Internship Report on Marketing Mix Analyses of

Butterfly Markating Limited

Subject: Marketing Topic: Internship Report

 Executive summary:

Home appliance  market is the world’s largest consumer goods market and
Butterfly Marketing Ltd. is one of the major organizations in home appliance in
Bangladesh Most of the companies are moving globally to sound growth rate.
Butterfly is not exception from this criterion. The brand LG one of the major
international brands possessed by Butterfly is assisting to get moving globally.
The basic intent of the report is to present the performance LG micro wave oven
of Butterfly and to enhance the value of brand and product in a very complex
competitive environment. The report discusses the competitive market analysis
of LG microwave oven. Consumer perception of a number of brand alternative,
nature of Distribution channel and their activities, advertising and promotional
activities, market share and growth. The outcomes of the analysis are shown in
brief. Rivalry is likely to increase; its Butterfly’s strategic move to global market
has been successful. The life cycle stages of the products of Butterfly are mostly
in mature stage. All the big companies in the market are acquiring small
companies and as the product range-is-quite large they enjoy Economies of
Scale. Customers are very brand loyal. Some rivals have good distribution
channels. As buyers’ preferences are changing it is inducing the industry to
change. An intense competition is going on in the market of home appliance
between the brand and non-brand product. The increasing demand for non-brand
product is due to lower price rather than others. Customers are not very well-
known about LG/Butterfly product like due to the drawback of advertisement.
Advertisement is another key issue of sales growth through which Konka. Nova
and some other non-brand are doing very well in sales. Konka and Walton are
most demanding in the gray market because of lower price, nice getup and for
guarantor period. The demand of Microwave oven is increasing day by day which
is a positive sign for LG.

BACKGROUND OF THE REPORT:

This is the report on internship program of MBA supervised by Mirza Mohammad
Didarul Alam, lecturer of StamfordUniversity. The intern was placed in LG
Butterfly Marketing Company Limited. for the three month internship to have a
practical snatch over the organization activities. The topic of the report is
proposed “The competitive market analysis of microwave oven. Basically MBA
Program is designed to reduce the gap between the theoretical knowledge and
practical knowledge. I am very glad for getting this opportunity to accomplish my
practical orientation at Butterfly Marketing Company.

OBJECTIVES OF THE REPORT:

The specific objective of the study is given below.

1.      To understand the marketing functions of the company

2.      To find out the efficiency and effectiveness of existing Marketing system.

3.      To analyze the competitive market share of Microwave oven.

4.      To identify the marketing problems faced by Butterfly Marketing Limited in

case of Microwave oven.

5.      To evaluate the present performance of LG Butterfly in microwave oven in

comparison with other major competitors.

METHODOLOGY:

An information plan has been structured to collect the relevant data consistent
with the preparation of the report to conduct the study, primary and secondary
data were reviewed thoroughly in an organized manner. This study is based on
secondary data collected from Head office, showrooms, open market, and
market survey on questionnaire basis on customers, showroom managers,
corporate level and gray market. Newspapers and other printed materials were
also used for collecting relevant data.

LIMITATIONS OF THE STUDY:

Several limitations remain regarding the coverage and comparability of data.

1. Data collection procedure was not so easy within limited time.

2. All users were not cooperating with me.
3. In case of data collection from competitors, every place was not accessible.
4. In certain critical areas, reliable data are extremely scarce.
 5. All showroom managers were not cooperative in providing data.
6. Some data collected from one source contradicted with other data and actual
data findings arise confusion. As a result, actual situation was difficult to assess.

  About company’s strategic task and structure:

1. Historical background of LG Butterfly.

2. Mission, Goals, and objective.
3. Management of Butterfly.
4. Structure of the company.
5. Description of the tasks performed by each division
6. SWOT Analysis of LG Microwave oven

Historical Background of LG Butterfly:

Butterfly Marketing Limited is a leading marketing company in the field of

electronics home appliances in Bangladesh. Since 1987 Butterfly marketing Ltd.
has been continuously making progress surfacing newer grounds and
surmounting higher goals. They started their business with only 3 showrooms but
now they have 136 showrooms and 80 distributors in Bangladesh.  Butterfly
marketing company limited is providing customers with high technology involved
electronic home appliances with cash or hire purchase. For long time, business
collaboration with LG electronics Inc in 1997. PeopleRepublic of Korea, Hansong
Enterprise Ltd., PeoplesRepublic of China Butterfly Marketing Company Ltd. has
achieved reputation through offering the quality product.

The origin of Butterfly is in China. In Bangladesh, the company was founded in

12th July 1987, to produce electronic consumer products. It merged with several
companies (LG, Kelon ) and added several products in the product line. The
establishment of LG was in South Korea in 1958 as Gold star. In November
1959, Korea’s first Radio produced. Then in November 1962 first Telephone set
produced. Korea’s   first Refrigerator was Produced at January, 1965, and 1966,
first black & white Television was produced. In March 1968, Korea’s first Air
conditioner was produced. Korea’s first overseas branch was established in US
in September, 1968, In 1978, sales subsidiary was established in USA. The
company changed its name from Gold star to LG electronics Inc. in Marsh 1995,
The company LG vision was declared in  July 1999 In 75% of its sales (Plasma
display ) 60” TV is launched. LG Electronics makes over 75% of its sales
overseas. Establishing facilities in 27 countries for manufacturing, sales &
marketing, logistics, R & D, design, and customer services, LG has put together
a global network of 54 subsidiaries and offices with 50000 global employees. In
Butterfly Marketing Ltd, the numbers of employees are about twelve hundred.
BUTTERFLY AT A GLANCE

Management Office : Butterfly Marketing Limited71, Motijhee C/A, Dhaka-

1000Bangladesh.

E-mail:[email protected]
Business Operation Started in : 1987
Bangladesh
No. of Employees when Started : Management-03 & Marketing-03
Present No. of Business : 90
Present No. of Employees : About 1200
ProductRange : Air ConditionerRefrigeratorDeep Freezer

CD Music System

DVD Player

Microwave Oven

Rice Cooker

Color Television

Washing Machine

Sewing Machine
Business Collaboration with : L.G Electronics Inc.PeoplesRepublic of
KoreaHansong Enterprises Ltd.

Nanjing-210029

PeoplesRepublic of China
Business System : Cash & Hire Purchase System

STRATEGIC TASK ANALYSIS:

 Mission:

Butterfly will become the acknowledged leader in electronic home appliance

industry to provide quality products into reachable price. Leadership will be
achieved by establishing the industry standards of excellence for quality of
service and by maintaining the broad loyalty relative to our service commitment.

Achievement of Mission requires:

1. Absolute dedication to understanding and fulfilling our customers need with the
appropriate mix of service, reliability, products and price for each customer.
2. A countrywide showroom and service network for customer providing with
reputed brands, products with excellent useful characteristics with different
aspects for customer.
3. Allocation of resources consistent with the recognition that we are in number one
position in countrywide business.
4. An environment that rewards achievement, enthusiasm and team spirit and
which offers each person in Butterfly with superior opportunities for personal
development and growth.
5. A professional organization able to maintain initiative and local decision making
while working together within a centrally managed network.

The evolution of our business in providing new products, new services, markets
or products will be completely driven by our single-minded commitment to
anticipating and meeting changing needs of our customer.

 Goal:

            To provide best quality products for the valued customers by introducing
latest

technology driven products and expanding service network.

Objective:

1. To create and continuous upgrading the loyalty of the clients and their
recommendation of our people through: quality products and good advice,
dependable service and delivery and efficient marketing effort.
2. To establish a strong and distinguished corporate portfolio and image by
retaining the tradition of the world’s greatest product line up.
3. To continuous upgrading and monitoring and evaluating of total quality
management (TQM) approach to our all marketing and distribution system by
making dynamic, honest and industrious showroom and dealer personal, a
integrated part of the family.
 4. To reach the pinnacle of the market in Brand Category combined with customer
segmentation and strengthen our position there.
5. Develop an integrated human resource policy and implement its consistent use
through the organizational training, authority commensurate with responsibility
and recognition for performance.
6. To ensure that every member of the management team will be a person of top
capability.
7. Introduce methods to plan for the provision of required caliber and quantity if
staff.
8. Assist the organization in becoming more customers aware and responsive in
changing needs of external marketing environment.
9. Define and encourage implementation of an improved communications culture
throughout the organization.
10. Faster a leadership style throughout the organization which encourages the
respect for individuals, teamwork and close identification with customers.

 Long-range objective:

The long-term objective is to gain leadership globally in the home appliance

industry.

 Short term objective:

Their short-range objective is profit maximization through customer satisfaction

by providing quality product and increase market share in electronics market.

 Strategic Intent:

To be the global leader in the appliance industry.

Corporate strategy:

          To earn more than average profit by exceeding customer expectation.

Business strategy:

Adding product features to different markets and thus gain substantial market

share.

Operational strategy:
To promote corporate image, to establish good production facilities and to setup
a

good distribution channel.

Organizational Structure of Butterfly:

Authority controls all over the company along with the supervision of three
directors (finance, Marketing and Technical). The segmented departments are
doing activities under the supervision of both head of the department and the
authority. The summaries of departmental activities are discussed below:

Administration Department:

The major activities of administration department are as follows:

 Staff recruitment, staffing, staff management (transfer, promotion ) and staff

controlling.

 Administrative activities regulating, setting up workings of various subordinate

ept. and monitoring employees.

 Some additional activities benefiting the company.

Accounts Department:

This dept. basically does the following activities:

 Preparing monthly account’s report

 Preparing and financing report
 LC import related banking activities
 Central accounting process.

 Credit Department; The following activities are done be the department:

 Hire purchase activities.

 Monitoring and preparing credit functions of field officers
 Checking out and preparing arrear collection report of showroom managers
 Monitoring total reporting
    Checking out the latest position of hire account, monthly running amount
(hire).  Through out the latest position of hire account.

 Observing any type of discrepancy gap and performance evaluation of field

officers.

     Supervising branch level data (Hire Agreement ) through area managers and
district managers

 Marketing Department; This department does the following activities mainly:

 Market survey
 Sales promotional activities
 Advertisement
 Market research
 Competitor analysis
 Additional activities like arrangement of foreign trip or incentive bonus for
employees etc.

Audit Department: The main task of the department is auditing. It does it as

follows:

Visiting different branch and auditing level of physical cash and inventory.

 Auditing showroom activities whether they are doing properly or not.

Computer Department:  The department is doing the following activities:

    Data entry of (Accounts) both weekly and monthly report.

    Data entry and recording file of cash and hire sales and collection from hire
sales.

 Inventory Department:   The following activities are done by the department:

  Management of inventory.

  Recording total amount of purchase of product monthly.

 Preparing record of total sales unit of products weekly and monthly.

 Logistic Department;  The activities of the department are no less significant

which are as follows:
 Any type of product distribution.

 Product support and logistic support.

 Controlling and management of store.

 Service Department: The department does the following thins:

 Management of after sales service

 Product service is done by expertise like service engineer and B.S.C engineer.
 Only own product servicing is done
o After sale service is done at free of cost for one year.

Showroom Activities: Showroom is the grass root level of Butterfly Marketing

Ltd and serving the customers directly.

There are more than 136 showrooms all over the country. Method of selling is in
both cash and hire sales. Various forms are used in selling which are as follows:

Forms used for Cash Sales:

(a)    F304 ( Final Receipt General), LPR ( without VAT)

(b)    F364 (Cash Receipt with VAT)

Forms used for Hire Sale:

(a)       Hirer Proposal Form

(b)      Guarantor’ Form

(c)       Agreement Form (F315)

(d)  Salesman’s Certificate (F317)

(e) Hirer’s Down- payment Receipt (F365)

(f) Installment / Collection Receipt (F314)

Major consideration in Hire Sales:

(a)        Hirer’s full name, Parent’s name address, occupation no. of years
involved in the job.
(b)        Students or blow 18 years aged can’t be a hirer.

(c)        Two guarantor who are ‘not related’ to Hirer and also have enough
financial strength to compensate later if hirer defaults.

(d)       Hirer will have to make four signatures in the agreement form and all
signature in the agreement form and all signatures should at the same language
at the same manner.

(e)       At first, Down Payment + 2 installments will be taken including VAT if any.

(f)       for Police, BDR, Army ID No. is compulsory.

(g)      Hirer can not hire more than one product at a time.

(h)      Service change of collecting installment will be within 10 kilo distance

Tk.20 and for every next I kilo Tk. 3.

(i)        there should not be any amendment using fluid or mutilation of the
agreement form.

(j)        the hirer will pay installment within 7 th day of each month. Otherwise will
be fined @ Tk.25 form 8 to 20th of that month.

Other Issues related to Hire Sales

(a)       Revert:  If hirer fails to pay installment, then the product is taken return to
the showroom back.

(b)      Reverse: The reverted product returned to the previous hirer if he pays

arear or Sale to another person.

(c)       Sale cancel: If any hirer surrenders the product who is not capable of

paying installment, the sale is then cancelled. In this case, change of Tk. 1000 for
use of each 1 month will be deducted from hire value and the rest amount will be
refunded.

(d)      Delinquent list: The installments due for collection in the current month.

Forms used for reporting:

(a)       Weekly Cash Sale Report (F320): Cash Receipt & Disbursement of
Salary. Bulk Sales Commission & Incentive bonus are described here. The
balance goes to remittance sheet.
(b)      Weekly Hire Sale Report ( F321): It includes collecting Bonus (if 100%
collection – 4% bonus otherwise not), Installment collection data from collection
sheet (F322), Down Payment with or without VAT. Stock of Hire agreement.

(c)       Remittance Sheet (F312) : Balance from F320 & F 321, method of
remittance transfer (DD, PO etc) in details to the Head Office.

(d)      Monthly Reporting. Summary of Month’s cash & hire sales and other
relevant data.

Discount Method:

(a)       If hirer makes full payments within two months, then he will get the
product at cash price.

(b)      If hirer makes full payment at 3rd month, he will have to pay cash price + a
lump sum amount (of course the sum will be less than hire price).

(c)       If hirer makes payment at 4th to 10th month, he will get discount at a

chronological down percentage manner.

 Description of the tasks performed by each division:

Home appliance  market is the world’s largest consumer goods market and
Butterfly Marketing Ltd. is one of the major organizations in home appliance in
Bangladesh Most of the companies are moving globally to sound growth rate.
Butterfly is not exception from this criterion. The brand LG one of the major
international brands possessed by Butterfly is assisting to get moving globally.

The basic intent of the report is to present the performance LG micro wave oven
of Butterfly and to enhance the value of brand and product in a very complex
competitive environment. The report discusses the competitive market analysis
of LG microwave oven. Consumer perception of a number of brand alternative,
nature of Distribution channel and their activities, advertising and promotional
activities, market share and growth. The outcomes of the analysis are shown in
brief.

1. Rivalry is likely to increase; its Butterfly’s strategic move to global market has
been successful.
2. The life cycle stages of the products of Butterfly are mostly in mature stage.
3. All the big companies in the market are acquiring small companies and as the
product range-is-quite large they enjoy Economies of Scale.
4. Customers are very brand loyal
 5. Some rivals have good distribution channels
6. As buyers’ preferences are changing it is inducing the industry to change.
7. An intense competition is going on in the market of home appliance between the
brand and non-brand product.
8. The increasing demand for non-brand product is due to lower price rather than
others.
9. Customers are not very well-known about LG/Butterfly product like due to the
drawback of advertisement.
10. Advertisement, another key issue of sales growth through which Konka. Nova
and some other non-brand are doing very well in sales.
11. Konka and Walton are most demanding in the gray market because of lower
price, nice getup and for guarantor period.
12. The demand of Microwave oven is increasing day by day which is a positive sign
for LG.
13. Price is the first choice of the customer for purchasing Microwave oven in the
gray market but brand loyalty and quality are not ignorable.

SWOT Analysis of LG Microwave oven:

            Strength

 Efficient management
 good distribution channel
 Long experience in this industry and good learning curve.
 Reputation as a global company Environment friendly products
 Wide distribution capability
 Brand loyal customers
 Brand image of LG
 Easy access to capital investments
 Economies of scale due to standardized product
 Structured geographic network.
 Two sales category higher purchases system or cash.

Weakness

 Weak marketing strategy.

 Lack of strong marketing network rather than competitors.
 Lower frequency in Advertisement in electronic media.
 Lack of proper decoration of showrooms.
 So high price than china base product. (Microwave oven)
 No warranty or Guaranty for Microwave oven.
Opportunity :

 Butterfly has very positive corporate image

 Proper utilization of hire sales system can flourish the sales growth
 New products developed through.
 Small and local competitors are decreasing
 Changes in people’s life style, enhancement of purchasing power and changes in
social values.

Threat

 A shift in buyer needs and tastes away from the industry’s product
 Adverse demographic changes
 As opportunities are increasing some Korean companies may enter the market
as they already have similar products microwave oven. (Superaristion)
 The frequency of advertisement is increasing by the competitors rather than L.G.
 Day by day inter new product in Bangladesh which price is so low. (China
product)

Competitive Market analyses of microwave oven

1. Marketing strategy& marketing mix of LG Butterfly.

2. Product Analyses(LG Microwave oven)
3. Consumer Analyses of LG microwave oven.
4. Promotional activities of LG Butterfly.
5. Distribution and channel management of LG Butterfly.
6. Price analyses of LG microwave oven.

Marketing Strategy & Marketing Mix

Marketing Mix

This is a traditional approach to marketing planning which is based on the four

Ps:

Product policy:

Product is, in fact, the range of the products (goods or services) that the
organization offers to the marketplace. Decisions have to be made about
quantities, timing, product variations, associated services, quality, style and even
the packaging and branding.
Price policy:

Price is a vitally important decision area because although it is a promotional tool

in many respects,

it is the main source of income to the organization. If prices are lowered for
promotional purposes, the case flow within the company, and its long-term
profitability, could be seriously affected. As with products, there is normally a
range of prices. These can vary according to the quantities bought, the
importance of the customer, and the market segment. pricing can be long-term
and short-term. pricing can involve discounts, special offers, allowances, credit,
and ‘trade-ins’. It is vitally important to get price decisions right.

Place policy:

A business when planning its marketing will ask a number of questions relating to
place i.e. ‘through which outlets should we sell the product? How do we
physically move the product to these chosen outlets? How far a field do we wish
to operate (locally, nationally, or internationally)? Place, or distribution policy, is a
massive, complex decision area.

The Marketing mix gives a plan by which to operate to influence and satisfy the
buyer/customers. The four Ps approach is not perfect, and is certainly not
intended to cover all the marketing activities, e.g. Marketing research, research,
of course, is the provider of information for the decisions in all of the four P areas.

Butterfly’s Marketing Mix:

Product Mix Distribution Mix Communication

Mix
Product line    PhysicaldistributionSupplier DistributionchannelDirect AdvertisingSales
rangeDesign cataloguesField sales
conceptColor Stock distributors force
appeal

Handling Trading public relation

Style
intention Direct relation
Storage block
Package Direct marketing
Transportation
proposal
Warehousing Telephone sales
brand name
force(brand
 Price image)
structure
Merchandising
Service
function

Waranty
offer

Incentives Mix

Money

Off(Discount

Competitions

Sales promotion

 Product analysis:

A product may be anything that can be offered to a market for attention,

acquisition, use, or consumption that might satisfy a want or need. It includes
physical objects, services, persons, places, organizations, and ideas.

Product classifications

Marketers divide products and services into two broad classes based on the
types of consumers that use them-consumer products and industrial products.

(a) Consumer products

Consumer products are those that the customer usually buys frequently,
immediately, and with a minimum of comparison and buying effort. These
products differ in the ways consumers buy them and how they are marketed.

Table 6.1 Marketing considerations for consumer products

Types of Consumer product

Marketing Conveniences Shopping Specially Unsought

 considerations

Customer buying Frequent Less frequent Strong brand Little product

behavior purchase, little purchase, much preference and awareness,
planning, little planning and loyalty, special knowledge (or if
comparison or shopping effort, purchase effort, aware, little or
shopping effort, comparison of little comparison even negative
low customer brands on price, of brands, low interest)
involvement quality, style price sensitivity

Price Low price Higher price High price Varies

Distribution Widespread Selective Exclusive Varies

distribution, distribution in distribution in only
convenient fewer outlets one or a few
locations outlets per market
area

Promotion Mass promotion Advertising and More carefully Aggressive

by the producer personal selling targeted advertising and
by both producer promotion by both personal selling
and resellers producer and by producer and
reseller reseller

(b) Industrial product

Products are those bought by individuals and organizations for further processing
or for use in conducting a business.

According the above definitions, Microwave oven should be categorized as a

consumer product. As a shopping product, they are less frequently purchased
consumer products that customers compare carefully on suitability, quality, price,
and style. They spend much time and effort in gathering information and making
comparison. They buyers see homogeneous shopping products, such as major
appliances, as similar in quality but different enough in price to justify shopping
comparisons.

Terms & conditions for Microwave oven-Warranty

Butterfly Marketing Limited guarantees to the customer mentioned as per the

details of the unit given for a period of twelve (12) month, commencing from the
date of purchase, the repair, if so required at the sole discretion of the company,
free of charge any part of microwave oven, provided the company is fully
satisfied in its sole discretion about these defects and further provided the
mentioned unit is deemed to be still in the possession of and used by the
purchaser mentioned.

Types of Microwave oven:

There are three types of microwave oven in LG Butterfly.

1. Grill microwave oven

2. Convection microwave oven

3. Electric oven

Different model and price of LG microwave oven.

Brand name Types Model Size (Liter) Price Sale

system
LG Grill 604A 28 13490 Cash &
Installment
LG Grill 5644B 27 13390 Cash &
Installment
LG Convection 808WAR 30 15990 Cash &
Installment
LG Convection 767W 28 14990 Cash &
Installment
LG Convection 7645B 30 19990 Cash &
Installment
BUTTERFLY Convection 900ESL30R 28 10990 Cash &
Installment

After sale service:

The department does the following thins:

 Management of after sales service

 Product service is done by expertise like service engineer and B.S.C engineer.
 Only own product servicing is done

After sale service is done at free of cost for one year

Table: Opinion about LG Microwave oven and it’s features.

Opinion Good Very Good Excellent No Idea Bad

Percentage 23% 11% 4% 57% 5%

 Consumer Analysis:

Consumers express themselves and communicate with each other through the
consumption of goods and services. Understanding how marketing manages its
customers represents one half of the analysis. The other half needs to focus on
the aims of marketing in respect of its customers. Overriding the commercial
aims (for example, increased usage, profit and market share) is that of what
marketers are marketing and consumers are consuming. The company that
really understands how consumers will respond to different product features,
prices, and advertising appeals has a great advantage over its competitors.
Consumer purchases are influenced strongly by cultural, social, personal and
psychological characteristics. The marketer needs to know what people are
involved in thy buying decision and what role each person plays. People might
play any of several roles (initiator, influencer, decider, buyer, and user) in a
buying decision. Knowing the main buying participants and the roles they play
helps the marketer fine-tune the marketing program.

The customer analysis for the product Microwave oven of LG Butterfly Marketing
Ltd. has been done through a market survey. And on the basis of that survey
customer analysis has been made.

Survey Type: Consumer Survey

Sample size: 120

Income Group: Within Tk.20000-Tk. 40000 and above.

Occupation: Service holder & Business personality.

Social Class: Lower-middle, Middle and upper middle.

Survey Area: Different Location of DhakaCity.

Date of Survey: 1st to 30th of August.

In this case we have gone to the butterfly showrooms (Mohammad pur, stadium
market, Kazi Nazrul Islam Avenue, Mirpur, Moghbazar, 756,Shewrapara, Rokya
Sarani,Mirpur,Dhaka, 15/4,Mirpur Road, Shaymoli,Dhaka).   for collecting
information of consumers . We have collected information from 120 consumers.
We have tried our best to cover all levels of customers.

CONSUMER ANALYSIS

Table:3.1 Present brand users of Microwave oven of different brand.

Brand Sharp Samsung LG Panasonic whirlpool

32 20 25 13 10
%

Table:3.2 Present china brand user of Microwave oven of different brand.

Brand Butterfly Golanz superaristion konka Walton Nova Noka

% 1.72 6.90 12.07 22.41 24.14 17.24 15.52

Table: 3.3  Specific reason for choosing particular Microwave oven.

Reason Price Brand Features Warranty Getup

image
% 42 22 18 15 3

Table:3.4  Opinion about the “Brand Image” position.

Brand name Percentage Position

Sharp 24% 1st

LG 21% 2nd

Samsung 16% 3rd

Konka 12 4th

Panasonic 11 5th
 whirlpool 9 6th

walton 8 7th

Golanz 5 8th

Other brand 3 9th

Table: 3.5 Opinion about low price offer high quality.

Opinion Agree Not sure Strongly Disagree

Percentage 10% 42% 48%

Table:3.6  Opinion about LG Microwave oven price present. Size 27, 28, 30,
(Liter) Price: 13390-14990-15990

Opinion about price Reasonable Affordable High Unreachable

Percentage 30% 29% 35% 6%

Promotion Activity and Advertisement:

Advertising is an evolving business function. It was traditionally used to

announce the availability of products in customer, brand building, positioning
conveying the USP (Unique Selling Proposition) and so on. In recent years,
advertising hag undergone a number of significant changes in both strategy and
execution. Most of the consumer product companies have come to the stage
where they cannot do business without advertising. It used to be said be that 
advertising was the smartest form of communicating without telling the truth. With
the cost of  media skyrocketing. and the attention span of the customers
shrinking with ad clutter, we cannot blame the advertisers for not giving the entire
truth. advertising is a communication tool. In order to be successful. we must
develop goals and objectives in  keeping with the communication core of
advertising Once we have clearly defined the communication goals, we must
then adders the role of advertising within the overall marketing strategy of the
firm.

The  advertising campaign:

The campaign may be carried out an advertising agency for a large organization.
The important starting point is to have clear objectives as to what is to be
achieved. The stages in the advertising campaign set out are in a recommended
order.

Identify right timing :

Timing of the advertising is crucial. Too before the event, and the customers
forget; too late and they have bought something else. Seasonal markets need
careful timing. A Media Expenditure Plan should be drawn, detailing at what
stags of the campaign the money should be spent, and on which media need to
be informed first so that stocks will be in the shops when consumers get to hear
about it.

Promotion to the consumer: Advertising media:

Promotional communication methods consist of advertising sponsorship,

branding. Packaging, publicity. Relations. sales promotions and merchandising.
They must not offer conflicting messages. Advertising media must be chosen for
its ability to reach the right market segments. Perhaps the most significant role
that advertising plays is its advertising is its contribution to the creation of brand
preference. If the necessary ingredient for advertising is a brand name, then the
key to continued successful advertising is a good product. It goes without saying
that no amount of advertising will persuade consumers to repeatedly buy a bad
product. The Key to successful advertising is to view a product as a bundle of
consumer benefits rather than as a physical commodity. Advertising must
communicate messages that address major benefits of a product and
communicate realistic benefits of consumers. Examples of primary product
consideration in establishing advertising goals are:

1. Brand position within a product category. Products priced at the high end of a
category will require different advertising strategies just as advertising for now
products will differ from their established competitors.

2.         Product purchase cycle. Obviously. package goods bought on a biweekly

cycle.   such as groceries will use different advertising approaches than durable
goods,

such as appliances, which are purchased every 5 ro 10 years.

3.         Product awareness and market position. Product with high market
saturation has a much different marketing strategy than others, and it is reflected
in both its advertising budget and its creative approach.
4.Product seasonality. For seasonality, Product is marketed differently.

5. Short term advertising strategy. Is a particular campaign designed to gain

initial consumer trial, encourage higher purchase levels from current customers,
or based on the following.

Identity the right media:

The choice of media is large and rapidly expanding as more TV channels and the
new technology of the Internet add to the choice. Selection is therefore critical
and must be based in the following:

    Is the cover to be local, regional or national?

   Does the overall cost rule out any medium?
     How many people are reached and at what cost per person?
   Which social group doses the medium reach?
    How often con the message is put over- hourly, daily, weekly etc.?
        Can the message be detailed / how long a life will it have?
  What is the image/status/prestige of the medium?
   How important are sound, movement, color, size?
 Will the results be measurable e.g. Replies to one advertisement?

These are the key questions to be asked when selecting suitable media the lists
in the boxes in the diagram have been drawn up in categories in order to help
answer this question.

Advertising Pattern of Butterfly Marketing Ltd.

Butterfly’s advertising pattern is the following:

Electronic Media (Television)

Newspaper

Billboard

Road sign

Purchase of Point

Electronic Media: Butterfly Marketing Ltd. uses B.T.V., Channel I, A.T.N.

Bangla, n.T.V for their advertising purpose.
News Paper: Two Major News paper, Ittefaq & Prothom Alo are used for their
advertising purpose.

The odjective of adverfising of Butterfly Marketing are given below:

1.         To establish an immediate sale.

2.         To bring prospect to closer to a sale.

3.         To bring a long  term franchise.

4.         To bring consumprion among users.

5.         To initiate first move towards a sale.

6.         To give sales force a supporiting servise.

7.         To gain market support.

8.         To deeper penetrarion .

1. To open distrbution
2. To open distribution.
3. To develop image.
4. To import intormation.
5. To enter new marker
6. To create awarenes.
7. To support retail trade.
8. To promote incentive marketing.
9. To counter price competition.
10. To overcome memory laps.
11. To defend preseent positio.
12. To establish market lead.
13. To reinforce reputation monopoly.

Advertising Agency of Butterfly Marketing Ltd.

Butterfly Marketing Ltd. do their advertising activities through the Nishu

advertising agency for specially T.V. media.

 Sales Promotion:
The techniques of sales promotion are so diverse and widely used that they are
part of the promotional programs of virtually every company. Sales promotion is
directed to a number different target markets and comes in an array of formats.
Despite its many forms, all sales promotion techniques have in common the goal
of creating short- term sales. The most frequently used forms of sales promotion
are the following

Š         Point- of – purchase advertising

Š    Premiums

Š    Specially advertising

Š    Coupons

Š         Sampling

Š    Deals

Š         Event marketing

Š         Sweepstakes and contests

Š         Cooperative advertising

Š         Trade Shows and exhibits

Š         Directories and Yellow Pages

Š    Trade incentives

Butterfly’s Sales promotional objectives.

Table.3.4.1  Sakes Promotional objectives of Butterfly

Consumer Promotion Trade and industrial promotion

1. Matching comp 1.   Extending distribution network.

2. Increasing amount of purchase.
3. Combating own corporate purchase
and image
4. Inducing immediate purchase.
 5. Providing distribution sales push.
6. Stimulating demand push.
7. Retained established customers.
8. Reaching specific markets.

9.   Extending effective distribution.

10. Overcoming seasonal patterns.

11. Developing brand awareness.

12. Controlling selling effort.

13. Acquiring marketing intelligence.

14. Inducing consumption of range.

15. Evaluating Media effectiveness.

2.   Meeting competitive activity.

3.   Stimulating showroom/ outlet’s co-

Operation

4.   Overcoming seasonal fluctuation

5.   Introducing new product

6.   Opening new accounts.

7.   Increasing average value of order.

8.   Promoting showroom target

9.   Enlisting support from publicity

10. Encouraging advance stock holding.

11. Gaining merchandising support.

12. Purchasing supporting products.

13. Educating for trade.

14. Reclaiming lost or dormant business.

15. Securing media news coverage.

Types of Sales Promotion of Butterfly:

Table :3.4.1  Different types of promotional activities of Butterfly

1. Consumer incentive 1. Trade incentive

2. Price reduction
3. Competition 2.   Trade exhibition
4. Personality Promotion
3.   Showroom promotion
5.   In store and exhibitions
demonstration 4.   Trade Bouncers

1. Distribution incentive
2. Merchandising activities
3. Competition

8.   Point- of- Sale aids

Channels  distribution of LG Butterfly Microwave oven:

“Any sequence of institutions from the producer to the consumer including one or
any number of middle men is called channel of distribution”- Mc Carthy.

Producers normally use a number of marketing intermediates for taking their

products to users. Marketing intermediaries bear a variety of names such as:
sole selling agents, stockiest, Wholesalers, franchised dealers retailers,
authorized representatives, brokers/ commission agents and jobbers. All such
intermediaries constitute the distribution channel. The depots/ show rooms and
other direct outlets of producers also form part of distribution channel.

Role and Importance of distribution Channel’s

Distribution channel’s play a pivoted role in the successful marketing of most

products especially consumers products.

 Channel Perform a wide variety of functions:

The importance of distribution channels can be understood clearly by
analyzing the wide verity of function performed by them.

 Channels provide distributional efficiency to manufacturers.

1. Channels supply products in required assortments.

2. Channels provide salesmanship.
3. Channels help merchandise the products.
4. Channels help implement the price mechanism.
5. Channels look after physical distribution and financing functions.
6. Channels decision have a vital bearing on decision on other areas of marketing.
7. Channels act as change agents and generate demand.
8. Channel levels.
9. Channel members.
10. Channel length.\

\Butterfly’s Channel of Distribution:

Company must decide on the best way to store, handle, and move their products
so that they are available to customers in the right assortments, at the right time,
and in the right place. Logistic effectiveness will have a major impact on both
customer satisfaction and company costs. A poor distribution system can destroy
an otherwise good marketing effort. Butterfly Marketing Ltd. is maintaining the
following distribution channel under the direct supervision of logistic department
through authority to maintain the product property and to reach the final
consumers.

Supply chain

Distribution Channel

 Physical Distribution:

Physical distribution looks after physical handling of goods, and assures

maximum customer service. It airs at offering delivery of right goods at the right
time and places to customers. Physical distribution activities cover.

a)                  Order processing

b)                  Handling of goods.

c)                  Packaging.
d)                 Warehousing.

e)                  Transportation.

f)                   Inventory and

g)                  Customer service.

All middle men in distribution perform these functions and they assure putting the
product with in an arms length of customer desire and demand.

Table:3.5.1 Opinion about showroom’s decoration positive impact.

Brand Sharp Samsung LG Panasonic whirlpool

% 20% 26% 24% 14% 16%

Price analysis :

The price prevailing in the market at any given time and determined by the forces
of demand and supply is the market price. Market price is important because
price changes send signals to producers which tells them whether they should
produce more or less of their good or service. If the price of a product is raising
this is a sign that producers need to supply more.

Producers will respond to this signal because, in general, higher rives lead to
higher rewards for producers (profit) and so they have an incentive to work
harder and increase production. Filling pries, on the other hand,. hand generally
lead to falling profits and this is the way that the market signals to producers that
they should produce less.

The influence of price on demand: The price of a good or service is obviously

one of the main factors that influence how much we buy of it. The factors that
cause the level of demand to change are explained below. The general rule is:

An increase in demand leads to arise in price

A decrease in demand leads to a fall in price

Changes in income: Most people gain an income from working in the form of

wages and salaries. However, people con gain an income from a number of
other sources. They might be from employment, savings, retirement pension,
state benefits, property ownership, share ownership or business. It is cleat that
the greater the level of people’s income the greater the level of demand. It also
follows from this that higher the level of demand the higher the market price.
Obviously this logic can also be applied the other way around- lower incomes
lead to lower demand and lower price.

The price and availability of credit: The price of some goods and service that
people wish to buy can often be so high that they find it difficult to afford them out
of one month’s income.

The influence of price on supply: The price of a good or service is obviously one

of the main factors that influence how much we buy of it. The general rule is that:

The higher the price of a good or service the more businesses will want to
produce

The lower the price of a good or service the less businesses will want to produce

The factors that cause the level of supply to change. to change. and hence the
market price of goods and services to alter, are explained below.

An increase in supply leads to a fall in price

A decrease in supply leads to a rise a in rise in price

Changes in the cost of production: A rise in business costs will often lead to a fall
in profit levels and so firms will lose some of their incentive to produce. It the
majority of firms in the industry are affected in the same way then there will be a
fall in supply. Similarly a fall in business costs tends to increase profit levels and
they have an incentive to produce more. If most firms in the industry respond in
the same way then there will be an increase in supply.

Factors to consider when setting prices:

Before setting price, the company must decide on its strategy for the product. If
the company has selected its target market and positioning carefully, then its
marketing-mix strategy, including price, will be fairly straightforward. At the same
time, the company may seek additional objectives. The clearer a firm is about its
objectives, the easier it is to set price. Price is only one of the marketing- mix
tools that a company uses to achieve its marketing objectives. Price decisions
must be coordinated with product design, distribution, and promotion decisions to
from a consistent and effective marketing program.
Pricing of Microwave oven:

In case of the product Microwave oven, Butterfly Marketing Ltd. has adopted the
following price on the basis of following formula.

Selling price = Landed cost (LC) + Administrative cost + Transportation

cost + Warehousing cost + VAT + Profit margin.

 Different brand, different size and different price:

Brand name Size (Liter) Types Price

Sharp 27 convection 19000

Sharp 41 convection 25000

Sharp 27 Grill 15500

whirlpool 20 Grill 7100

whirlpool 30 convection 15990

Walton 17 convection 8600

Walton 23 convection 14800

Walton 30 convection 15700

Konka 25 convection 10500

Konka 30 convection 11500

Different model and price of LG microwave oven.

Brand name Types Model Size (Liter) Price Sale

system
LG Grill 604A 28 13490 Cash &
Installment
 LG Grill 5644B 27 13390 Cash &
Installment
LG Convection 808WAR 30 15990 Cash &
Installment
LG Convection 767W 28 14990 Cash &
Installment
LG Convection 7645B 30 19990 Cash &
Installment
BUTTERFLY Convection 900ESL30R 28 10990 Cash &
Installment

Table –3.6.1  Price comparison of different brand for 30 Liter MC:

LG Sharp Konka whirlpool Walton

15990 21000 11500 15990 15700

1. Market Analyses of the Industry

2. Major participants of the Industry:
3. Market Share Analysis of Industry for global brand.
4.   Market Share Analysis of Industry for Non brand

Market analysis of the industry:

To ensure that our analysis is consistent, it is very important to define the

‘industry’ we are dealing with. An ‘industry’ is defined as a group of organizations
or business units producing close substitutes. For the convenience of our
analysis, the industry can be defined in both wide and narrow.

Wide Definition :

Base on the available information, the industry can be defined as “Consumer

durable Electronics Goods” industry.

Narrow Definition: 

For the critical analysis, the industry can be defined as “Microwave oven”
industry.

Major participants of the Industry: 

The companies who are performing well and have maximum market share of the
industry are as follows:

Global brand:

1.         LG-Butterfly

2.         Sharp

3.         Whirlpool

4.         Panasonic

Major participants of the Industry: 

Non brand:

1. Butterfly
2. Golanz
3. Superaristion
4. Konka
5. Walton
6. Nova
7. Noka    .

Table : Market Share Analysis of Industry for global brand : (Sales Volume)

For the Year 2007

Company Name Market Share %

LG 49.44
Panasonic 34.61
Sharp 6.04
Whirlpool 8.78

Table: Market Share Analysis of Industry for Non brand: (Sales Volume)

For the Year 2007

Company Name Market Share %

 Butterfly 1.72
Golanz 6.90
Superaristion 12.07
Konka 22.41
Walton 24.14
Nova 17.24
Noka 15.52

Recommendations:

I recommend the following steps:

 Price can be reduced to attract the customers mostly.

 More advertising campaign should be taken to attract the customs.
 Number of showrooms should be increased.
 Credit facilities could give to the dealer in some cases.
 Prices should not be more frequently.
 Set up a control R & D department to make R & D activities more cost effective &
fruitful.
 Should have in house advertising agency.
 After sales services facilities should be prompt & with care.
 Strengthen channel of distribution.
 Can diversify in other domestic products to gain economics of scale.
 Become more aggressive to cover wide area.
 Setting up a strong brand image.
 Can Improve promotional activities (consumer promotion, trade promotion).

Implementation plan:

Managers at all levels are involved in implementing a strategy. Of course top

level managers should take the initiatives to carry out the plan with the help of
middle level and lower level managers. Then the whole task should be divided
into several parts. Procurement manager is needed to play a major role here. He
should have the capability to negotiate with the supplier in order to lower the
input price. They can also setup a central R & D department to make R & D
activities more cost effective and fruitful. The R & D team has also something to
do in implementation. The manager in charge of R & D should persuade his
subordinates to come up with innovative ideas and give operational efficiency to
lower the price.

The manager of marketing department will be responsible in implementing the

plan. He should explore creative ideas to attract the customers. The advertising
and promotional activities should be exceptional to influence the consumers to
buy Butterfly products.

Contingency plan:

There is always uncertainty in this world. The strategies taken to accelerate a

company’s growth may go in vain. Therefore the company should have some
backup strategy. Since the average income of Asian consumers is low, many
people may be reluctant to buy Butterfly’s products. For this, Butterfly can
introduce an economic version of its product line, which will be affordable for the
low-income consumers. Not only for Asia, can it produce this economic version
for any low income-earning people all over the world.

International market is unforeseeable; the government may not act in accordance

with the terms and conditions. In this case they can seek cooperation from the
govt. to put pressure on the host government so that they comply with the
international norms, rules and regulations. Local people who have strong
influence on the govt. should be convinced by parent company so they act in
favor of them. All these strategies may not produce the desired result, so
insurance should always be there to cover up this loss before entering any new
country.

 Conclusion:

From the study of Competitive market analyze of microwave oven, it can be

concluded that functions followed by Butterfly marketing company Ltd. is
comparatively good. Since consumer demand is changed instantly, the company
should take the advance strategies and policies to grab the market. In this regard
integrated marketing can be helpful. Rivalry is likely to increase; its Butterfly’s
strategic move to global market has been successful. The life cycle stages of the
products of Butterfly are mostly in mature stage. All the big companies in the
market are acquiring small companies and as the product range-is-quite large
they enjoy Economies of Scale. Customers are very brand loyal some rivals have
good distribution channels. As buyers’ preferences are changing it is inducing the
industry to change. An intense competition is going on in the market of home
appliance between the brand and non-brand product. The increasing demand for
non-brand product is due to lower price rather than others.
Customers are not very well-known about LG/Butterfly product like due to the
drawback of advertisement. Advertisement is one of the key issues of sales
growth through which Konka. Nova and some other non-brand are doing very
well in sales. Konka and Walton are most demanding in the gray market because
of lower price, nice getup and for guarantor period. The demand of Microwave
oven is increasing day by day which is a positive sign for LG. Price is the first
choice of the customer for purchasing Microwave oven in the gray market but
brand loyalty and quality are not ignorable.