Internship Report on“The Knorr Story”
Activating a healthy soup brand into the daily life of Bangladeshi Bangladeshi Soup Consumers
Exam ID: 110469
Internship Report on“The Knorr Story”
Activating a healthy soup brand into the daily life of Bangladeshi Soup Consumers Consumers
Submitted To:
Chairman Internship Placement Committee
Submitted By:
Exam ID: 110469 Class ID: 793, Registration No: 30939 4th Year, 8th Semester, BBA Program Academic Session: 2010-11
Date:
19th January, 2015
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Institute of Business Administration, Jahangirnagar University Letter of Transmittal
January 19, 2015 Chairman Internship Placement Committee Institute of Business Administration Jahangirnagar University
Subject: Submission of internship report on “The Knorr Story” of Unilever Bangladesh Limited
Dear Sir, It is a great pleasure to submit this report based on my internship experience at Unilever Bangladesh Limited with the activations of Knorr Brand. I have prepared the report as per your guidelines and recommendations. I am looking forward for your sincere judgment on this report. I tried my level best to fulfill the requirements by engaging myself seriously and giving my best effort to prepare this report. It has enabled me to gain a better understanding of my experience which will help me in my career development. Your kind acceptance and judgment judgment will surely inspire me.
Sincerely yours, Exam ID: 110469 Registration Number: 30939 Class ID: 793 4th year, 8th semester Batch Number: 20th, BBA Program Academic Session: 2010-2011
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Acknowledgement
This is my humble attempt to present gratitude to those who have made it possible to prepare this report. First and foremost I present my gratitude to the Almighty Allah for making everything possible. It would never be possible without the help of the Almighty. I would also like to thank my family, friends and all my teachers who have supported me throughout the internship program and also this report. I would like to present gratitude to my Line Manager in Unilever Bangladesh, Mr. Ishtiaque Shahriar. Without his help and effort to teach me the ways of a multinational company I would be lost. He was kind enough to teach me, trust me and give responsibilities to me so that I could learn. Last but not the least I would like to express my gratitude to my assigned internship supervisor, Ireen Akhter, for the valuable guidance and support. I really appreciate the way she has guided me through this report.
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Table of Contents Title
Page No.
Executive Summary
6
Chapter 1
Introduction
7
Chapter 2
Company Profile
8
Chapter 3
Brand profile of Knorr
13
Chapter 4
The industry and the competitive framework
15
Chapter 5
Knorr STP
17
Chapter 6
Marketing Mix
19
Chapter 7
Findings, Challenges & Recommendations
24
Chapter 8
Conclusion
25
Reference
26
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Table of Figures Title
Page No.
Figure 1
Unilever’s Winning Strategy
10
Figure 2
Departments of UBL
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Figure 3
Brands of Unilever Bangladesh Limited
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Figure 4
Competitive Framework of Knorr
15
Figure 5
SWOT Analysis of Knorr
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Figure 6
Promotional Mix of Knorr
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Executive Summary
This report aims to explore the issues revolving the market penetration and activation of the Unilever global brand Knorr, in Bangladesh. This report further investigates the marketing aspects of Knorr to assess the overall impact and success of the launch. Information was obtained observing Knorr’s market activation
campaigns, talking to employees and browsing through online articles on Knorr. The report introduces both Unilever and Knorr to the readers and critically evaluates the different marketing and competitive aspects of the launch in Bangladesh. The report examines the problems Knorr might be facing and has unlocked new areas that need attention and startling findings. The results recommend possible solutions that Unilever Bangladesh Limited can adopt to mitigate the aforesaid problems. Given the introduction of Knorr in Bangladesh in recent times and absence of any report on such topic, these finds highlights the significance of this report and suggests that further research and analysis can be carried out in the future.
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Chapter 1: Introduction 1.1 Origin of the Report
This report has been prepared as a part of the requirements of the Internship course. For the purpose of this course, I completed my internship in Unilever Bangladesh Limited. This report has been prepared under the supervision of my internal supervisor, Ireen Akhter, Institute of Business Administration, Jahangirnagar University, Bangladesh and Mr. Ishtiaque Shahriar, Activation Manager of Unilever Bangladesh Limited. Throughout my internship I worked in the Activation (Brand Building) Department of Unilever Bangladesh Ltd. Hence with the permission of my supervisor, my internship report has been prepared on the market penetration and activation of Knorr, a global Unilever brand, recently launched in Bangladesh. 1.2 Objective of the Internship Course
The objective of this course is to unleash the theoretical knowledge of the students and enable them to acquire a firsthand practical work experience. The primary objective is to get the students adapted to the workplace, which they would soon embark upon. Internship enables a student to gain insight of the ‘realworld’ outside the fortress of education. Also students can learn more about the area they will soon work
and get an on-the-job training. Writing the internship report allows a student to mesh the theoretical and practical experiences of work. 1.3 Limitations of the report
Although this report has provided enlightening insights but it has some limitations. Firstly, no primary research data have been collected for the purpose of this report. T his raises questions against the validity of the data presented throughout the report. Data have been collected within a very short span of time and this report has been prepared within a very short time. A comprehensive report would require further research on these issues with more time, data and observation.
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Chapter 2: Company Profile 2.1 Introduction to Unilever
No matter who we are, or where in the world we are, the chances are that Unilever products are a familiar part of our daily routine. If we look into our kitchen, or on the bathroom shelf, we are bound to see one of Unilever well-known brands. Unilever brands are trusted everywhere and, by listening to the people who buy them, the company has grown into one of the world's most successful fast-moving consumer goods companies. In fact, 160 million times a day, in over 180 countries, someone somewhere chooses Unilever products at key moments of their day. Unilever products touch the lives of 2 billion people every day. Unilever creates, markets and distributes the products that people choose to feed their families and keep themselves and their homes clean and fresh. People's lives are changing fast. As the way we all live and work evolves, our needs and tastes change too. Unilever aims to help people in their daily lives by developing new products, improving tried and tested brands and promoting better, more efficient ways of working. Unilever is an Anglo-Dutch company, with a history of colonial exploitation, on which it has gradually built its capital. Unilever has a portfolio of brands that are popular across the globe - as well as regional products and local varieties of famous-named goods. This diversity comes from their key strengths. Globally Unilever is market leader in Savory, Dressings, Tea, Ice Cream, Spreads, Deodorants and Mass skin. Unilever is number 1 and number 2 in more than 80% of its business. Unilever employs more than 167,000 people and had worldwide turnover of €44.3bn and operating profit of €6.3bn in 2010 (Unilever
Annual Reports and Accounts 2010). With sustainability in mind, Unilever strives to create a better future every day. This is reflected in their ambitious vision to double their size of business while reducing the overall environmental impacts across the entire value chain. Over the last fifteen years they have reduced environmental impacts of their manufacturing operations by 41% for CO2 from energy, 65% for water use and 73% for total waste (measured per ton of production) (Sustainable Development Overview 2009). According to their sustainable living plan, Unilever will help 1 billion people improve their health and wellbeing, halve environmental impacts of their products and source 100% of their agricultural raw materials sustainably. 2.2 History of Unilever
Unilever's corporate vision – helping people to look good, feel good and get more out of life – shows how clearly the business understands 21st century-consumers and their lives. But the spirit of this mission forms a thread that runs throughout its history. In the 18 90s, William Hesketh Lever, founder of Lever Brothers, wrote down his ideas for Sunlight Soap – his revolutionary new product that helped popularize cleanliness and hygiene in Victorian England. It was 'to make cleanliness commonplace; to lessen work for women; to 9
foster health and contribute to personal attractiveness, that life may be more enjoyable and rewarding for the people who use our products'. This was long before 'Corporate Mission' was coined, but these ideas have stayed at the heart of the business, even if their language – and the notion of only women doing housework – has become outdated. Although Unilever wasn't formed until 1930, the companies that joined forces to create the business we know today were already well established before the start of the 20th century. Unilever's founding companies produced products made of oils and fats, principally soap and margarine. Tough economic conditions and the First World War made trading difficult for everyone, so many businesses formed trade associations to protect their shared interests. Unilever was founded on 1 January 1930 by William Hulme Lever, Antonius Johannes Jurgens and Samuel van den Bergh and when Lever Brothers merged with Margarine Unie. Since its inception Unilever grew by acquiring brands and becoming what it is today. In a history that now crosses three centuries, Unilever has created products that help people get more out of life – cutting the time spent on household chores, improving nutrition, enabling people to enjoy food and take care of their homes, their clothes and themselves. 2.3 Mission
The world in which we operate is changing and consumers are increasingly bringing their views as citizens into their buying decisions, demanding more from the companies behind the brands. They want companies and brands they trust. In the last five years, Unilever have built their business by focusing on their brands, streamlining how they work, and improving their insight into the evolving needs and tastes of consumers. Unilever’s mission is to add vitality to life. Unilever meets every da y needs for nutrition, hygiene and
personal care with brands that help people feel good, look good and get more out of life. The company sees a growing consumer need for: • A healthy lifestyle • More variety, quality, taste and enjoyment • Time, as an i ncreasingly precious commodity • Helping people to feel good, look good and get more out of life, which will enable them to meet these
needs and expand their business. Unilever is in a unique position to understand the interrelationships between nutrition, hygiene and personal care. This is possible because of its strong science capability and its locally rooted consumer insight. It is by bringing all this together that the company can strive to contribute to quality of life and wellbeing adding vitality to life. The long-term success of the business is intimately interconnected with the vitality of the environment and the communities in which the company operates. The environment provides
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Unilever with raw materials and the ingredients necessary to make the products. Healthy, prosperous communities provide the company with a healthy, growing consumer base. 2.4 Strategy Unilever’s aim is to win share and grow volume profitably across categories and countries. Unilever has a
Figure 1 : Unilever’s Winning Strategy
strong portfolio of leading brands and market positions. Their outstanding presence in the emerging markets makes them well positioned to win where much of the world’s future growth will be0F1. Unilever
achieves its growth priority using its compass strategy, which strategizes where it will win and how it will win. Unilever’s strategy (where we will win) is to win share and grow volume in every category and country. 2.5 Unilever Bangladesh Limited
Unilever started its onshore operations in Bangladesh in 1964 when its soap factory was set up at Chittagong. Lever Brothers Bangladesh Ltd (LBBL) was formed in 1973 with a 39.25% share held by the government. In the 1990s, the Company diversified its base of personal and laundry soaps and shampoo and now has a strong range of 17 brands. In December 2004, the Company changed its name to Unilever Bangladesh Ltd (UBL) as part of an alignment with the parent group – the Unilever group of Companies. 2.6 Values of UBL Unilever Bangladesh conducts its business in Bangladesh according to the Unilever
Code of Business Principles, which are a clear guide to corporate behavior. It is widely understood in society that UBL is uncompromising in its approach and conducts business with the highest level of ethical
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standards and sound principles of corporate governance. With 10 successive years of double digit growth, the Company has proved that businesses in Bangladesh can successfully grow with ethical practices. 2.7 Organization Structure
Unilever has two parent companies: Unilever NV in Rotterdam, Netherlands, and Unilever PLC in London, United Kingdom. Both Unilever companies have the same directors and effectively operate as a single business. The current non-executive Chairman of Unilever N.V. and PLC is Michael Treschow while Paul Polman is the CEO. Unilever country businesses report to Regional Presidents through the clusters that they geographically are located in. Unilever Bangladesh falls in the South Asia cluster of the AAC (Asia, Africa, Middle-East, Turkey, & Central & Eastern Europe) region. The Regional President for AAC reports to the Unilever Group Chief Executive. Unilever Bangladesh’s governing body is the Board which comprises
representative Directors of all its shareholders. The day to day management of the Company is with the Company’s Leadership Team comprising the Chairman & Managing Director and the functional Directors.
There are 5 functional Directors who, in addition to holding joint responsibility for the running of the business, also head their respective functions. The Company has management strength of 200+ across different levels and another 600+ are employed as non-management staff (NMS). Unilever operations in Bangladesh provide employment to over 10,000 people directly and through its dedicated suppliers, distributors and service providers. 99.5% of UBL employees are locals and they have equal number of Bangladeshis working abroad in other Unilever companies as expatriates.
UBL Departments Brand Building
Finance
Supply Chain
HR
Customer Development
Figure 2: Departments of UBL 2.8 Unilever Brands in Bangladesh
Unilever Bangladesh is market leader in 7 of the 8 categories it operates in. Unilever Bangladesh manufactures (except Pureit, which is not manufactured in Bangladesh) and markets all these fast moving consumer goods for the consumers in Bangladesh (only Glycerol or Glycerin is a B2B product which is a byproduct of soap manufacturing are sold off to other businesses such as pharmaceuticals and tobacco companies). Key brands in their category are illustrated in the following table. The strength of UBL brands
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is reflected in its winning recognition as best brands. Unilever Bangladesh Limited has been bestowed with 25 awards in the month of November by Commward 2014 and Best Brand Awards 2014.
Product Categories Home and Personal Care
Brand
Home Care
Fabric Wash
Personal Care
Dish Wash Skin Care
Hair Care
Oral Care
Foods
Deodorant & Fragrance Tea Savory
Water Purifier
Wheel Rin Surf Excel Vim Pond’s
Vaseline Fair & Lovely Dove Lux Lifebuoy Clear Sunsilk Dove Close Up Pepsodent Axe Rexona Brooke Bond Taaza Knorr Pureit
Figure: Brands of Unilever Bangladesh Limited
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Chapter 3: Brand Profile of Knorr 3.1 Introduction to Knorr
Knorr as a brand has always set out to empower homemakers and enable them to make healthy, wholesome and delicious food options that are low on sodium and cholesterol content. Knorr believes that good food matters. It adds untold pleasure to our lives. And everyday meals can be just as magical as special occasions. Food is not just fuel, it really is the glue of life. This conviction lies at the heart of Knorr's success - it is Unilever's number one brand. A passion for good food goes right back to Knorr's earliest days. The business was formed in 1838 and since then Knorr has become an international brand offering a wide range of bouillons, soups, seasonings, sauces, soupy snacks, dressings and frozen and ready-made meals. Knorr products owe their tastes and flavors to the culinary skills of its chefs. Knorr embodies a truly global cuisine, which began when the globe-trotting sons of its founder started importing new ideas from overseas. The tradition stands today and Knorr’s drive for innovation still centers around its original factory
in Heilbronn where international teams of chefs contribute to product innovation. Consumers see Knorr as a passport to world cuisine, adding new ideas and new twists to old favorites. Knorr has the history and knowledge to move effortlessly between cuisines and countries. Soup is at the heart of good food and good nutrition - and the heart of Knorr. Soup naturally enjoys a healthy nutritional profile, can help us increase our daily consumption of vegetables and will help us look good, feel good and keep fit. For instance, people who eat more soup tend to have: • A lower Body Mass Index • Lower fat intake • Lower energy intake per day • Better cholesterol values • Better nutritionally balanced breakfasts, lunches and dinners
Soup is a nourishing dish offering an almost primitive comfort. That is why Knorr will continue to create delicious soups, based on its long experience of producing soups of all kinds and flavors. Knorr is a trusted and popular brand, recognized and appreciated all around the world. Knorr products are currently sold in more than 80 countries and it is growing fast beyond its European heartland, particularly in Latin America, Africa, the Middle East and Asia
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3.2 History of Knorr
Carl Heinrich Knorr was born on May 15, 1800, at Meerdorf near Braunschweig, Germany. In 1838, he built a factory in Helbronn for drying and grinding chicory for coffee trade. As industrialization was spreading, C.H. Knorr realized the necessity for quickly prepared and nutritious meal among factory workers. After experimenting with drying vegetables and flavorful seasonings, he developed a preservation process that maintains the natural values of the ingredients and their flavors with faster cooking times, providing the basis for the development of dried soups. In 1873, the Knorr Company began packaging and selling soup mixes in food shops. Within the next decade, Knorr Company expanded internationally with packaging plants in Austria and Switzerland and started offering an imposing array of products including cereals, vegetables, potato flakes, and an early convenience product - soups in a compressed tablet form. In 1958 Knorr became a part of CPC International Inc, a predecessor of Best Foods. In October 2000, Knorr was acquired by Unilever, which was sold in 87 countries worldwide. After the acquisition, Unilever used the brand name of Knorr to enter frozen foods sector. Despite all the changes that have taken place throughout the years, Knorr is still rooted in chefmanship and knowledge of taste and flavors from around the world. Today, the Heilbro nn factory is still the beating heart of Knorr’s culture and innovation process - a team of 21 chefs from 9 countries with global experience makes sure that good food remains at the top of the agenda. Because of its history, reinforced by the usage of Chefs in its past communication, Chefmanship has become part of Knorr’s DNA.
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Chapter 4: Situation Analysis 4.1 The Industry and the Competitive Framework
Snacking today in Bangladesh is mostly about eating not so healthy foods such as fried snacks, chips, biscuits, noodles, chanachur, etc. Few families have soup as snack, which in most cases are associated with entertaining guests and patients. The soup industry in Bangladesh is not very mature and there is a high potential for growth in the future. Globalization has led to a change in the culinary taste in the people of Bangladesh and has resulted in a variety of cuisine now available in the country. People’s taste palate
has also changed. Even few years ago having soup or noodles in the evening as a snack was not the case. The packaged soup market is predominantly led by Maggi (Nestlé Bangladesh Ltd), who is the current market leader. Maggi offers traditional soups in Thai, Chicken and Vegetable flavors. After the launch of Knorr in this market, it has become the market challenger to Maggi. However, there are other players in the market such Continental, Black & Gold, Campbell’s, etc. which are manufactured outside Bangladesh.
These soups are imported and are a part of the grey market. They are only sold in supermarkets and also unlike Maggi and Knorr (which are priced almost in the same range, currently around BDT 35) they are heavily priced (above BDT 100 on average) and hence can serve only the upper tier of the market. In fact sometimes Knorr, coming from outside Bangladesh (in flavors which are not available in Bangladesh such as Chicken Delight), pose a huge threat in the upper tier of the soup market. Apart from these, there are indirect competitors such as Thai, Chinese and other restaurants serving soup. Home-made soups are also indirect competition. In fact indirect competition also exists in the form of other ready meals and evening snacks.
Figure 4: Competitive framework of the Soup Industry in Bangladesh
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4.2 SWOT Analysis
SWOT analysis is an extremely critical analytical tool for any business activity. In order to have a comprehensive understanding of the current situation of Knorr Brand in the Bangladeshi industry, it is crucial to know the strengths, weaknesses, opportunities and threats that exists for this brand. Knorr’s biggest strength lies in its global identity. It was one of the largest food brand globally and bears a
very strong heritage. Also, the strong distribution channel of Unilever in Bangladesh gives it a competitive edge over its competitors. Knorr also offers a wide variety of soups which helps them to attract diversified pool of consumers. Knorr tries to establish itself as a “Healthy” brand which is one of its core strength too
as it is the only brand that claims to ha ve “Real Chicken” in it. However, Soup is still something that Bangladeshi consumers lack awareness about. And also, Knorr is an urban-centric brand which can be a big setback in a country where most of its people live in rural areas. One of the biggest opportunity for Knorr is that (Net) disposable income has increased over the past few years, thus increasing the consumers’ purchasing power. Also, awareness of healthy, hygienic and
conveniently packaged food is on the rise. And Consumer exposure to foreign products has also increased.
Strengths:
Weakness:
> Strong brand heritage.
> Low Brand Salience Levels
> Expanding distribution network.
(Consumers are not really aware of the brand’s benefits, despite reasonably high recall)
> Wider variety of taste offered to the consumers.
> Limited Distribution
> Health consciousness on the rise in consumers.
> Offering suitable for urban
SWOT Analysis
markets only
Opportunity: > Disposable income has
Threat:
increased over the past few years,
> Influx of other foreign
thus increasing the consumers’
brands in the same category can
purchasing power.
give rise to sterner competition
> Awareness of healthy, hygienic and
conveniently packaged food
> Frozen foods can curtail the sales.
is on the rise.
Figure 5: SWOT Analysis of Knorr in Bangladesh
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4.3 The Launching of Knorr
Before Knorr was launched, Maggi was a virtual monopoly in this market. Apart from the few imported rivals, Maggi almost owned the market. But then why did Knorr decide to penetrate the market? UBL does not have a strong foothold in the foods market in Bangladesh. In fact they have no brand operating in the savory market, whereas Maggi is an established brand. Only 5% of profits of UBL come from food, amongst which most of it comes from tea (Taaza). But UBL believed there was enough room in the market for Knorr to penetrate. The company realized that despite Maggi’s domination, there are people who do not like
Maggi soups. In addition, Bangladesh is a developing country and the market for soup, therefore, has the ability to grow. So UBL realized Knorr can: • Convert Maggi soup consumers • Convert non-soup consumers • Serve people who do not like Maggi soup
In December 2010, Unilever Bangladesh Ltd launched Knorr, its leading global savory brand, in 21 distributor points in Bangladesh. Knorr was launched in four flavors. Chapter 5: Knorr STP 5.1 Positioning
The idea is that people eat snacks in the evening which are not healthy, such as chanachur, samocha, etc. Knorr is positioned as a 7 pm snack, which is healthy and provides consumers with real chicken/vegetables and at the same time will not destroy their appetite for dinner. 5.2 Differentiation
Although Maggi focuses on convenience, Knorr differentiates its soups based on the two things – its use of real items in the soup and distinctive flavors which Maggi does not offer. Knorr uses real items, whereas Maggi uses flavor. Knorr adds raw materials in the form of actual chicken or corn. It is very difficult sourcing the quality of materials in Bangladesh, such as chicken. Raw materials of Knorr come from Pakistan and South Africa, on which high taxes have to be paid. But Unilever has the capability to maintain, given it has setup a new foods factory in Chittagong and hence can maintain cost advantages. Knorr enables consumers to have real chicken or vegetable at 7 pm.
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5.3 Targeting Target customers: The primary target market for Knorr is people who prepare meals at homes every day
for loved ones, primarily homemakers and mothers, whose relationship with cooking is both positive and negative. This is because it is a ceaseless, intense and mundane everyday task, which t hey get tired of at some point. In addition cooking increasingly demands their time, skills and ideas to prepare meals from the start every single day. On the other hand, it is a way of pleasing and nurturing their loved ones with great taste and good nourishment, which would earn them appreciation and recognition in the household. For mothers, cooking is a source of influence and how they shape their household – it defines their role in the house and fabricates their identity. Also mothers are the people who will buy soup since “mummy”
decides what children will have.
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Chapter 6 Marketing Mix
Marketing Mix is defined as the set of all controllable tactical marketing tools – product, price, place, and promotion – that a firm blends to produce the response it wants in the target market (Kotler & Armstrong, 2008). The marketing mix of Knorr has been discussed in details throughout the rest of this chapter. 6.1 Product
The product is the core offering – the soup. UBL has to ensure that Knorr soups perform against the expectations set by the proposition. They understand that a good performance is not adequate, they must exceed consumer expectation to delight them. 6.1.1 The Brand The American Marketing Association defines a brand as “a brand is a ‘name, term, sign, symbol, or design,
or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition” (Keller, 2008). UBL has very strong brands in its portfolio
(see Appendix 1). Despite its brand domination in five categories, UBL is relatively weaker in the snacks category (Maggie has won the best brand award in snacks category in 2010). The practical challenges of preparing healthy and delicious meals every day are getting in the way of enjoying the spirit of family meal times. Knorr aims to liberate people from the tensions of meal preparation (due to increasing lack of time, skills or ideas) so that they can focus on enjoying the many positive benefits of mealtimes. Knorr inspires and enables better meal times. It believes in producing natural, nutritious and delicious food with less cooking time, making cooking fun and easy and enabling consumers to spend more time with their loved ones (Knorr South Africa, 2011). The specialty of Knorr is the use of real items in the soup, such as chicken and vegetables, which makes it healthy and natural. It believes in the power of meals to make a difference to peoples’ lives by making joyous mealtimes happen. 6.1.2 Brand Personality
Brand personality is a set of human traits attributed to a brand (Keller, 2008) . Knorr is simple and practical, warm and close, optimistic and witty, fresh and colorful. 6.1.3 Product Depth
The depth of a product mix refers to how many variants are offered of each product in the line (Kotler, 2003). Since the new tastier Knorr Soups, with 100% Real Chicken and Vegetables, comes in the four following delightful flavors, it has a depth of four. • Chicken Mushroom Soup • Classic Tomato Soup
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• Chicken Ginger Soup • Sweet Corn Chicken Soup 6.2 Promotion (Communication)
Promotion is getting the message across to the consumer. Through their c ommunication and activities, UBL must be able to make an impact on the way consumers think and feel about the brand. The main communication strategy that Knorr used was first to create awareness about unhealthy snacking at 7pm and then establish Knorr in the minds of the consumers as the right snack for 7pm – tasty with 100% real chicken/veg. After that Knorr adopted sampling activities to let consumers experience Knorr soups, followed by continuous reinforcements in form of ads to remind them to have Knorr soups. Overall, Knorr used a 360° deployment plan for promotion, as illustrated in Figure 4.1. Let us discuss each of the promotional tools used in details.
TV
Print
Radio
Digital
Activations
POSM
Figure 6: Promotional Tools for Knorr 6.2.1 Digital
Social Media is the best marketing tool available for any company given its huge reach and no cost. UBL used Facebook as the social media channel, because of its huge popularity in Bangladesh. To arouse consumer interest, UBL even created an online game in Flash called “Knorr Soup Chef”. The game can be found in Facebook at http://apps.facebook.com/makeknorr/ . The game received positive feedbacks from users. In the game the players are provided with a bowl and they have to catch the right ingredients to make their own Knorr Soup. Points are awarded for catching every healthy ingredient for preparing any of the four combinations of healthy Knorr Soup. Catching Chicken and Ginger will create Chicken Ginger Soup, Chicken and Mushroom will create Chicken Mushroom Soup, Double Tomato will 21
create Classic Tomato Soup and Chicken and Corn will create Sweet Corn Chicken Soup. Amongst the good ingredients there are also junk foods such as ice creams, cookies, hotdogs, burgers and drinks, which if caught, cause the players to loose points. The players are provided with a time limit and a target score and they can play at four levels. 6.2.2 Television
UBL used a teaser and 30 seconds thematic TVC in almost all TV channels of Bangladesh. The advertisement is regionally made and is hence similar to that in India (with some modifications to accommodate Bangladeshi products and dialects. The idea of the TVC was to establish Knorr as a Tasty and Healthy 7 pm snack with 100% real chicken, promote the four variants and encourage daily consumption. In addition to these ads, UBL enjoys a spillover effect from Knorr ads in Indian television channels. Most of the urban population of Bangladesh watches a wide array of Indian television channels, where similar Indian ads of Knorr are broadcasted. These ads hence create brand awareness and recognition for Bangladeshi target audience, with no cost for UBL. 6.2.3 Print
Knorr also placed ads in the major national dailies to encourage daily consumption. 6.2.4 Point of Sales Materials (POSM)
POSM has been deployed in penetrated outlets. Knorr was provided with dedicated shelf space in Modern Trade (MT). Also in both Modern Trade and General Trade (GT), different hangers (with 4 pockets for 4 variants), buntings and dangling were used to draw consumer attention to Knorr. POS visibility is very important to ensure brand preference over Maggi. 6.2.5 Radio Knorr also used radio slots for promotion. A dedicated “Happy Hour” was featured at 7pm in two m ajor
radio channels of the country (Radio Today and ABC Radio). This was to enable consumers to relate Knorr to 7pm. 6.2.6 Sampling & Activation
Food items necessitate sampling and UBL used wet sampling and activation as its major mode of promotion. And also this was the most successful. Consumers develop opinions based on perception and sampling reinforces or changes their opinion. It is important that people get a good perception of the brand. While launch8ing, Knorr did wet sampling in market areas of Dhaka. Three major types of sampling were carried out.
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• Sampling activation was done in Agora and New Market. Soups were served at 7pm and consumer
feedback was taken. Also a booth was installed for consumers to buy soup. UBL targets to sample 1 million people in 2011. • MT (Modern Trade) sampling: Sampling three flash mob in KA (Key Areas) • Sampling Van
Knorr now has 3 fixed activation booths in 3 large shopping complexes in Dhaka. These are: • Basundhara City • Shimanto Square • Jamuna Future Park Limited
Through these shopping complexes, Knorr successfully reaches around 15% of the shoppers every day. UBL also installs Knorr outlets in various events to activate this brand through sampling. UBL tries to uphold the international standard of Knorr Product and Service, through training the Knorr Brand Promoters regularly. 6.3 Place (Distribution)
UBL must ensure that its products are available in the right place and time when consumer might want to buy them, e.g. how do they look on shelf and are they in the right place in the store. Given UBL’s wide and extensive distribution network in the country and excellent marketing capabilities and channel expertise, it took a conservative approach by launching Knorr in few distribution points. Knorr was launched in only 21 distribution points and only in urban areas. So why did a company, who believes in extensive distribution, chose a selective distribution strategy? This reasoning behind this was to control the whole environment initially. For food products such as Knorr, expiry and manufacturing dates are crucial. UBL did not want products to get stuck in the distributor and retail points and Knorr soups to run o ut of its shelf life. Because if such situation arise, the overall image of the company could be a t stake. If, for example, people were to get sick having Knorr soups, it will hamper the company’s reputation. Knorr is distributed in major urban
areas of the country, mainly Dhaka and Chittagong and to some extent Sylhet, since sales are high in these regions. This is because the target customers are the urban people of Bangladesh. More off take means Knorr is promoted more in these areas. 6.4 Packaging
Packaging can play an important role in brand recognition in the shelf while consumers shop. It is the visible outline the consumer sees and uses. Knorr has to ensure that its packs are easy to find on the shelf
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and stands out from the competition. The pack graphics must reinforce and communicate the core proposition. The pack should also be effective in its use and should add to the product experience. 6.5 Price Price defines how expensive is a product, both on shelf and on consumer’s mind and does it offer value for
money. UBL must also identify how sensitive are consumers to changes in price. Three flavors of Knorr are priced at BDT 35 currently. The Knorr Thai soup is priced at BDT 40. However this pricing strategy of Knorr contradicts with the traditional marketing theory of market penetration. Traditionally market penetration is used by companies to enter an existing market with a new product by pricing it low to grab quick market share and infiltrate the market. Unilever offers premium brands in the market it operates. Although some of its brand target the lower tier segments, but it always has a premium brand in the market. So UBL did not set a lower price for Knorr to penetrate the market. Rather the idea was to position Knorr as a superior quality product than Maggi. A brand is a promise and UBL products promise to provide the best possible quality. And price is a reflection of a product’s quality. Unilever products are aspiration and are set in such a way that people desire to have
them.
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Chapter 7: Findings, Challenges & Recommendations 7.1 Findings & Challenges
Findings from quantitative analysis: 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) 16)
Only 1% of the sample consumes savory snacks daily. Almost 58% of the sample consumes savory snacks at least once a week. 60% of the consumers consumes savory snacks in home. Almost 90% of consumers consume soup either as a daily snack or a restaurant meal. Almost 100% of the sample have tasted Knorr soup before. However, only 37% knew which variant s/he t asted 50% people described Knorr soup to be “Bland” 50% of the sample noticed Knorr P romotions in POP Displays. Only 12% of the sample heard about Knorr soup from TV 62% of the sample prefers Maggi over Knorr. Almost 60% Think Maggi is tastier than Knorr. For Bangladeshi consumers, most important factors for Snacks consumption is the Taste and Pricing. Packaging is the least important factor. 15% of the consumers think Healthy Snacks are important to them. 60% Consumers like to try out new snacks 98% of the consumers purchases snacks impulsively. Almost 75% of the consumers like to enjoy snacks with friends and family.
Initial market research also revealed that Bangladeshi people like chicken corn soup, which prompted Knorr to launch the Sweet Corn Chicken soup. But after the launch, UBL realized that the taste glands of Bangladeshi consumers are mostly skewed towards “Thai” flavored soup (which is actually Tom Yum soup),
which is offered by major competitor Maggi. Also, some people find the taste of Knorr soups bland and somewhat tasteless. Knorr soup is prepared according to an international formulation thus are biased towards European taste/savory. People in Bangladesh like it spicy and have a completely different taste palate. Hence Knorr does not suit them. Another challenge is that, soup is a seasonal product in Bangladesh, as people prefer it during winter. Bangladesh is a warm country so consumption is not at its expected level yet – It’s too hot to have soup! The lack of awareness about Soup can be a big challenge as well. The idea of real chicken still did not register amongst the consumers of Bangladesh. It will obviously take some time to “trickle in” their minds. 7.2 Recommendations
From the results found from quantitative analysis, we can understand how important it will be for Knorr to promote the category first. There is a huge untapped market. UBL can introduce flavors which would suit the Bangladeshi consumers’ taste palates, e.g. Tom Yam or Thai soup. They can also introduce more variety
25
of soups such as Soupy Noodles (which gained popularity in India). Knorr can also launch new flavors which people want or currently buy from grey market, such as Chicken Delight or Cream of Chicken flavors. UBL can extend the savory category by introducing new products under Knorr, such as Noodles, Pasta, Kabab Meal Maker, etc. (which are available in other countries). Also in order to reduce rejection, they should try to actively communicate the Knorr essence of taste and naturalness to improve penetration and frequency. Knorr can renovate the core by improving front of pack reassurance, in-store activation and product quality upgrade (re-nature cues, clean label). They can also promote addition of fresh ingredients to existing products (real c hicken or vegetables).
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Chapter 8: Conclusion
The time is not yet ripe to decide whether Knorr has been a success story in Bangladesh or not. Bangladesh savory taste is changing. There are more variant cuisine available now and more options of tasting. Also in-home consumption is changing, e.g. fried chicken. Increasingly more people will become health conscious in the future, indicating that market is there for Knorr. So people’s taste palates will change, in which soups and other Knorr items will play a part. UBL definitely have the expertise and resources needed to make Knorr a leading food brand in Bangladesh. It might take some time, but if they utilize the resources and take proper steps to grab the opportunities that are out there in the market, they will definitely come out in the top in this category as well.
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References Brand History . (2004). Retrieved August 08, 2011, from Knorr Website: http://www.knorr.com/ (2009). Sustainable Development Overview 2009. Scanplus. Knorr Soup @7 . (2010). Retrieved August 14, 2011, from Facebook:
http://www.facebook.com/KnorrSoup?sk=info (2010). Unilever Annual Reports and Accounts 2010. St Ives Westerham Press Ltd. (2011). Retrieved August 10,
2011, from Unilever Food Solutions: http://www.unileverfoodsolutions.com/ (2011). Retrieved August 08, 2011, from Unilever Bangladesh Website: http://www.unilever.com.bd/ (2011). Retrieved August 14, 2011, from Unilever Global Website: http://www.unilever.com/ Best Brand Award 2010. (2011, May). Bangladesh Brand Forum , pp. 1, 5-6. Introduction to Unilever. (2011, March).
Retrieved from http://www.unilever.com/images/ir_Introduction_to_Unilever_tcm13-234373.pdf Knorr
South
Africa .
(2011).
Retrieved
August
14,
2011,
from
Unilever
South
Africa:
http://www.unilever.co.za/brands/foodbrands/knorr.aspx About Cookitup . (n.d.). Retrieved from CookitUp: http://www.cookitup.in/ Keller, K. (2008). Strategic Brand Management (Third ed.). New Delhi: Prentice Hall, Pearson Education. Knorr Canada . (n.d.). Retrieved from http://www.knorr.ca/en/default.aspx Kotler, P. (2003). Marketing Management (11th ed.). Upper Saddle River, New Jersey: Pearson Education, Inc. Kotler, P., &
Armstrong, G. (2008). Principles of Marketing (12th ed.). New Delhi: Prentice- Hall of India.
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Appendix
Quantitative Research Questionnaire
How frequently do you consume savory snacks (Noodles, Macaroni, Soup etc.)?
Everyday Two or Three times a week Once a week Not very often Never
Where do you normally consume savory snacks (Noodles, Macaroni, Soup etc.)?
At home At restaurants Roadside Carts If other, please specify: _________
Please rate the factors that you think is important while purchasing a packet of Noodles or Soup. (5= Most Important, 1= Least Important) 1
2
3
4
5
Great Taste Reasonable Price Highly Available High Nutrition Values Lucrative Packaging
Please state whether you agree or disagree with the statements below: Statements
Strongly Agree
I like to try out new snacks I know what snacks to buy when I go to store I like to make my own snacks instead of buying I like to enjoy snacks with friends or family I only consume snacks which are healthy for m e
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Agree
Neutral
Disagree
Strongly Disagree
For what purpose do you normally consume any kind of soup? (You can tick more than one option)
As an Evening Snack As a restaurant meal (eg: starter for Chinese) As a healthy meal (For patients) As a tummy-warmer (for Winter season) Other. Please specify _______________
Have you ever tasted Knorr soup before? Yes No
If yes, please describe the taste in one word: ___________ (eg: Salty, Bland, Spicy, Sour, Tasteless etc.)
Did you know which variant of Knorr you were tasting? Yes No
Where did you first hear about Knorr? TV Advertising A friend or a Relative Social Media On-store Displays
Do you currently consume any other soup brand right now? Yes No
If yes, Please specify the brand __________________
In comparison to Knorr, it is: (You can tick more than one option) Tastier Healthier More Available in the Market Better Priced
Demographic Profile:
Gender:
Male
/
Female
Age: 16-25 / 26-35 / 36-45 / 46 and over
Thank you for your time!
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Frequency Table
Consumption Frequency Cumulative Frequency Valid
Percent
Valid Percent
Percent
1
1
.8
.8
.8
2
26
20.3
20.3
21.1
3
49
38.3
38.3
59.4
4
40
31.3
31.3
90.6
5
12
9.4
9.4
100.0
128
100.0
100.0
Total
Consumption Location Cumulative Frequency Valid
Percent
Valid Percent
Percent
1
78
60.9
60.9
60.9
2
20
15.6
15.6
76.6
3
30
23.4
23.4
100.0
128
100.0
100.0
Total
31
Consumption Purpose Cumulative Frequency Valid
Percent
Valid Percent
Percent
1
48
37.5
37.5
37.5
2
80
62.5
62.5
100.0
128
100.0
100.0
Total
Variant Cumulative Frequency Valid
Percent
Valid Percent
Percent
N
80
62.5
62.5
62.5
Y
48
37.5
37.5
100.0
128
100.0
100.0
Total
First Hear Cumulative Frequency Valid
Percent
Valid Percent
Percent
1
16
12.5
12.5
12.5
2
16
12.5
12.5
25.0
3
32
25.0
25.0
50.0
4
64
50.0
50.0
100.0
128
100.0
100.0
Total
32
Other Soup Brand Cumulative Frequency Valid
Percent
Valid Percent
Percent
N
32
25.0
25.0
25.0
Y
96
75.0
75.0
100.0
128
100.0
100.0
Total
Brand Name Cumulative Frequency Valid Maggi Total
Percent
Valid Percent
Percent
48
37.5
37.5
37.5
80
62.5
62.5
100.0
128
100.0
100.0
33
Gender Cumulative Frequency Valid
Percent
Valid Percent
Percent
F
48
37.5
37.5
37.5
M
80
62.5
62.5
100.0
128
100.0
100.0
Total
Age Cumulative Frequency Valid
Percent
Valid Percent
Percent
1
96
75.0
75.0
75.0
2
32
25.0
25.0
100.0
128
100.0
100.0
Total
Taste Cumulative Frequency Valid
Percent
Valid Percent
Percent
Bad
16
12.5
12.5
12.5
Bland
64
50.0
50.0
62.5
Good
16
12.5
12.5
75.0
Spicy
16
12.5
12.5
87.5
Tasteless
16
12.5
12.5
100.0
128
100.0
100.0
Total
34
Pie Chart
35
36
37
