Marketing Plan for Chama Rice

MARKETING PLAN FOR CHAMA RICE

EXECUTIVE SUMMARY

BMC has been in operation since July 201 having the milling industry. It was formed with the aim of marketing and popularizing the local brand of rice -Chama Rice.

Increased foreign competition

After the trade liberalization and deregulation of most industries in 1992, Zambian firms have found stiff competition from an influx of foreign rice. With poor quality products and weak resource position, most previously state owned companies simply went under but BNM has survived.

Rising inflation and interest rates

Between 1998 and 2006 the interest rates in Zambia too high ranging from 12% to 28% and this increased the cost of borrowing. Those companies that were highly indebted to banks failed to service both interest and principal and had to be placed in liquidation. This made it difficult for farmers to borrow and GROW Chama rice

Unfavourable foreign exchange rate

The weak kwacha also contributed to the increased cost of doing business especially for those firms that were dependent on foreign imported rice, it the rice was expensive in local currency. This therefore is an opportunity for BMC to capitalize on local rice.

BUY ZAMBIA CAMPAIGN

The government has been promoting the growth of local industries by utilizing local raw materials wherever possible. To this end the government has been selling subsidized fertilizer to rice farmers in the country through the agriculture support programme. Besides the Zambian consumer now prefers consuming local rice which tastier than imported rice. Many consumers are aware that Zambian rice is natural and not a GMO product.

Banda milling hopes to boost its coffers by intensively marketing Chama rice throughout Zambia and for export abroad.

1.0 MISSION AND VISION

1.1VISION

To be a worldclass milling company.

1.2 MISSION

To provide quality milling products to customers in Zambia at affordable.

1.3 VALUES

To have a customer centric approach that will be able to satisfy customers by providing a trust worthy service through dedicated team work .

2.0 MARKETING AUDIT

2.1 THE MACRO- ENVIRONMENTAL ANALYSIS

Jobber (2007) says that a useful model for analysing the firm’s external environment is the PESTEL model. The acronym stands for political, economic, social technological, ecological and legal forces faced by BMC.

2..1 2 Political

The political system affects all organisations and determines the contest within which business operates. Zambia is a free market democratic state and investors are free to externalise whatever profits they makes. This is one reason why the number of milling firms increased.

2..1 .3 Economic

Economic factors affect the purchasing power of potential customers (CIM, 2007). High interest rates and taxes following the recession has reduced aggregate demand in the economy and this has impacted negatively on the profitability of milling firms in Zambia..

2.1. 4 Social Cultural Environment

This explains the changes in the nature, attitudes and lifestyle of the people. While culture describes the basic values, perceptions, preferences, and behaviors of the society ( Kotler and Armstrong 2009 p…. ).

As regards to social-cultural issues, the challenge for BMC entails dealing with social-cultural issues with variouscustomer groupings.

2.1. 5 Technological Environment

Technological changes can affect a milling firm in many different ways (Pearce and Robinson, 2005)

For example , using the internet to order and sell the product.

Improved communications (emails, use of secure intranets, wireless networks) mean that employees of the bank can work out of the office/at home allowing more flexible work arrangements.

2..1 6 Ecological environment

Concern about the environment has led to measure to reduce global warming (Kotler and Armstrong, 2007). As milling company can be directly affected by ecological concern, for example if they lend to companies that are considered not to be environmentally friendly.

2.1. 7 LegalEnvironment

The legal environment covers influences such as taxation, employment law, monopolies, legislation and environmental protection laws.

Organisations need to ensure that they comply with legislation. Failure to do so could result in fines, closures, bad publicity and / or loss of customers. Keys legislation that affects all firms includes: (Thomson et al, 2007)

2.2. FIVE FORCES MODEL

2.2.1 The threat of New Entrants - The Zambian economy has been liberated, meaning any one can enter the market. The threat of new entrants is low because customers are loyal to our brands. There are new entrants such as the coming of cheap from Thailand

2.2.2 Bargaining power of customers - The bargaining power of customers is high because there is high rivalry for rice. Customers are well informed about the quality, prices and difference between the qualities of rice

2.2.3 Bargaining Power of Suppliers - suppliers of BMC are rice farmers in eastern province as well as suppliers of packaging materials. Their power is relatively low because they are many.

2.2.4 Threat of Substitute products – the threat of substitute products is high as there are many imported substitutes.

2.2.5 Competitive Rivalry - BMC competes with many local and foreign suppliers of rice.

2.3 SWOT Analysis

The SWOT analysis is an essential tool in marketing strategy formulation as it highlights a firm’s external opportunities and threats as well as internal strengths and weaknesses (Jobber, 2007)

Possible StrengthsPossible Weaknesses

* quality and flexibility* Low marketing strengths

* Brand reputation* Reliance on local market

* Economies fiscal* Weak Kwacha

* Motivated Workforce* Under utilisation of capacity

* Strong Balance Sheet

Possible OpportunitiesPossible Threats

* Expansion of plant* Cheap foreign imports

* Captive customer base* High interest rates

* Growing population * Weak local currency

* Lack of product innovation

3.0 MARKETING OBJECTIVES

Once a SWOT analysis has been done, the next stage is to set marketing objectives. The objectives must be SMART Stokes and Wilson (2006). For Banda Milling these are:

a)To increase sales of Chama Rice by 20% in the next two years.

b)To establish 10 agencies in neighbouring countries by December 31 this year.

c)To increase Chama Rice awareness levels in Southern Africa by 30% by the end of next year.

d)To drive out foreign imports by the end of next year.

3.1 BUSINESS OBJECTIVES

Firstly BMC needs to remind itself of the company objectives; maintaining its position as the provider of high quality rice; and meeting customer’s expectations (BPP-CIM 2008). Therefore the following are the organizational objectives:

To increase profitability by 15 percent in the next three (3) years.

To increase cash flow by 15 percent in the next 3 years.

To be the market leader in the next 3 years through quality products and services to customers.

To increase the market share by 15 percent in the next 3 years.

4.0 SEGMENTATION TARGETING AND POSITIONING

4.1 CURRENT MARKET SEGEMENTS BEING SERVED

BMCSegmentation has been done by using Geographic variable. Geographic variable defines customers according to their location. The rice Market is divided into regions, countries and cities. BMC hassegmented its Market geographically, targeting specific regions or countries with its Chama rice .

4.1.1.DOMESTIC MARKET SEGMENTATION

4.1.2.On domestic Market, they are three major distinct Segments that BMC is targeting, these are:

4.1.3.Industrial Market: this segment is basically a B2B sector. These customers purchase Rice for their beneficiaries. The example of these customers are hotels, schools ,prisons and hospitals.

4.1.4.Wholesaler Market: this segment purchases rice for resale to the retailers. This includes all the wholesalers and outsourced remote deports ( this covers all the wholesalers in the provinces and outsourced depots)

4.1.5.Retailer Market: this segment( B2C ), buys rice for direct resell to household usage or to consumers. this segment includes Shopping center and supermarkets)

5.1 TARGETING:

5.1.0.BMC having multi segmentation approach in targeting their market, hence practicing differentiated marketing. The firm intends to continue adopting differentiated targeting for the following reasons.

5.1.1.The approach allows marketers to tailor their offerings to individual segments, thereby enabling customer satisfaction due to better meeting their needs.

5.1.2.it is also a distinct source of competitive advantage and it allows BMCrice spread its risk, so that if a given segment becomes unattractive or declines, there are still other Market segments that can generate revenue for BMC.

5.1.3.Being a new player in Zambia ,BMCwill generate enough resources for it to adopt differentiated marketing to further achieving total market domination.

6.0 Branding and Positioning

The product was associated with the company name – Banda Milling – which has been in business for the lastthreemonths. It has been decided to provide the product with a distinct brand name – “Chama ,” meaning “delight.”Chama Rice is high quality brand of Rice in Zambia because it is completely natural. It is for this reason that most Zambians prefer it to imported rice from Asia. Indeed a brand must be distinct, memorable and associated with quality, that is exactly what the Chama Rice brand is. The brand is distinct in that it is named using a local language – Nyanja. It is memorable in that it reminds buyer of its natural flavour. It is associated with Zambia.

Positioning Map

High Price

* Other brands within Zambian * South African Rice

* Chama

Low High

QualityQuality

* Thai Rice

Low Price

6.1 UNIQUE SELLING PROPOSITION – USP

The factor or consideration presented by a seller as the reason that one product or service is different from and better than that of the competition is called the unique Selling Proposition or USP.As the Chama brand is viewed as high quality but moderately priced, it has been easier to sell. The message to the target market has been “Buy Chama Rice support your own. In the eyes of customers the Chama brand is positioned number one in Zambia.

7.0 COMPETITIVE STRATEGY

BMC will follow differentiation strategy in the marketing of Chama Rice( Porter,1980)

7.1 DIFFERENTIAON.

A firm following a differentiation strategy seeks to build customer loyalty by positioning its goods or services in a unique or different fashion. That, in turn, enables the it to command a higher price for its products or services than competitors. There are many ways to create a differentiation strategy, but the key is to be special at something that is important to the customer. In other words FBZ strives to be better than its competitors at something customersvalue.There are risks in pursuing a differentiation strategy. BMC must consider how long it can sustain its service’s differentiation; changing customer tastes make the basis for differentiation temporary at best. BMC must develop strategies that exploit all of its competitive advantages in the Zambian MILLING industry. This entails

Responding quickly to customers’ needs.

Remaining flexible and willing to change.

Constantly searching for new, emerging market segments.

Building and defending market niches.

Erecting “witching costs,; the costs a customer incurs by switching to a competitor’s product or service, through personal service and loyalty.

Remaining entrepreneurial and willing to take risks and act with lighting speed.

Constantly innovating on the marketing mix of Chama Rice

7.2 GROWTH STRATEGY

Source:

7.2.1 Market Penetration

BMC will sell more Chama rice to its existing customers. This means increasing our revenue by, for example, promoting the new Chama Rice and repositioning the brand as natural.Rice can be taken at breakfast lunch and supper.

7.2.2 Market Development

BMC will introduce Chama Rice in new markets. This means that the product remains the same, but it is marketed to a new audience in Namibia and Malawi where there is high demand for Zambia Rice.

7.2.3 Product Development

This is a new product to be marketed to our existing customers. BMC is replacing imported Thai Rice with the local brand –Chama Rice.

8.0 CRM AND CUSTOMER SATISFACTION

RM is a marketing area that has been greatly influenced by the availability of IT solutions particularly large interactive databases to gather and store information not only about customers but also community groups ( Williams and Curtis,2008)

The characteristics and unique needs of customers need to be profiled into BMC database which should be updated as these needs change.

BMCas marketing oriented firm should

Identify build and continuously nature relationships with its customers.

Communicate with community groups on a face to face basis as well as by mail, phone and electronic media.

Must assess the attitude of each customer group towards the relationship and see areas of improvement.

Treat customers groups as equal; partners in the equation.

This can lead to better marketing of the Chama by focusing on:

• effective targeted marketing communications aimed specifically at customer needs
• a more personal approach and the development of new relationships with intermediaries in order to win more business in the future

The customer feels that he is more "part of the team" instead of just a subject for sales and marketing (the proverbial number), customer service is better, his needs are anticipated. There is no doubt that customer satisfaction will go up. If the products sold exceed the customers expectation, of course, no CRM system can help you with shoddy products.. Many companies think that if customers are satisfied that this is a good predictor for repeat business. However, this is not the case. Only delighted customers have a great level of loyalty.

9.0 MARKETING MIX

9.1 PRODUCT

Product is a bundle of benefits which a set of wants that customers have. (CIM 2009 pg. 75) BMC promises to keep its number one position in the milling industry. The organization products are very profitable because Chama Rice will gain high market share in the next 12 months because it’s a way of adding value to customers.

9.2 PRICE

Price is a measure of value exchanged by the buyer for the value offered by the seller. (CIM 2009 pg. 101) The role of price in the marketing mix is still significant and should not be underestimated. It contributes towards the organization’s business and financial objectives.

Pricing is the only element of the mix which generates revenue rather than creating costs.

It also has an important role as a competitive tool to differentiate a product and the organization thereby exploit market opportunities.

Pricing must be consistent to overall image created for the product.(CIM 2009 pg. 101)

The pricing strategy will be used which is pricing penetration because the product is new and that’s when it is launched. The advantage of differentiated marketing strategy enables customers to make a choice as to which products are the best.

9.3 PLACE

Place is concerned with the selection of distribution channels used to deliver goods to consumer. ’People can only buy products that are available and easily obtained’’ Blythe, J. (2005) pg. 190.

Marketing add value for organization by getting products reliably and efficiently. This channel distribution refers to the methods by which our products are transferred from the company to consumers. This will add value to customers by creating comfortable and convenient places to buy such as supermarkets, and grocery stores throughout the country. The effective distribution management will help BMC breweries benefit through:

Customer value through more choice and customization better quality control , faster delivery, less likelihood of stock outs service-driven supply planning; convenient, size and undamaged handling, storage, transport and display of products.

Cost savings that can be made when properly planned approach is undertaken allowing long steady production runs and minimizing inefficient stock holding.

Closer links between the suppliers and the organization (CIM 2009 pg. 117)

9.4 PROMOTION

Promotional strategy

Both TV and radio advertising will be used to create awareness and build customer preference, we advertise often on pack time because we will catch a large audience at the time.

Internet advertising will be used via the BMC website so that people who visit the website get to see the adverts over and over. Benefits will be emphasized on the firm’s website.

• The time the government through the ministry of health will launch Chama Rice .It will be an opportunity for BMC to make people aware of the brand at Inters Hotel.

Press magazine advertising in the most read magazines like Trend setters and speak out.

Printing flyers will be placed in supermarkets (checker’s stores that customers who come to shop can pick one and read through.

Billboards advertising will be used to target large audience this will be done on bus shelters. This will be a good way to offset competitor advertising.

9.5 PEOPLE

The higher the level of customer contact involved in the delivery of product or service, the crucial is the role people. (CIM 2009 pg. 161) The employees should delivery good customer service in delivering of the product; this will contribute to culture of the organization. Will we have to contact with our customers. The launch of Chama Rice will help Zambian breweries respond to customer’s needs. BMC must promote values of customer service to create culture of customer service. This will entail the following:

Job design to give people the authority they need to meet customer needs.

Programmes of training and development to ensure that staff have both technical competence and people skills

Standardized rules and practices to ensure consistent basic levels of service

Effective programmes of staff motivation and reward creating commitment to the organization, quality and customers

Effective communication of quality, service and customer care values. (CIM 2009,pg 162).

9.6 PROCESS

Process involves the ways in which marketing tasks are achieved. They include all administrative, ordering and customer service features. To avoid queues BMCwill advise customers to pay through the organization account at city Bank and Stanbic Bank, so corporate customers who are far do not need to travel to Lusaka to pay and back that’s those who pay in advanced the new customers for Chama Rice will not need to step a foot at BMC head office but just pay direct through the Banks.