a feeling
of a full tummy. It is viewed as a tasty, versatile and vitamin enriched meal.
White star super maize meal is really “The Clever Choice”

The range is easily recognisable with its distinctive white red and green packaging and the
new unique heavy duty poly packaging. White star super maize meal is healthy with your
favourite side-order, and is available in a variety of pack formats.

White Star Maize Meal
 White Star super maize meal
 White Star super maize meal Braai pap (Course textured)
 White Star Maize rice

White star Instant porridge
White star instant porridge provides your children with a smart, start to the day. Deliciously
flavored, super fine maize with, important 10 vitamins and 2 minerals. Packed with energy.
Easy, convenient, clean, no mess and fits in the handbag and lunch boxes– making them
perfect to carry around to school or family road trips. White instant porridge hot or cold milk
or water to enjoy a great tasting filling meal anywhere any time. Instant porridge mix can also
be drunk by adding 100ml extra liquid to the product.

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The range is easily recognisable with its distinctive easy to handle individual (10) sachets in
a matte gloss box packaging. White star is really “The Clever Choice”

Instant Porridge
 White Star Instant Porridge : Banana
 White Star Instant Porridge : Vanilla
 White Star Instant Porridge : Mixed berry
 White Star Instant Porridge : Papaya

White star vita shake
Perfect for busy men and women, particularly on the move. All in one vita shake is a super
fine maize base. Enriched with vitamin and minerals that are easily absorbed by the body. L-
taurine, guarana, caffeine, Panax ginseng and Ginkgo biloba clinically proven to enhance
mental performance and boost energy. Provides a mind-body boost anytime, anywhere.
Increase energy and improve mental clarity for better performance throughout the day. White
star vita shake comes in 3 delicious fruit flavours. Produced by White star a brand you can
trust to deliver on quality and nutritional value. A complete meal solution for a 48hour day.
Instant – easy to prepare, just add milk or water.

The range is easily recognisable with its distinctive unique pocket size (10) sachets in a
matte box packaging. White star is really “The Clever Choice”

All in one breakfast
 White star vita shake : Papaya
 White star vita shake : Banana
 White star vita shake : Chocolate

The Value Chain
Figure1.4 the value chain

Porters 5 Forces
Figure 1.5 porters forces

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PRICE
The price is dependent of supply and demand, but the product is positioned as a premium
priced product with a marginal gap between the competitors. Research has shown in some
regions there is no price sensitivity it’s all about status quo. The expense of the premium
priced product is a result on the increase in extraction rates from 55% to 62,5% and recently
91%. The prices of the four main nodes in the food chain are the average producer price, the
mill door price, the list price, and the consumer price. Table1.5 Price Structure From farm gate to retailer

PLACE
The objective here is to grow market share and expose the new range to new markets. This
can be achieved by targeting the following institutions where the target market frequents:
White maize meal
 Private / Public Schools and Tertiary Institutions –food court
 Medical Centres / Health and Wellness Centres – in the waiting area and coffee shop
 Retailers –Pick n Pay, Woolworths, Checkers, Garage Shops, Hospitals
 Restaurants- Africa 2 Asia,
 Game lodge & Reserves/ Safaris- The real Africa cuisine
 Airlines- South African Airlines flies in and around the African continent.
Instant porridge
 Private / Public Schools and Tertiary Institutions –food court
 Medical Centres / Hospitals- Paediatrics, canteens or patients
 Retailers –Pick n Pay, Woolworths, Checkers, metro city store, clicks, dis-chem
 Medical Retailer – Pharmacies, dispensaries,
 Game lodge & Reserves/ Safaris- The real Africa cuisine
Vita shake
 Tertiary institutions, Colleges and Private institutions
 Medical Centres / Health and Wellness Centres – in the waiting area and coffee shop
 Retailers –Pick n Pay, Woolworths, Checkers, metro city store, clicks, dis-chem
 Medical Retailer – Pharmacies, dispensaries,

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PROMOTION
The overview objectives are to reach the new target market and increase
awareness. Sustain current target market. Increase volumes and market share in the
market. Each segment will have their own marcom strategy.
Table 1.6 Detailed Marcom Summary

Media Advertising:
1. Television
According to reach and frequency. Television adverts, for maize meal and porridge
will be on SABC 1,2,3, and e-TV. The time slots will be selected. All advertisements
for vita shake will be shown on SABC 1 and DSTV.
2. Radio
All radio jingles will be the same as the ones seen on television. On air adverts will be
in the morning and evening when listenership is high.
Print Advertising:
1. Magazine
Black diamonds are targeted in high traffic areas such as the airport magazines.
Sports-illustarted and Cosmopolitan. The lower LSM readership are bono and
fairlady.
Interactive
1. Online advertising:
Websites, Google advertisements and Vita shake individual website.
2. Social media:
Facebook, You Tube, advertisements
Direct Marketing
1. Cell phone:
Develop Customer database SMS ‘3321’ cost of R1 barcode number to win a price.
sms’s can be sent out to the current customers. 1. New product range 2. Special
offers 3. News- next community event 4. Competition notifications
Place Advertising
1. Billboards:
High traffic areas that reach the right audience. Schools, low cost housing areas.
2. Transit:
Black diamonds: billboard at Airport , Gautrain, Inner city transportation zones.

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Store Signage And Pop Displays:
1. Floor advertisements
High traffic stores, metro city, depending on region and reach of the target market.
2. POP Display:
Increase pester power in selected regions, attract black diamonds.

Trade And Consumer Orientated.
1. Sampling: In-store, churches and schools
2. Sampling Black diamonds: See attachment to magazines
3. Bonus pack: 30% EXTRA on samp and maize
4. Shelf delivered coupon: limited to region
5. Free with purchase: Launch gift, free kids lunch bag with every purchase of porridge
6. Free with purchase: Launch gift, free vita shake- shaker/mixer
7. Near pack premium: attached onto maize meal will be a porridge sample box
8. Near pack premium: attached onto porridge will be vita shake

Event marketing and sponsorship
1. Festivals; Community festival Fun Day Festival – promote braaipap etc
2. Sponsor: Soccer team locals or player.

Public Relations
1. Community development- Educational school prefab with meals. 100 white star Low
cost housing development for a community. Vision: appendix
2. Graduate programme; Bursaries and Scholarships. Limited to disadvantaged families

Personal selling
1. Sales force: - Sales force per region: example: kzn region team a: upper region : set
goals & objectives ; Team B: lower region: set goals & objectives :Highly motivated
and competitive driven. Identify strategic distributions channels and outlet This will be
crucial for future growth and must be managed extremely well by the Sales
Managers in each region.

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CONTROLS

1. Receive monthly sales volume and product progress reports from each Regional
manager
2. Monitor sales and expenses to ensure that it is in line with the budget.
3. Monitor market share, competitor levels and pricing through periodic market
research.
4. Monitor customers via surveys.
5. Plan Regional meetings with sales managers from each province
6. Receive monthly Sales reports from retail stores in each region
7. Plan regular meetings with regional Marketing manager 3 times per year.
8. Monitor online website visits by measuring website hit per week.
9. Monitor any changes in Demographics statistics on an annual basis.
10. Plan meetings with maize board every 6 months.

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TABLES
Table 1.1: White and yellow maize: Geographical distribution of production
Table 1.2: Total maize area harvested, production, consumption and prices
Table 1.3: Market share of white maize millers
Table 1.4: Extraction rate of various maize meal types
Table 1.5 Price Structure From farm gate to retailer
Table 1.6: Basic White Star Marcom Strategy

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Table 1.1: White and yellow maize: Geographical distribution of production (%)

Table 1.2: Total maize area harvested, production, consumption and prices)

Table 1.3: Market share of white maize millers

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Table 1.4: Extraction rate of various maize meal types Source: Chamber of milling

Table1.5 Price Structure From farm gate to retailer

Price structure- Supply Chain
Farm gate price (4-month lag)
Transport cost: Farm gate to silo
Handling & Storage cost: Costs of farmer
SAFEX White maize average nearby contract price (4-month
lag)
Transport cost: Silo to Mill door
Handling & Storage cost: Costs of miller
Income from sales of chop
Mill door price
MANUFACTURERS
Production cost (milling costs)
Packing cost
Packing material costs and losses
Administration, Warehouse and selling
Mill site costs
Distribution costs
Total mill site costs
Fixed Capital cost
Floating Capital costs
Total costs
Cost of production of super maize meal
Conversion cost
Average cost of maize (mill door price)
Total super maize meal cost
Divided by average extraction for super maize meal
Average cost of super maize meal
Miller-to-retail margin
Average Monthly Retail Price (actual retail price)

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Table 1.6: Basic White Star Marcom Strategy
WHITE STAR
Segments Mama & Pap Smart star Black Diamond
Target market 18-35 5+ 21-45
Lsm 1-6 1-7 5-7
Slogan Clever choice Clever choice Clever choice
Tagline Move to the taste Smart champion
Product Super maize meal Instant porridge 1 Vita 1
Braaipap 2 2
Rice 3 3
MEDIA ADVERTISING
Television SABC 1,2,3,eTV, DSTV
Radio Ukhozi FM and Umhlobo Wenene FM Ukhozi,5FM,Metro fm,
PRINT ADVERTISING
Magazine Bono, Fairlady Airport magazine, Cosmo,Sport
INTERACTIVE ADVERTISING
Online advertising Website/Google adsetc
Cell phone 24%-96%
PLACE ADVERTISING
Billboards Schools High R/F area
Transit ads City Transport area Airport
STORE SIGNAGE AND POP ADVERTISING
In store High traffic area only Pester Power High traffic area only
Floor ads limited to region Retailers limited to region only
Pop display
TRADE AND CONSUMER ORIENTATED
Sampling Schools, churches Magazines ,In-store
Bonus Pack Samp & maize

Shelf delivered coupon R5.00 limited to region R10.00 limited to region
Premiums Free with purchase eg: Lunch bag
Near pack premium

EVENT MARKETING AND SPONSORSHIP
Festivals Community festival Fun Day Festival – promote braaipap
Sponsor Soccer team locals or player.
PUBLIC RELATIONS
Community Educational school prefab with meals. 100 white star Low cost housing development
development for a community. Vision: appendix
Graduate programme Bursaries and Scholarships. Limited to disadvantaged families.
Personal selling
Sales force Sales force per region: EXAMPLE: KZN REGION
Team A: upper region : set goals & objectives ;
Team B: lower region: set goals & objectives :
Highly motivated and competitive driven.

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FIGURES
Figure 1.1: Gross value for the top ten agricultural products for 2002/03
Figure 1.2: White maize spot price, the super maize meal retail price and the miller to-retail margin.
Figure 1.3: Positioning Map Comparing Consumer Preference 1999-2000 & 2002-2006
Figure 1.4 The Value Chain
Figure 1.5 Porters 5 forces

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Figure 1.1: Gross value for the top ten agricultural products for 2002/03

Figure 1.2: The white maize spot price, the super maize meal retail price and the miller
to-retail margin.

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FIGURE 1.3: Positioning Map Comparing Consumer Preference 1999-2000 & 2002-2006
Map 1999-2000

fine smooth Vitamin taste cooks easy fast soft light hunger energy

Map 2002-2006

fine smooth Vitamin taste cooks easy fast soft light hunger energy

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WHITE STAR CAMPAIGN

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WHITE STAR MAIZE RANGE

STORE PROMO AND POP ADVERTISING
TRADE AND CONSUMER ORIENTATED

PRINT ADVERTISING
INTERACTIVE ADVERTISING
PLACE ADVERTISING

Symbolism

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WHITE STAR INSTANT PORRIDGE RANGE

Research & Development

TRADE AND CONSUMER ORIENTATED - SAMPLING
PUBLIC RELATIONS

CONCEPTS

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1. Brandkey- http://www.brandkey.co.za/
2. Case study reference: Simpson, J., and Dore, B. 2004. Marketing in South Africa:
Cases and Concepts. 2nd edn. South Africa: Van Schaik Publishers.
3. Tigerbrands- http://www.tigerbrands.co.za
4. Sasko - http://saskograin.co.za
5. Kellogs- http://www.kelloggs.co.uk/
6. Bokomo- http://www.bokomobotswana.co.bw
7. Brandkey- http://www.brandkey.co.za/
8. Pioneerfoods- http://www.pioneerfoods.co.za/
9. National chamber of milling- http://www.grainmilling.org.za/
10. National Agricultural Marketing Council (Namc) - http://www.grainmilling.org.za/
11. NDA- http://www.nda.agric.za/docs/fpmc/Vol4_Chap2.pdf
12. Department of Agricultural Economics (MSU
http://www.aec.msu.edu/maizemarket/index.htm
13. IRIN http://www.irinnews.org/
14. Abstract of Agricultural Statistics, SAFEX
15. Sociocultural Influences and Eating Disorders Around the Globe By Mary K. Stein,
Managing Editor: Extract: Dr. Christopher P. Szabo
16. Report on the investigation of the effects of Deregulation on the maize industry.
National agricultural marketing council (Namc) Section 7 committee evaluating the
deregulation process: The maize industry
17. Grain South Africa www.grainsa.co.za
18. National Chamber of Milling www.grainmilling.org.za
19. South African Grain Information System www.sagis.org.za
20. Grain Silo Industry
21. Agricultural Statistics: Department of Agriculture, Forestry and Fisheries
www.nda.agric.za
22. Competition Commission of South Africa www.compcom.co.za
23. Quantec Research www.quantec.co.za
24. ITC Market Access Map http://www.macmap.org/South Africa
25. ITC Trade Map http://www.trademap.org
178

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