Pasig Catholic College College Department BSBA2015
Marketing 6 Marketing Research
Table of Contents
I. II. III. IV. V.
Objectives……………………………………………………………...3 Introduction………………………………………………………........4 Name and History……………………………………………………...4 Timeline of Logos and Slogans of SELECTA………………………...5 Company Overview………………………………………………........7 a. Company Industry…………………………………….....7 b. Target Market and Promotion…………………………...7 c. Major Competitors………………………………………8 d. Products……………………….……………………..…11 e. Core Products……….……………………………..…...13 f. Core Competency.………………………………..…….13 VI. Marketing Research in R&D and Promotion………………...……...14 VII. Selecta’s SWOT Analysis…………………………………….……..18 VIII. Team Recommendation……………………………………………..19 IX. Marketing Research Summary………………………………………21 X. Grading Sheet………………………………………………………..23
I.
Objectives a. To know Selecta development
by
its
timeline
history,
growth
and
b. To know how Selecta engage their market and competitors, and the leverage they have on their rich line of products
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c. To have a deeper understanding on Selecta’s marketing research in two fields: Promotion, and Research and Development d. To have an assessment and analysis of Selecta’s Strengths, Weaknesses, Opportunities, and Threats e. To be able to recommend a new promotional strategy of catering to a set of market, and summarize the content to see the overview of the entire marketing research for Selecta
II.
Introduction
Ice cream consumption usually peaks during the hot summer months. Demand, however, is also stimulated by festivities, be it town fiestas or birthday parties, making ice cream very much a part of every celebration. As such, consumption of ice cream remains significant even during the rainy season. Since it is strongly associated with joyful occasions, its consumption is also triggered whenever individuals desire to reward themselves as it is an easily accessible indulgence. Ice cream will continue to play a significant role in Filipino celebrations. It will remain a favorite treat amidst the country’s often hot 3
and humid climate, making every get-together more pleasant. The upgrade in purchases to more premium variants supports this stronger constant value growth. As the middle class expands, more consumers are likely to try out brands sold at higher price points which are perceived as tasting superior.
III.
Name and History
Selecta Dairy Products, Inc. (Selecta) is the ice cream unit of food and beverage of a widely diversified or variously composed Republic Flourmills (RFM) Corporation. It got its name from the Selecta Refreshment Parlor owned by Ramon Arce and his wife Dona Carmen, flocked not for its main American dishes but for its ice cream. In 1946, the parlor introduced a carabao milk-based ice cream, and thus Selecta ice cream was born. In 1990, the smalltime ice cream line brand was bought by the Concepcions of Corp. from the Arce family. Unilever Philippines, Inc., the parent of Unilever RFM Ice Cream, Inc., would cite the brand’s foundation year as 1948. It was far behind its competitors back then: Presto, Sorbetero, and Coney Island. Unilever RFM Ice Cream, Inc. is the leading player in ice cream from 2013 up to present with a value share of 49%. Helping the company sustain its lead was its aggressive use of advertising and various promotional activities combined with product development efforts directed towards addressing the needs of the mass market.
Timeline of Logo and Slogans of Selecta
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Selecta’s Old Logo
When RFM acquired Selecta from the Arce family, it used this classical logo. Selecta used its classical logo, later used by its sister milk division founded in 1997.
Heartbrand logos 1998-2003 Selecta 1998
In 1998, after RFM partnered with Unilever to strengthen Selecta's market share in the ice cream segment of the Philippines, Selecta was welcomed into the Unilever Heartbrand product line of ice cream, and gained its own later.
Early 2003-Mid-2003
in
When Unilever updated the Heartbrand logo, Selecta used this logo until mid-2003, consisting of the newly updated Heartbrand logo. This logo was later officially abandoned 2006.
Mid-2003-Present 5
In
this
Mid-2003, Selecta officially gave way to the newly refreshed Selecta logo, consisting of the newly updated Heartbrand logo. The logo made the Heartbrand symbol more iconic in the Philippines. This logo is currently used to day.
Non-Heartbrand logo Present Though
Blue Selecta Logo Selecta's Heartbrand logo is its primary logo, Selecta also uses another. The logo consists of the classical Selecta text placed on a blue heart. However, the milk business of Selecta only uses this logo. Selecta's milk business started using the logo in 2011.
1990-1998: Make Your Choice Selecta. You Simply Must. 1998-2006: Happiness From The Heart 2006-2009: Created With Passion 2007-2009: Mas Masarap Talaga ‘Pag May Selecta. (It’s Really More Delicious when there’s Selecta.) 2009-present: Sarap Ng Weekend! (Love The Weekends!) 2010-2012: Number One Ice Cream ng Bayan/ Selecta, Number One! 2012-present: Share Happy IV. Company Overview
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a. Company Industry
Selecta Ice Cream belongs in the frozen novelty delicacies. The ice cream industry caters to a flavor conscious market. Although some are brand-loyal, most consumers look into available flavors. Those people craving ice cream, when the flavor they like is not available, easily switch to another flavor and/or brand just to satisfy their craving. b. Target Market and Promotion
Television was used as the primary medium in reaching the target markets backed up by radio, print, merchandising and cinema. Campaigns included Chocollection, Classic Selection, Swirls and Twirls, etc. The ice cream industry caters to a flavor-conscious market. While some are brand loyal, most give importance in the quality of the flavor and are usually adherents to their personal flavor cravings regardless of brand. The market for ice cream in the Philippines increased at an annual growth rate of 3.6% between 2004 and 2009. The take-home ice cream category led the ice cream market in the Philippines, accounting for a share of 63.6%. Example of Promotional Setting
Its bulk dairy ice cream brand, Selecta 3-in-1+1 Supreme, for instance, was unique as it provided four different flavors in one package. Promoted as ideal for birthday parties, the product sat well with the demands of consumers for variety without having to spend too much. Selecta Creations Ice Cream Stick, meanwhile, made its bulk dairy ice cream flavors available in convenient single portions servings for consumers with a limited budget.
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c. Major Competitors
Magnolia– The pioneer ice cream brand in terms of flavor, quality control, variety, technology and distribution produced by the merger of SMC and Nestle. It introduced the Flavor of the Month series that provided a huge variety of ice cream flavors to the consumer, with projected volumes of FoM ice cream sold reaching over 28 million gallons. It pioneered the introduction of tropical fruit flavors.
Presto– this brand claims value for money, as part of the corporate philosophy of the Gokongweis, owners of JG summit corp. which is to make available value-for-money items for all its consumer-branded products, and has positioned its prices lower than Magnolia & Selecta. Presto excels in the frozen novelties market, as was demonstrated in their introduction of Tivoli bars, the first ice cream bar in the Philippines, a phenomenal success that had competitors challenge it with their own versions of ice cream bars.
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Arce Dairy – This ice cream brand was started in January 1995 and immediately got hold of a 5% market share. Its trademark was the use of carabao milk as base. Only the expensive ice cream (super deluxe and super special) of Arce contains carabao milk, and are priced at higher than the rates of the competition, showing that Arce’s main strength is its appeal to the AB market where its products cost P3-5 more than its competitors’ products, and as its regular ice cream products are priced lower than its competitors by P3-5 which indicates its attempt to appeal to the CD market’s tendency to want every peso to count.
Coney Island – 1976 saw the entry of Coney Island in the local ice cream market. It introduced a new standard of creaminess thanks to its 9
products’ high milk fat content, setting a standard for flavor richness back then.
Foreign Brands – Foreign include Haagen-Dazs, Dreyer’s Grand Ice Cream and Baskin-Robbins. Dreyers was the first to penetrate the local market. Haagen-Dazs was the latest brand to come in. owners of these brands claimed they are not here to compete, but only to expand the ice cream market with superior products. These brands belong to the super premium category and cater to the A market.
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d. Products
Selecta ice cream comes in different flavors and variants. There are several variants: the Gold, Selecta Creations, Moo, Selecta Supreme, Selecta Classic, Ice Cream Cones (Cornetto & Moo Cone), and SK Ice Cream Stick.
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Also, with its partnership with Magnum, and Hershey’s and Reese, it has expanded its offered flavors by bringing delicious and exclusive international brands infused with the local brand Selecta Ice Cream.
Selecta also has its own product of milk freshness: Selecta Fortified. It was founded in 1997 and has developed its own distinctive logo in 2006.
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e. Core Product Selecta was first known for their ice cream even when the Arce family also offered American dishes. Through the years, the ice cream line has become rich and branched out different variants. This has become Selecta’s Core Product. All their products use fresh carabao’s milk from Bulacan, Nueva Ecija, and Pampanga were used in the production of Selecta Dairy products. The Company ensured that the local fruits met quality standards, otherwise Selecta sourced fruits abroad for its variants that contain fruits such as halo-halo and creations. Selecta Ice Cream has been serving and catering markets Upper C, B and A with its retail items such as Selecta Creations and Cornetto, pint and gallons, and its tie-up with Magnum, Hershey’s and Reese to cater B and A Market.
f. Core Competency RFM relaunched Selecta to target the A and B and upper C markets. With strict adherence to quality and RFM’s corporate philosophy, “to give nothing less than the consumer’s satisfaction and his money’s worth --Selecta Dairy Products Inc. came out with its success formula: a winning combination of a high quality product, marketing innovation, modern production technology and a strong distribution network.
Selecta attributed its success to its management focus on upgrading product quality, providing logistics support, and giving proper marketing for the product to maximize its potential. It packaged and 13
marketed ice cream in a manner that a consumer feels regarded for buying the product. Selecta capitalized on understanding the Filipino consumers, making this activity the center of all the work ---from manufacturing to marketing.
V.
Marketing Research in Research and Development and Promotion
With economic recovery far from guaranteed, are consumers cutting back on impulse and indulgence food items like ice cream? Selecta’s products are considered to be giants if not leaders in the ice cream industry. Its key promotion strategies such as various tie-ups and advertisements have established household brand recall, although the nature of the ice cream market is largely based on flavor and not on brand. Selecta should then accompany its new distribution strategy with a new ice cream promo.
RFM re-launched Selecta strictly adhering to high standards of quality, utilizing innovative marketing strategies, using modern production technology, and using a strong distribution network. Since its challenge to Magnolia’s domination of the bulk ice cream market in 1993, its share has expanded rapidly, where it captured 46% of the Metro Manila ice cream market and an average of 39% market share nationwide. Selecta attributed its success to its management focus on upgrading product quality, providing logistics support, and giving proper 14
marketing for the product to maximize its potential. It packaged and marketed ice cream in a manner that a consumer feels regarded for buying the product. Selecta capitalized on understanding the Filipino consumers, making this activity the center of all the work ---from manufacturing to marketing.
According to marketing research on consumer behavior in frozen novelties, 80 percent of Filipino consumers bought ice cream on impulse (they bought only upon passing an ice cream scooping station, but without intention to buy at first); 98 percent ate ice cream in the comfort of their home; and 70 percent of the time, ice cream was an afternoon snack. A report on consumer data for ice cream indicates its total market size is about Php6.5B in 2010, with 25% of Filipinos buying ice cream thrice a year.
Leading brand Selecta was able to convince consumers to indulge in ice cream through the affordable price of its Cornetto brand, whilst its bulk dairy ice cream variant is positioned to promote family weekend 15
bonding. At the same time, it also successfully launched the premium brand Magnum.
Also, as part of their expansion, promotion, and development, Selecta has launched their very own café which is now known locally and internationally catering A, and Upper and Lower B markets. It is known as MAGNUM Café, a high-end café that offers an indulgence to Selecta’s high-end international line Magnum Ice Cream. The Café offers different selection and recipes of Magnum and serves beverages and pastries as well.
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Unilever/RFM’s joint-venture between multinational Unilever and local company RFM Corp, maintains its lead in ice cream in the local market. The company’s share is expected to reach 49% in 2013, as it continued to push its Selecta variants both in impulse and take home ice cream. During 2012 and 2013 the company heavily promoted a new use for its Selecta Super Thick Ice Cream. Unilever RFM Ice Cream encouraged consumers to make ice cream cake using this bulk dairy ice cream variant. The company’s aggressive advertising campaign generated good interest amongst middle-income consumers, who excitedly tried to make their own ice cream cake. Selecta went into the production of bulk ice cream and frozen novelties. Bulk ice cream, with around 30 flavors ranging from avocado, to ube constituted about 80 percent of the Company’s output. The Company’s line included Classic, Supreme, Indulgence, and Hershey’s Collection. A fifth category, Regional Flavors, was an innovative venture into the production of indigenous fruit flavors. The Company came up with frozen novelties and more than a dozen type of pops, cones, and sundaes. Frozen novelties constituted the remaining 20% of the company’s output.
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VI.
Selecta SWOT Analysis -
Strengths
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limitation of their distribution network only to key urban areas
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Improvement of distribution systems among companies remain quantitative through increased numbers of freezers provided to distribution channels Selecta could introduce a pioneer in ice cream delivery system so as to save the consumers the hassle and inconvenience of ice cream product purchase Bread companies like Gardenia offer promotion through public demo. They look
Weaknesses
Opportunities
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Threats
Selecta is currently the leader in overall market shares Does well in the bulk ice cream category, with 80% of its total ice cream output composing of bulk ice cream has high-quality product standards, innovative marketing and promotion strategies, modern production technology, and strong distribution network at par with major competition They conduct their research and development in their very own facility in the plant and have hired food technicians to conduct research
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Common in all competitors are their intentions to greatly expand their distribution capabilities (Arce, Presto, Magnolia) Smaller competitors are looking into getting at par with the production
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VII.
capabilities of the main competitors Flavors and promotions of big companies are being imitated by small competitors
Team Recommendation
Given that Selecta already holds a dominant position in the ice cream market, and that their production capabilities, technologies, and distribution systems are comfortably on par with the competition, Selecta should look into countering efforts of the competition to gain better footing in any of these aspects. Common in all competitors is their aim to expand and develop their distribution systems to make their products more accessible. It is therefore proposed for Selecta to look into further innovate its distribution system to ensure their position in the market.
On the other hand, competing brand Nestlé made products more affordable and accessible to middle- and lower-income consumers through the launch of SKUs which were priced lower than P100 per tub. These efforts came to fruition in 2013, as ice cream consumption was increasingly becoming weekly indulgence, instead of being a luxury reserved only for special occasions. Value proposition is an important criterion for dairy food purchases among middle-class that constitute the major share of total consumers. Given the positive trends in the Philippines economic growth scenario, the Selecta team has outlined some of the alternative strategies that the company could pursue: Sell more Selecta products. This strategy seeks to increase sales from Selecta products in its current markets. One component of this strategy is increasing the penetration of freezers to smaller outlets. It may involve increasing promotional efforts or incentives to get more consumers to buy more Selecta ice cream.
Develop more Selecta products: This strategy will increase sales by developing new or improved products for its current markets. 19
Possibilities include developing more ice cream flavors and entering the lucrative frozen novelty segment.
Enter new markets. The strategy seeks to increase sales by taking its existing products to new markets. This means expanding its distribution networks by entering more cities and towns where it is absent or even expands to the international market where there are large Filipino populations.
Enter New Business Leveraging the Current Refrigeration Facilities. This strategy will increase sales by developing new markets where Selecta’s distinctive competencies can be exploited. Possibilities include marketing other food products that can use the freezer facilities of Selecta.
The proposed marketing campaign revolves around a new distribution channel: the Selecta “Delight at your Doors” Ice-Cream delivery system.
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A motorcycle delivery network is proposed to be set-up in all of Selecta’s 12 major strategic depots (Metro Manila, Cabuyao, San Fernando, Dagupan, Naga, Cebu, Bacolod, Iloilo, Tacloban, Cagayan de Oro, Davao and Zamboanga) that brings Bulk Ice Cream and/or Frozen Novelties right at the buyer’s doorstep in a matter of minutes. Padyak versions (like those used in peddling frozen 20
novelties) can be used depending on the distance of the customer from the delivery stations.
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Bulk Ice cream and frozen novelty deliveries will be having a minimum quantity limit to ensure no net losses from fuel usage. Prices on ice cream bestsellers will have discounts in delivery, and some “Ice cream packages” will be provided for select items, like a “buy 1 gallon bulk ice cream, get 5 novelties free” deal or so to also promote their frozen novelties. And as in most delivery systems, patrons can avail of sulit cards that enables you to avail of free ice cream products for every purchase of certain ice cream products.
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Some new ice cream flavors or products will be introduced exclusively through delivery in its introductory stages. In the launching of the delivery system, a new ice cream product will be accompanyingly released with a special discount on it to encourage consumers to avail of it through delivery.
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Poster ads will be distributed to all distribution channels (groceries, supermarkets, convenience stores, etc.) for posting. A promotions campaign, “Delight at your Doorsteps!” will be implemented, where teams of promoters will be scouring neighbourhoods of B, C and D market classes delivering free ice cream samples of the new ice cream product that will be released through the delivery system’s launch along with brochures that contain the flavor/product selections and delivery prices and other product promos.
VIII. Summary
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Grading Sheet Committee
Group Grade
Individual Grade
Materials
Champion Alvin John Magno
PowerPoint Presentation
Co-Champion Christelle Manansala
CD Material
Members Carl Pagkalinawan Jolin Pasco Jerome Mendoza
Hard Copy Material
Grade
Professor’s Comment/s:
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