marketing strategy c.s sasko by sheenaindhul

1 | P a g e Sheena.Indhul IMM-GSM: Marketing Strategy M4 Case Study

Sasko Milling

INTEGRATED MARKETING PLAN

& STRATEGY 2002-2006


EXECUTIVE SUMMARY

Pioneer Foods dates back to 1920. De Boeren Ko-Operatieve Molen Maatschappij

Beperkt"-BOKOMO, was a co-operative milling business in the 1920’s, which was

associated with the development of Die Suid-Afrikaanse Ko-operatiewe

Graanmaatskappy Beperk – SASKO.

Sasko is in a highly competitive industry. The company’s main focuses are grains,

maize and flour. Since 1997 Sasko Baking and Milling has prided itself as being a

strong contender in the primary market for wheat products and in 1998 were the

leaders in the special maize meal category.

Vertical Growth has proven favourable to some extent; in such a competing industry

they have experienced both losses and success. The most important requirement in

this industry is to respond to demands. Sasko has taken a leap of faith, in launching

a new super maize meal. White Star was launched in 1999 as a top-end super maize

meal, competing with the premium maize meal brands in South Africa. Positioned as

the first fortified maize meal (with added Vitamin A), the brand quickly took to the sky

and showed an incredible growth rate.

In 2002 White Star, will become the most successful brand within its category. White

star has become a way of life for the people of South Africa. To grow market share in

a competitive industry white star needs to extend their brand portfolio. Differentiating

it from the many competitors that exist in the market. New markets have opened up,

such as the Black Diamonds, who are now fast becoming active participants in the

economic sector of South Africa. Added to this is the threat of the consistent flux of

the economy and government legislation regarding biodiesel. White star must grow

its market share by extending its portfolio into new segments, offering the segments

added value, while ensuring that the product remains of a high quality


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

Executive Summary 2

Part I: Situational Analysis

Macro environment

Political/ Legal situation 5

Economic situation 5

Socio-Cultural /Demographic situation 6

Technological situation 7

Enviroment situation 7

International Situation 7

Market Enviroment

Market Industry 8

Primary Industry 8

Secondary Industry 8

Tertiary Industry 9

Competitors 9

Customers 10

Suppliers 10

Intermediaries 10

Middleman/Retailer 10

Micro-Enviroment

Target Market 11

Positioning 11

Product/s 11

Price 12

Place 12

Promotion 12


Part 2: Swot Analysis 15

Part 3: Key Issues 16

Part 4: Assumptions 16

Part 5: Marketing Objectives 16

Part 6: Marketing Strategy

Target Market 17

Positioning 18

Product Strategy 19

Price Strategy 21

Place Strategy 21

Promotion Strategy 22

Part 7: Action Plan 24

Part 8: Budget 25

Part 9: Controls 26

Part 10: Annexure A Tables 27

Table 1.1: White and yellow maize: Geographical distribution of production 28

Table 1.2: Total maize area harvested, production, consumption and prices 28

Table 1.3: Market share of white maize millers 28

Table 1.4: Extraction rate of various maize meal types 29

Table 1.5 Price Structure From farm gate to retailer 29

Table 1.6: Basic White Star Marcom Strategy 30

Part 11: Annexure B Tables

Figure 1.1: Gross value for the top ten agricultural products for 2002/03 32

Figure 1.2: White maize the super maize meal retail price 32

Figure 1.3: Positioning Map Comparing Consumer Preference 33

Figure 1.4 The Value Chain 34

Figure 1.5 Porters 5 forces 35

Part 12: Annexure C

Campaign concept-Illustration 37

Part 12: References 39


MACRO ENVIROMENT

Political/Legal Situation

In 1997 the Maize Industry deregulated in South Africa, report by Food Price Monitoring

Committee, (2003) and Traub and Jayne, (2004) showed that the maize milling/retail

margins in the formal market have been rising in recent years after maize market

deregulation. Deregulation in the agricultural sector caused shifts in the geographic patterns

of white and yellow maize production. (Table 1.1: White and yellow maize: Geographical distribution of

production) Source: Crop Estimates Committee, 2003

Legislation was introduced in 1979 to the effect that all maize meal be Vitamin B enriched.

Further studies by the Department of health in 1995/1996 illustrated that one in three

children suffer from a lack of Vitamin A. It is now statutory to add both Vitamins.

Economic Situation

Before 1995, South Africa had a controlled marketing system which restricted informal and

unlicensed traders and millers. Since the implementation of the deregulation policy the price

of maize increased gradually up to 1999/2000.

Since 1997, product prices have been determined under a free market condition and are

formally traded on SAFEX. One of the main flaws of liberation is that consumers will

experience price peaks. The flux in R/ton from 1997 to 2000 was a difference of R70.00/ton

from the real white maize producers. (Abstract of Agricultural Statistics, SAFEX) Taking into account the

inflation of maize was also due to other producer variables. (Table 1.2: Total maize area harvested,

production, consumption and prices.)

South African maize milling industry will remain characterised by few role players and ever

increasing margins. This would impact significantly on low-income consumers who spend up

to 20% of their monthly income on maize meal (Watkinson and Makgetla, 2002).

In 2002 the cost of maize crops and raw materials increased by at least 100%. Maize was

the largest contributor to the GDP. Food prices rapidly increased, for the first time in history

1kg of maize was more expensive than the same quantity of flour. This sharp increase in

the producer prices was mainly caused by a strong depreciation in the exchange rate,

caused by erroneous market signals of possible maize crop failure. White maize producer

prices increased from 2001, R671.50/ton to 2002 R1158.20/ton. (Abstract of Agricultural Statistics,

SAFEX) This is evident in Table 1.2.


South Africa’s lower lifestyle standard measurement (LSM) was affected. The total

percentage of South Africans that always have enough to consume was recorded at 58%

(Source: Future Fact 2000) of which majority were the higher income groups LSM 6-8.

Socio-Cultural/Demographic Situation

South Africa is rich in its cross-cultural assimilations that capture some of the positive and

exciting features of the social, cultural, and ethnic diversity.

The minimal dietary requirement for the black South African is maize meal. The diverse

maize meal market is attributable to the changing socio-cultural influences that differ

regionally in addition to the economic situation.

Super maize consumer values are changing and demand high quality maize that is high in

energy, cooks faster, softer and enriched with vitamins when compared to the unsifted

maize. Super maize meal is preferred by urban and peri-urban females aged between 18-35,

LSM 3,4,5 who make their own purchase decisions, keeping in mind the welfare of their

family. Social and financial pressure impacts when commodity prices like maize meal

increases, affecting the ability to sustain status quo.

The changing roles of families and working women within the middle class Black South

African is having a positive impact on their society since. Busy working class women are still

pressured to produce a meal after work, literally poverty stricken of time. Super maize meal

attributes complete these variables by cooking faster quicker and still serves the same taste

and enriched vitamins and energy for a family.

The changes in socio-cultural trends in the South African market have been influenced by

many variables. Urbanization started in 1940’s and increased rapidly into the early 1970’s.

Post-apartheid reform increased the countries middle class by 30% between 2001 and 2004.

The transition phase in healthy diets started gradually as it impacted on the black South

African core values and beliefs. In the Black African culture one is expected to be larger than

their standard body frame. This is a cultural value that was passed down from generation

and reinforced by others who adhered to the core beliefs and value system. The

understanding was should a black African female appear slim she was considered a shame

to the family as she had been perceived to have the white man’s disease that is HIV/AIDS.

(Sociocultural Influences and Eating Disorders Around the Globe By Mary K. Stein, Managing Editor: Extract: Dr. Christopher

P. Szabo)


The impact of AIDS today on the demographic population will have an impact on the

consumption of maize meal, in South Africa. Source: National Agricultural Marketing Council (Namc)

Maslow’s Hierarchy of needs illustrates the shifts that are in action from basic needs to

psychological needs this is the influence of the western world and as a result we get the

evolving Black Diamonds. Eating habits have been curbed and diets, changing. The shift in

staple grain crops to a more diverse diet of eggs and meat indicated the influential impact of

the western culture health trends on generation y in 2005. The need for self-fulfilment will

become a priority for generation M. The growing social trend leaped from material to non-

material accomplishments. Having control over their lives and making decisions. Self-

conscious, new social interaction with other cultures allows for secondary thoughts this new

middle class society will shape the tastes and preferences. Free thinking, western culture

and women empowerment are some factors that shape our country.

Technological

The industry shifted from labour intensive to capital intensive, highly mechanised and

automated production units resulting in a more refined, softer super white maize.

Newly imported technology has made it possible to extract more super maize meal from a

single kernel without compromising on quality and reducing black spec.

Other forms of scientific technology that have captured many is the genetic mutation of

maize. (Table 1.3: Market share of white maize millers) Source: Competition Commission, unpublished information

Enviroment

Negative impacts on maize crop failure in regions can cause major effects across the board

as indicated in 2002/2003 flawed market signals of a possible crop failure.

The climatic advantage of maize meal is its ability to adapt in any climate. In recent years the

study of maize has led to assist in the bio diversity of emerging trends such as biodiesel. The

female maize flower is used as an alternative medicine in herbal supplements. The chemical

composition of maize starch allows us to make plastic, fabrics, adhesives and many other

chemical based products. Direct plant protection precautions for maize are, essentially,

aimed at weed control.

International

As maize is an internationally traded commodity, it is also subjected to the international

market conditions. The demand and supply conditions of maize in the international market

influence domestic prices directly.


Market Industry

Maize is the most important grain crop in South Africa, being both the major feed

grain and the staple food for the majority of the South African population. In 2002/03 maize

was responsible for the largest contribution of 13.78% to the total gross value of the

agricultural production with a gross value of R9.5 billion. (Figure 1.1: Gross value for the top ten

agricultural products for 2002/03)

The South African maize industry is also the largest maize industry in Africa and ranked in

the top 10 maize producers in the world. The major production areas in 2002 were situated

in the Free State, North- West and Mpumalanga Provinces.

The average local consumption requirements are estimated at 7.4 million tonnes. This can

be split up into 4.2 million tonnes of white maize and 3.2 million tonnes of yellow maize.

White maize is the staple food of a large section of the African population in Africa and this

account for 94% of white maize meal consumption.

In 2000/2002 more than 40% of all the maize meal sold in the SA market is super maize

meal and this percentage is increasing. Special maize meal sales make up 30% of total

sales.

Primary Industry

The geographical distribution of white maize increased in the Northern Cape. In this area

mainly irrigation farmers have opted to plant white maize as a response to the high prices.

There is a variety of maize meal types within the maize meal category. The maize meal

market varies distinctly from one region to the next. To succeed in the staple foods category

it is necessary to hold a 20% share of that market. Source: Sasko White Star, Case Study.

According to the Grain Silo Industry (2002), the total grain silo storage capacity in South

Africa is estimated at 17.5 million tonnes, 85% of which is owned by 22 silo owners. Most of

this storage capacity is also located in the provinces in the northern parts of the country.

Secondary Industry

According to the National Association of Maize Millers, the top 4 companies in

this group of 22 millers produce the majority (73%) of the market share of white maize meal.

.(Table 1.3: Market share of white maize millers) Source: Competition Commission, unpublished information:

Analysis of selected food value chains. The secondary industry converts maize to either maize-meal

for human consumption, for animal feed or for maize starch.


Although an extraction rate of 62.5% is reported for super maize meal, some industry

specialists regard this figure as “conservative”. The best-selling super maize meal brands,

IWISA and ACE, only have a 55% extraction rate. (Table 1.4: Extraction rate of various maize meal types)

Source: Chamber of milling

The effect of the expensive maize bought during the first part of 2002 impacted on the

industry towards the middle of 2002, as the spread between retailer and miller became

negative. Millers could not increase retail prices any further they had high costs for raw

material. This meant large losses in the maize milling industry. Volume of maize milled

declined rapidly as consumers responded negatively to the high maize meal prices. Figure 1.2:

The white maize spot price, the super maize meal retail price and the miller to-retail margin. Source: SAFEX, AC Nielsen,

Tertiary Sector

The tertiary sector consists of traders, retailers and transporters. Traders move the produce

to the domestic or export market. There are three types of traders in the maize industry,

hedgers, arbitrageurs and speculators The retail sector provides infrastructure and services

for the distribution of maize products from the miller to the final consumer. Transport helps to

move the maize from the farmers to the silo owner, from the silo owner to the miller and from

the intermediaries to the final consumers.

Competitor

The maize meal market is increasingly competitive. The best-selling super maize meal

products are Iwisa and Ace. Premier foods and tiger milling were the leaders in the white

maize meal market with an extraction rate of 55%-62,5%, before Sasko entered the

competitive super maize market.

The competitive advantage Sasko had was the additional Vitamin A enriched white maize

meal. Sasko customer centric approach had also led them to understand the importance of

the black specs per kilogram and vitamin enriched maize meal. The white star slogan “the

clever choice” played a significant role against their competitors. White Star is entering a

commodity market, making the job of differentiating the white star from its competitor brands

difficult.

In 1998 Pioneer (Sasko) were leaders in the special maize meal category with 4 of their

brands holding a substantial portion of the market share. In 1997 Pioneers (Sasko) super

maize meal category had only 2% of the market share. To succeed in the super maize meal

category Sasko needed to increase their market share by 20% so Sasko launched White


star in 1999. In 2000, Sasko held more than a 30% total share of the maize meal category

and within 20months White Star captured 10% of the super maize meal market share. White

stars regional market share varied between 5% and 70% depending on the region.

Consumer/Customer

Maize meal is a staple diet for the price sensitive consumer. Research confirmed that “mama

knows her pap”, consumers have a consistent and uncompromising idea of what they expect

from a quality maize meal. White star super maize meal needs to meet these standards of

the quality conscious and brand loyal consumer. The low level of disposable income are

more subjected to change should these attributes not be met.

Suppliers

Pioneer (Sasko) purchased Tongaat mills and Amaize Co. to assist with the increase in

production. Pioneer mills supplied Sasko with super maize meal. The production process is

highly fragmented as one brand is produced at a number of different plants in different

regions. Sasko relies heavily on other local mills production capacity and the ability to ensure

consistent standard of quality.

Intermediaries

Sales reps in each region compiled a list of 10 -20 key customers to stock the White Star

brand. These retailers were their main focus, rationing the brand to limited stores will yield

better results and consumer demand will pull products into the remaining outlets.

Middleman/Retailer

Maize meal is an FMCG product, using the traditional channels. The distribution costs are

high. From wholesaler to retailers such as Pick n Pay.


MICRO-ENVIROMENT

Target Market

Primary target market

White star target markets are urban or peri-urban females between the ages of 18 – 35, who

fall under LSM 2, 3, 4.

POSITIONING

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

Brand Positioning

In order to elevate the white star brand they needed to have a clear unique proposition and

style of communicating through the clutter. White star is positioned as “the clever choice”.

This is perceived in the mind of the consumer as “they are making the right choice by

purchasing white star super maize meal”, it matched consumer’s perception of what they

perceive to be high quality super maize meal. The slogan is indirectly used to draw attention

to the fact that White star was the only super maize meal with vitamin a. This was white stars

unique brand proposition. At the time white star did not have an icon so the objective was to

present white star brand personality.

White star synergetic campaign rouse to fame, the brand personality and unique positioning

proposition was pivotal to white stars launch strategy in 1999 reflecting its competitive

advantage and motivating the consumer.

PRODUCT

White star is a high quality super maize meal. White in colour with a fine ground texture.

White star super maize meal is enriched with added vitamins A and B. Super maize meal

cooks faster taste better and is softer with minimal black specs. White star is available in

1x10g, 1x12, 5kg package. White star is limited in its product range, the brand portfolio only

consists of White Star Super Maize Meal, as it was easier to support one brand.

Research approach contributed towards the success of the white star brand. The brand

name, pack design and advertising campaign were a result of the respondents as they were

consumers and could identify with the product. The product brand name: white star held

positive connotations, and the “white” added a quality approval. The “star” resembled

performance and excellence, one that may excel or go far.


Traditional maize meal packaging with a modern design twist was incorporated. Simple

design elements, that one can communicate with. The graphics illustrated a striking red,

shooting star on a white background.

PRICE

White Star super maize meal had to maintain a status quo and was priced marginally below

the leading brand. White Star super maize meal wanted to be perceived as a premium

priced product which targets LSM 2,3,4. super maize meal consumers. The lower – middle

class disposable income groups.

The more refined the maize meal the higher the price. Maize meal is sub categorised, super

maize meal is the premium product. Maize meal is a price sensitive market and escalating

costs would be passed onto consumers. The substitutes available are affordable, should a

consumer develop an attachment to White Star out of tradition then sensitivity to price

changes, would result in more inelastic demand. Price is also a factor when looking at the

supply chain. In 2002 the rapid increase in product was a result of erroneous market

information regarding bad crops. However many other factors played equitable role such as

bread price fixing.

PLACE

White Star super maize meal follows supply value chain. From farmer to silos to miller to

wholesaler to retailer. The manufacturing process of super maize meal is highly fragmented.

White Star Super Maize Meal can be found in large retailers Pick n Pay, Checkers-Hyper,

Spar and Metro store to name a few. Inland region, there are spaza shops and kiosks which

many are recognized as informal retailer.

PROMOTION

The product life cycle of white star launch strategy consisted of 3 phases. The campaign

focused on the primary target market, women. The message transmitted to women that by

purchasing White star she was making a “clever choice” for the real stars in her life, her

family. Sasko brand awareness progressed.

Growing Awareness (Introductory) phase:

Sasko developed an intimate customer centric relationship with their

consumers. “Know thy consumer” Sasko conveyed their dedication towards

reliability and quality of maize meal to their consumer.


Advertising

Primary Medium used to launch the first part of the campaign:

Radio, as it had the highest reach and frequency for White Star target market. Kwaito

music started to win a growing audience. White star was shooting for the stars with a

commercial using a Kwaito jingle.

Television

The Kwaito jingle commercial used on radio was also developed for television

Magazine.

Print, educated prospective consumers in recognising the packaging of the White

Star brand, the disadvantage was the language barrier and illiteracy rate that

impaired White Stars superior offering. The use of primary media radio and magazine

offered optimal exposure.

Inducing Trial (Growth phase):

White star brand was priced marginally below the leading brand in the super maize

category.

Sales Promotion

They launched White Star with a special offer, “cow and calf promotion” For limited

period of 3 months all consumers were given a free 1kg pack with every 12,5kg bag

of white star purchased.

Sampling

The above the line campaign included In-store promotional activity, capitalising on

community events through product demonstrations and sampling within the target

market.

Out Door Media (OOH) Off premise

A White Star trailer shaped like a shuttle broadcasted voice-over messages that

supported the extensive advertising campaign as it travelled through high traffic

areas.

Building Loyalty (maturity phase):

White star advertising campaigns continued. In-store promotional activities were

consistent. White star newly gained market share held and a new brand found its

way onto the shelves of many South African homes.


Personal Selling

Sasko had a strong and consistent internal sales force that supported the brand and

followed through.

Public Relations

White star received positive PR exposure at the time of launch: “The first super

maize meal with vitamin a.”


PART 2: SWOT ANALYSIS

SWOT ANALYSIS

STENGTH WEAKNESS

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

Share of market gained from 2% to 10% of super maize meal and held a overall 30% share of market in the maize meal category

Ability to sustain market share nationally is poor. 5% - 7% imbalance in market share From region to region

Technology that was invested into white star exceeds the product quality. Narrow product range

Committed Employee (Brand file) High cost of maize production

Research and Development as well as an internal strategic department

Rely heavily on media communications with no actual research on the changing socio-trends.

White star quality of super maize meal

Even though White star meets the needs of the Target market it is still uncertain if they could meet the same needs during the tough times.

Competitive advantage of enriching super maize meal with Vitamin A High cost of maize production

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

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

Target Market attitude towards white star indicated brand loyalty

OPPORTUNITY THREAT

Health Trends Ace and Iwisa- brand loyalty is strong

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

Brand Extension from 2002 into cereal or flavoured maize or healthier “light” maize.

Cost escalation impacts the target market- low disposable income

Increase Target Market Generic super maize meal substitutes

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

Demographic: black diamond’s emerging genertation into .urbanization

Increased regulations

Advancement in Genetics Global Recession causing inflation

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


PART 3: KEY ISSUES

Growth in existing product market- inc. market share of super maize meal

Extend category & geo-expansion segmentation-Focus on Black diamond

Product Development- Increase product offering by extending product line.

Brand Extension- New products

Market development- expand target market segments

Sales force needs to increase their customer base- Business 2 Business

Market trends are indicating a medium term demand for maize

PART 4: ASSUMPTIONS

White star super maize meal has maintained their market share in a competitive growing

market. The socio-cultural trends allow space for a larger market share. It is assumed that

the country’s economy is in a constant state of flux from the end of 2002 to the end of 2006.

At some point the exchange rate will cause a decline in R/ton. Possible losses in the future

2008 onwards, monitoring global economy will decide on the future sales of Pioneers assets.

Research and development need to be an ongoing process. A prediction of vertical

integration in the long term will commence.

PART 5: MARKETING OBJECTIVES

Increase market share in the target market from 20% (2002) to 35% by end of 2005.

Achieve 90% awareness on new White Star product range by the end of 2005.

Increase brand awareness amongst new target markets to 90% by end of 2005.

Increase product sales by 30% by the end of 2006

Increase the distribution phase of white star product range to outlets to achieve a

penetration of 85% by the end of 2006.


PART 6: MARKETING STRATEGY

Target Market

There are two target markets which exist for White Star. There is the B2C – Business to

Customer and B2B – Business to Business. These target markets are the foundation for

white stars prolonged existence.

Business To Consumer

White star target market can be further divided up into, rural, urban, peri-urban,

children and black diamonds.

Geographic

White star is distributed nationally to all provinces across South Africa; however its

primary target markets are in Free State, North West province and Mpumalanga.

White star can be found in the urban areas of South Africa.

Demographics

Age:

Majority of the consumers are aged between 7 to 55 years.

Income:

White star Super maize meal targets consumers in LSM 1 to LSM 7: low.

Gender:

Majority of the shopping are done by females.

Ethnic:

South Africa is multi-ethnic. Majority of the market are black/Africa

Family Lifecycle

Young single/married, with/without children, widowed/separated.

Social Class

The emerging affluent, trendsetting, Black Diamonds fall into the middle and upper

class. Maize meal is apart of their culture and have the deepest respect to adhere to

the elders.

Education

In the past, Sasko had illiteracy barrier. This strategy must certainly not continue, to

overlook these individuals.


Psychographics:

The psychographics of the target market can be described as “moving with the

times”. Highly driven and ambitious. Energy to succeed personally and professionaly.

Determined to show the world they on top of their games in all they do, from career

to family, home and social life. Source: Yankelovich MindBase segmentation

Behaviour Characteristics

Brand loyalty and image conscious customers.

Business to Business

The sales representative or key account manager markets the white star product range to

retailers and wholesalers. This also includes businesses and institutes.

Examples of which we must target are:

1. Government Hospitals eg: King Edward

2. Prisons

3. Restaurants eg: Africa 2 Asia

4. Game lodge & Reserves eg: For foreigners and locals

5. Airlines eg: South African Airlines flies in and around the African continent.

POSITIONING

Positioning Strategy

The objective is to maintain the current brand positioning at the same time enhancing it with

a new tag line that will appeal to both current and new target markets. White star is “the

clever choice” has proved, worthy. With the changes in social trends and new emerging

markets it is imperative that white star appeals to all segments. Tapping into the mind of the

consumer to discover their aspirations and lifestyle in the urban world White star is still

positioned as ‘the cleaver choice”, with healthier benefits quick and easy meal replacements.

White star is indicating progression with the “times” of the new emerging markets.

Figure 1.3: Positioning Map Comparing Consumer Preferences

Positioning statement

To be the no 1 health maize meal brand.

White star must be the “the clever choice” when it comes to maize meal.


PRODUCT

The white star brand now contains a variety of products to suit the changing markets. The

product ranges all contain the highest quality super maize meal. Adapting to market changes

white star has found healthier, tastier and versatile ways to make the consumer happy.

White star brands, super maize meal range, instant porridge and vita shakes.

Product Range

White star- super maize meal

White Star super maize meal products are the clever healthier delicious energy packed

super maize meal consumers can’t get enough of. It is a convenience product that can be

eaten with or without a little tomato relish fish, meat or vegetable, a simple, easy & quick

meal. White star maize meal combines an instant energy hit light, fluffy and smooth, texture

with a moreish melt in the mouth buttery taste delivering a satisfying, reassuringly familiar

white star experience. White star maize meal is rooted gratification leaving you with a feeling

of a full tummy. It is viewed as a tasty, versatile and vitamin enriched meal.

White star super maize meal is really “The Clever Choice”

The range is easily recognisable with its distinctive white red and green packaging and the

new unique heavy duty poly packaging. White star super maize meal is healthy with your

favourite side-order, and is available in a variety of pack formats.

White Star Maize Meal

White Star super maize meal

White Star super maize meal Braai pap (Course textured)

White Star Maize rice

White star Instant porridge

White star instant porridge provides your children with a smart, start to the day. Deliciously

flavored, super fine maize with, important 10 vitamins and 2 minerals. Packed with energy.

Easy, convenient, clean, no mess and fits in the handbag and lunch boxes– making them

perfect to carry around to school or family road trips. White instant porridge hot or cold milk

or water to enjoy a great tasting filling meal anywhere any time. Instant porridge mix can also

be drunk by adding 100ml extra liquid to the product.


The range is easily recognisable with its distinctive easy to handle individual (10) sachets in

a matte gloss box packaging. White star is really “The Clever Choice”

Instant Porridge

White Star Instant Porridge : Banana

White Star Instant Porridge : Vanilla

White Star Instant Porridge : Mixed berry

White Star Instant Porridge : Papaya

White star vita shake

Perfect for busy men and women, particularly on the move. All in one vita shake is a super

fine maize base. Enriched with vitamin and minerals that are easily absorbed by the body. L-

taurine, guarana, caffeine, Panax ginseng and Ginkgo biloba clinically proven to enhance

mental performance and boost energy. Provides a mind-body boost anytime, anywhere.

Increase energy and improve mental clarity for better performance throughout the day. White

star vita shake comes in 3 delicious fruit flavours. Produced by White star a brand you can

trust to deliver on quality and nutritional value. A complete meal solution for a 48hour day.

Instant – easy to prepare, just add milk or water.

The range is easily recognisable with its distinctive unique pocket size (10) sachets in a

matte box packaging. White star is really “The Clever Choice”

All in one breakfast

White star vita shake : Papaya

White star vita shake : Banana

White star vita shake : Chocolate

The Value Chain

Figure1.4 the value chain

Porters 5 Forces

Figure 1.5 porters forces


PRICE

The price is dependent of supply and demand, but the product is positioned as a premium

priced product with a marginal gap between the competitors. Research has shown in some

regions there is no price sensitivity it’s all about status quo. The expense of the premium

priced product is a result on the increase in extraction rates from 55% to 62,5% and recently

91%. The prices of the four main nodes in the food chain are the average producer price, the

mill door price, the list price, and the consumer price. Table1.5 Price Structure From farm gate to retailer

PLACE

The objective here is to grow market share and expose the new range to new markets. This

can be achieved by targeting the following institutions where the target market frequents:

White maize meal

Private / Public Schools and Tertiary Institutions –food court

Medical Centres / Health and Wellness Centres – in the waiting area and coffee shop

Retailers –Pick n Pay, Woolworths, Checkers, Garage Shops, Hospitals

Restaurants- Africa 2 Asia,

Game lodge & Reserves/ Safaris- The real Africa cuisine

Airlines- South African Airlines flies in and around the African continent.

Instant porridge

Private / Public Schools and Tertiary Institutions –food court

Medical Centres / Hospitals- Paediatrics, canteens or patients

Retailers –Pick n Pay, Woolworths, Checkers, metro city store, clicks, dis-chem

Medical Retailer – Pharmacies, dispensaries,

Game lodge & Reserves/ Safaris- The real Africa cuisine

Vita shake

Tertiary institutions, Colleges and Private institutions

Medical Centres / Health and Wellness Centres – in the waiting area and coffee shop

Retailers –Pick n Pay, Woolworths, Checkers, metro city store, clicks, dis-chem

Medical Retailer – Pharmacies, dispensaries,


PROMOTION

The overview objectives are to reach the new target market and increase

awareness. Sustain current target market. Increase volumes and market share in the

market. Each segment will have their own marcom strategy.

Table 1.6 Detailed Marcom Summary

Media Advertising:

1. Television

According to reach and frequency. Television adverts, for maize meal and porridge

will be on SABC 1,2,3, and e-TV. The time slots will be selected. All advertisements

for vita shake will be shown on SABC 1 and DSTV.

2. Radio

All radio jingles will be the same as the ones seen on television. On air adverts will be

in the morning and evening when listenership is high.

Print Advertising:

1. Magazine

Black diamonds are targeted in high traffic areas such as the airport magazines.

Sports-illustarted and Cosmopolitan. The lower LSM readership are bono and

fairlady.

Interactive

1. Online advertising:

Websites, Google advertisements and Vita shake individual website.

2. Social media:

Facebook, You Tube, advertisements

Direct Marketing

1. Cell phone:

Develop Customer database SMS ‘3321’ cost of R1 barcode number to win a price.

sms’s can be sent out to the current customers. 1. New product range 2. Special

offers 3. News- next community event 4. Competition notifications

Place Advertising

1. Billboards:

High traffic areas that reach the right audience. Schools, low cost housing areas.

2. Transit:

Black diamonds: billboard at Airport , Gautrain, Inner city transportation zones.


Store Signage And Pop Displays:

1. Floor advertisements

High traffic stores, metro city, depending on region and reach of the target market.

2. POP Display:

Increase pester power in selected regions, attract black diamonds.

Trade And Consumer Orientated.

1. Sampling: In-store, churches and schools

2. Sampling Black diamonds: See attachment to magazines

3. Bonus pack: 30% EXTRA on samp and maize

4. Shelf delivered coupon: limited to region

5. Free with purchase: Launch gift, free kids lunch bag with every purchase of porridge

6. Free with purchase: Launch gift, free vita shake- shaker/mixer

7. Near pack premium: attached onto maize meal will be a porridge sample box

8. Near pack premium: attached onto porridge will be vita shake

Event marketing and sponsorship

1. Festivals; Community festival Fun Day Festival – promote braaipap etc

2. Sponsor: Soccer team locals or player.

Public Relations

1. Community development- Educational school prefab with meals. 100 white star Low

cost housing development for a community. Vision: appendix

2. Graduate programme; Bursaries and Scholarships. Limited to disadvantaged families

Personal selling

1. Sales force: - Sales force per region: example: kzn region team a: upper region : set

goals & objectives ; Team B: lower region: set goals & objectives :Highly motivated

and competitive driven. Identify strategic distributions channels and outlet This will be

crucial for future growth and must be managed extremely well by the Sales

Managers in each region.


CONTROLS

1. Receive monthly sales volume and product progress reports from each Regional

manager

2. Monitor sales and expenses to ensure that it is in line with the budget.

3. Monitor market share, competitor levels and pricing through periodic market

research.

4. Monitor customers via surveys.

5. Plan Regional meetings with sales managers from each province

6. Receive monthly Sales reports from retail stores in each region

7. Plan regular meetings with regional Marketing manager 3 times per year.

8. Monitor online website visits by measuring website hit per week.

9. Monitor any changes in Demographics statistics on an annual basis.

10. Plan meetings with maize board every 6 months.


T A B L E S

Table 1.1: White and yellow maize: Geographical distribution of production

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

Table 1.3: Market share of white maize millers

Table 1.4: Extraction rate of various maize meal types

Table 1.5 Price Structure From farm gate to retailer

Table 1.6: Basic White Star Marcom Strategy


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

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

Table 1.3: Market share of white maize millers


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

Table1.5 Price Structure From farm gate to retailer

Price structure- Supply Chain

Farm gate price (4-month lag)

Transport cost: Farm gate to silo

Handling & Storage cost: Costs of farmer

SAFEX White maize average nearby contract price (4-month lag)

Transport cost: Silo to Mill door

Handling & Storage cost: Costs of miller

Income from sales of chop

Mill door price

MANUFACTURERS

Production cost (milling costs)

Packing cost

Packing material costs and losses

Administration, Warehouse and selling

Mill site costs

Distribution costs

Total mill site costs

Fixed Capital cost

Floating Capital costs

Total costs

Cost of production of super maize meal

Conversion cost

Average cost of maize (mill door price)

Total super maize meal cost

Divided by average extraction for super maize meal

Average cost of super maize meal

Miller-to-retail margin

Average Monthly Retail Price (actual retail price)


Table 1.6: Basic White Star Marcom Strategy

WHITE STAR

Segments Mama & Pap Smart star Black Diamond

Target market 18-35 5+ 21-45

Lsm 1-6 1-7 5-7

Slogan Clever choice Clever choice Clever choice

Tagline Move to the taste Smart champion

Product Super maize meal Instant porridge 1 Vita 1

Braaipap 2 2

Rice 3 3

MEDIA ADVERTISING

Television SABC 1,2,3,eTV, DSTV

Radio Ukhozi FM and Umhlobo Wenene FM Ukhozi,5FM,Metro fm,

PRINT ADVERTISING

Magazine Bono, Fairlady Airport magazine, Cosmo,Sport

INTERACTIVE ADVERTISING

Online advertising Website/Google adsetc

Cell phone 24%-96%

PLACE ADVERTISING

Billboards Schools High R/F area

Transit ads City Transport area Airport

STORE SIGNAGE AND POP ADVERTISING

In store High traffic area only

limited to region

Pester Power High traffic area only

limited to region only Floor ads Retailers

Pop display

TRADE AND CONSUMER ORIENTATED

Sampling Schools, churches Magazines ,In-store

Bonus Pack Samp & maize

Shelf delivered coupon R5.00 limited to region R10.00 limited to region

Premiums Free with purchase eg: Lunch bag

Near pack premium

EVENT MARKETING AND SPONSORSHIP

Festivals Community festival Fun Day Festival – promote braaipap

Sponsor Soccer team locals or player.

PUBLIC RELATIONS

Community

development

Educational school prefab with meals. 100 white star Low cost housing development

for a community. Vision: appendix

Graduate programme Bursaries and Scholarships. Limited to disadvantaged families.

Personal selling

Sales force Sales force per region: EXAMPLE: KZN REGION

Team A: upper region : set goals & objectives ;

Team B: lower region: set goals & objectives :

Highly motivated and competitive driven.


F I G U R E S Figure 1.1: Gross value for the top ten agricultural products for 2002/03

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

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

Figure 1.4 The Value Chain

Figure 1.5 Porters 5 forces


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

Figure 1.2: The white maize spot price, the super maize meal retail price and the miller

to-retail margin.


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

Map 1999-2000

Map 2002-2006

fine smooth Vitamin taste cooks easy fast soft light hunger energy

fine smooth Vitamin taste cooks easy fast soft light hunger energy


WHITE STAR CAMPAIGN


WHITE STAR MAIZE RANGE

STORE PROMO AND POP ADVERTISING

TRADE AND CONSUMER ORIENTATED

PRINT ADVERTISING

INTERACTIVE ADVERTISING

PLACE ADVERTISING

Symbolism


WHITE STAR INSTANT PORRIDGE RANGE

Research & Development

TRADE AND CONSUMER ORIENTATED - SAMPLING

PUBLIC RELATIONS

CONCEPTS


1. Brandkey- http://www.brandkey.co.za/

2. Case study reference: Simpson, J., and Dore, B. 2004. Marketing in South Africa:

Cases and Concepts. 2nd edn. South Africa: Van Schaik Publishers.

3. Tigerbrands- http://www.tigerbrands.co.za

4. Sasko - http://saskograin.co.za

5. Kellogs- http://www.kelloggs.co.uk/

6. Bokomo- http://www.bokomobotswana.co.bw

7. Brandkey- http://www.brandkey.co.za/

8. Pioneerfoods- http://www.pioneerfoods.co.za/

9. National chamber of milling- http://www.grainmilling.org.za/

10. National Agricultural Marketing Council (Namc) - http://www.grainmilling.org.za/

11. NDA- http://www.nda.agric.za/docs/fpmc/Vol4_Chap2.pdf

12. Department of Agricultural Economics (MSU

http://www.aec.msu.edu/maizemarket/index.htm

13. IRIN http://www.irinnews.org/

14. Abstract of Agricultural Statistics, SAFEX

15. Sociocultural Influences and Eating Disorders Around the Globe By Mary K. Stein,

Managing Editor: Extract: Dr. Christopher P. Szabo

16. Report on the investigation of the effects of Deregulation on the maize industry.

National agricultural marketing council (Namc) Section 7 committee evaluating the

deregulation process: The maize industry

17. Grain South Africa www.grainsa.co.za

18. National Chamber of Milling www.grainmilling.org.za

19. South African Grain Information System www.sagis.org.za

20. Grain Silo Industry

21. Agricultural Statistics: Department of Agriculture, Forestry and Fisheries

www.nda.agric.za

22. Competition Commission of South Africa www.compcom.co.za

23. Quantec Research www.quantec.co.za

24. ITC Market Access Map http://www.macmap.org/South Africa

25. ITC Trade Map http://www.trademap.org

178

http://www.brandkey.co.za/

http://www.tigerbrands.co.za/

http://saskograin.co.za/

http://www.kelloggs.co.uk/

http://www.bokomobotswana.co.bw/

http://www.brandkey.co.za/

http://www.pioneerfoods.co.za/

http://www.grainmilling.org.za/

http://www.grainmilling.org.za/

http://www.nda.agric.za/docs/fpmc/Vol4_Chap2.pdf

http://www.aec.msu.edu/maizemarket/index.htm

http://www.irinnews.org/

marketing strategy c.s sasko by sheenaindhul

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