Marketing Management: Bega Cheese Case Study

This marketing report provides an overview of Bega Cheese, a leading Australian cheese company. It discusses the company's market situation, issues faced, STP analysis, targeting strategy, positioning, marketing objectives, and strategies.

Marketing Management
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Table of Contents
Introduction................................................................................................................................4
Identification of issue.................................................................................................................5
Summary of the market situation...............................................................................................5
STP analysis...............................................................................................................................7
Segmentation..........................................................................................................................7
Geographic:........................................................................................................................8
Demographic:.....................................................................................................................8
Psychographic:...................................................................................................................8
Behavioural:.......................................................................................................................9
Targeting..............................................................................................................................10
Targeting Strategy............................................................................................................10
Identification of target market:.........................................................................................11
Positioning............................................................................................................................12
Positioning Strategy:........................................................................................................12
Positioning matrix............................................................................................................13
Marketing Objectives...............................................................................................................13
Marketing Strategies: 7Ps of marketing...................................................................................14
Product:................................................................................................................................14
Price:....................................................................................................................................15
Place:....................................................................................................................................15
Promotion:............................................................................................................................16
People:..................................................................................................................................16
Process:................................................................................................................................17
Physical evidence:................................................................................................................17
Marketing tactics......................................................................................................................17
Marketing Schedule.................................................................................................................18
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Budget......................................................................................................................................20
Conclusion................................................................................................................................22
References................................................................................................................................23
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Introduction
This marketing report will give knowledge about the Australian company Bega Cheese,
which is mainly a company which produces cheese at an effective rate and also of premium
quality. This company offers retail cheese as well as the processed cheese also to the
customers. This company alone holds the 15.7% market of the retail cheese in Australia. The
company collects almost of its 40% revenue from the products like cream cheese, powdered
milk, cheese and many other nutritional products. Bega Cheese Limited recently announced
deal of A$460 million with the multinational food company Mondelez International, on 19th
January 2017 (Begacheese, 2019). This is one of the potent cheese companies or the business
groups in Australia which has a great impact on the economy of the country too. The
importance of the marketing tactics behind the success of the company is also described in
this report. This report also presents an overview of the various kind of segmentation and also
recommends to the company follow the demographic segmentation.
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Identification of issue
The issues that Bega Cheese Limited has been experiencing in recent years have been
described below:
 Decrease in revenue growth from 7.4% to 2.5% after the contract expiration with
Coles (Begacheese, 2019).
 The decline of cheese sales by supermarkets, although they form the majority of
cheese sales in Australia compared to online retailing, which is increasing but is
miniscule as compared to sales from supermarkets (Hutchinson, 2016).
 Low nutritional value in the Tasty Cheese product when compared to its competitors.
 As Australia is becoming more health conscious, the low nutritional value does not
attract customers, and they look for other natural alternatives from Woolworths whose
tasty cheese has almost double the nutritional value.
 The Product forecast for the Bega is weaker as it is never the first to produce a new
and innovating product and also lacks in marketing their products when compared to
other competitors.
 The packaging and branding are essential for distinguishing from competitors and
Bega requires a clean and distinct packaging of its cheese.
Summary of the market situation
The main portion of Australia's cheese sales is done through supermarkets, although there are
some contradictions in these statistics based on the source (Mhurchu et al. 2016). It is
estimated that if supermarkets are able to increase their demands, that would greatly benefit
the cheese manufacturers of the country, especially Bega Cheese Limited. However, in the
last few years, market research has indicated a steady decline of cheese sales by the
supermarkets. On the other hand, although online and internet retailing only comprises of a
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minor percentage of cheese sales, it has shown a significant increase in sales value from
2015-2019 (Austrade, 2019). Experts say that excessive use of social media and technology
in recent years is responsible for this increase in sales value of online retailing. Future
estimations from market research indicate that this increasing rate of sales trend would
continue as long as suppliers and retailers are focused on home delivery services which is
convenient for the customers (Lindberg et al., 2017).
Furthermore, market research also shows that the revenue of Bega industry should grow by
3.2% annually although when compared to other competitors and rivals in the cheese industry
the growth of Bega industries can be considered as underperformance. In the financial year of
2016-2017, the shares of Bega have seen a dramatic increase after its agreement with
Fonterra and Mondelez International (Begacheese, 2019). For the last five years, the contract
of Bega with Coles has also resulted in the expansion of Bega; however, since the expiration
of contract in 2016, the cheese range sales have again decreased. Even recent collaboration
with Woolworths in 2016 was unable to stop the dropping sales value which resulted in only
a 2.5% increase in revenue compared to the 7.4% increase the previous year during the
collaboration with Coles (Annualreports, 2019).
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STP analysis
Figure 1: STP analysis
Source: (Camilleri, 2018)
Segmentation
Figure 2: Market Segmentation Approaches
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Source: (Camilleri, 2018)
Geographic:
In the geographic segmentation part, the company may consider on the nation and countries
as a geographic segment. It is very much necessary for the company to expand its business to
the various countries as well as in new markets also in order to achieve growth or
proliferation. The company Bega Cheese Limited recently expands its business in the
developing market of Indonesia. This kind of underdeveloped countries has a huge
population (Cross et al. 2015). For that reason, the Company can easily convert the huge
population of Indonesia to a huge customer base in order to achieve growth.
Demographic:
Demographic segmentation is also a necessary thing for a company. Demographic
segmentation includes the age, income, gender and also education as key factors. The
company the Bega mainly produce cheese products, which is a needy food in order to meet
its nutritional requirements. For that reason, the products of the company are mainly
consumed by the customers of above 10 years of age (Begacheese, 2019). However, the
products are also consumed by the male and female both. In that event the income of a family
also have a role, to consume the quality products of the company Bega, a family or a person
should have an income between the range of medium to high. However, education also have
a role, the customer should have enough education to understand the nutritional value of the
cheese and other products.
Psychographic:
Psychographic segmentation also plays a very much important role. The psychographic
segmentation includes the social class and the lifestyle as the key factors (Hardcastle and
Hagger, 2016). The consumers or the customers of the company mainly belong to the class
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range of medium to the upper class in society. The customers also mainly try to lead a healthy
lifestyle and a conscious life also about proper nutrition. However, this kind of segmentation
is noticed among the consumers of the company and the research work related to the
segmentation can have an impact on the growth of the company.
Behavioural:
The various qualities of the consumers mainly create this segment. The behavioural segment
mainly includes knowledge and use as the key factors (Dibb and Simkin, 2016). The
knowledge about the food and their nutritional value has a great impact on the purchase event
of a purchaser. For that reason, the regular and potent consumers of the company have
enough knowledge about the products of the company, and also their uses enhance the
segmentation event. These kinds of segmentation events can be very useful if the company do
research upon them and implement necessary steps if needed.
Recommendation
Among all segmentations, the most important segmentation is the demographic segmentation
and if the company take the necessary steps to meet the key factors of this segment, then the
company will be benefitted.
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Targeting
Targeting Strategy
Figure 3: Targeting Strategies
Source: (Camilleri, 2018)
The company Bega Cheese Limited should follow a specific market strategy in order to
achieve growth. The strategy for the company must be set according to the key factors of the
demographic segment which include the customers of above 10 years of age. However, the
products are also consumed by the male and female both.. As this segment has a huge impact
on the growth of the company (Kozubíková et al. 2015). The company should target various
markets along with market-specific offers and services. This will be immensely helpful for
the company.
Identification of target market:
Category Target markets
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Target location The company should target developing countries
in order to get a huge customer base.
Age The consumers are mainly lying between the age
group of 10-60 (average), so the company should
target peoples of this age group in order to get
more profit.
Gender The products of the company consumed by both
male and female. So in a new market or the
existing market also, the company should target
both male and female consumers.
Income In order to buy the products of the company
regularly, the income of a family is a major factor
influencing the sales (Bono et al. 2016). So the
company should target families or peoples who
fall under this income category.
Food consciousness Food-conscious consumers have the potentiality
to understand the nutritive value of the products
of the company, and eventually, they become
regular customers (Ghvanidze et al. 2016). So the
company should target food conscious people,
who are able to understand the nutritive value of
the foods.
Social class The consumers of the company mainly lie
between the social class range of medium to
upper class, so the company can target peoples
under this class range to get more profit.
Lifestyle The consumers mainly want to lead a healthy
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lifestyle, so the company should target customers
who are interested to lead a healthy and balanced
lifestyle.
Knowledge The company also may target customers who
have the knowledge about the quality nutrition of
any food, so that they can be converted to the
potent customers
Table 1: Target market for the company
Source: Created by author
Positioning
Positioning Strategy:
An effective positioning strategy helps the company to choose one or two important key
areas to concentrate and also to excel, and these key areas are determined with the help of the
analytical event about the strength and weakness of the company (Guo et al. 2018). For the
company Bega Cheese Limited, these two key factors are the price and the product quality.
The company supplies all of its products in an effective price range and also keeps the
product quality high. So the company gives a premium and also super premium quality in an
effective price range or behind the so-called high price range. This kind of key factors mainly
attracts customers and also makes the company much more profitable.
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Positioning matrix
Figure 4: Positioning matrix
Source: (Created by author)
Marketing Objectives
 To determine the new market demand as well as demands of the existing market and
implement strategies according to this.
 To achieve much more growth and success.
 To expand the business in many new places which eventually make the company
multinational.
 To get knowledge about the sale of the products and also to determine new strategies
to enhance the sale.
 To get knowledge about new technologies which can be implemented in order to gain
a competitive advantage in the age of competition?
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Bega
Cheese
Ltd.

Marketing Strategies: 7Ps of marketing
Figure 5: Marketing mix strategies
Source: (Mallik and Farhan, 2018)
Product:
The premium or super premium quality products can be supplied at an effective price range
with the help of new and innovative technologies (Mallik and Farhan, 2018). So, the
company should implement new and innovative technologies in order to produce super
premium quality products at a very nominal cost, which eventually helps the company to
achieve growth. This kind of things also gives the company a certain amount of competitive
advantage, in the market of competition.
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Price:
An effective customer centric price of a product not only attracts the customers but also
provides a competitive advantage in the market of competition. For that reason, it is
necessary to keep the price of the product low, so that it can attract the customers. However,
to set an effective price range of a product in a specific market, the company must implement
some strategies like the implementation of new and innovative technologies which eventually
lowers the making cost market analysis (Veselovsky et al. 2017).
Place:
The company should introduce an e-commerce website so that the customers can buy
products directly from the company. This can be beneficial for the company as these kinds of
online stores promote the business of the company and also takes an active part to improve
the brand value of the company (Sharma and Lijuan, 2015). The company should open an
online store from which the whole world can access the products of the company and also can
purchase that.
Promotion:
The promotional event is a necessary and very important event for the growth of the
company. The company can conduct the promotion of its products through various types of
advertisements like advertisement on television, in the local newspaper. The company also
can do promotion in social media platforms like Facebook, Twitter and others (Kim and Kim,
2018). Many attractive offers also can be implemented in order to attract people or new
customers. However, these offers or packages also demand to advertise in order to achieve
much more profit from them. The company Bega Cheese Limited also can implement the
way of digital media marketing in order to advertise their products and offers, so that the
company can get customers throughout the world.
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People:
The employees and the workers of a company play an important as well as crucial role in the
success pathway of a company. The management section or the sector of the company also
plays an important role in the success of the company. The management system should be
well developed and systematic in order to maximize the output of the employees. However,
the HR manager also should be well qualified and also skilled in order to maximise the usage
of the resources of the company (Gibbs et al. 2015).
Process:
The company also should keep their service updated which is relevant as well as related too
with the industry. This kind of processes has an important value in the growth of the
company. However, the updated processes which are mainly performed in a significant way,
which can be the reason of difference with the other companies in the industry (Harmon,
2019). For that reason, mainly, the process should keep updated and also the employees
related to this kind of process should be selected carefully by the authority of the company.
So, it is important to maintain this kind of processes along with their expected quality.
Physical evidence:
The physical evidence should include the e-commerce website and stores where the
customers of the company could be able to get the products (Benett, 2019). The physical
evidence of a company should be maintained in a smart way which may be much more cost
saving and also will give a certain amount of competitive advantage on the onset of
competition. The physical evidence of the company Bega Cheese Limited should be
maintained carefully so that it can give the customers faith in the company and also can
create a comfort zone for the customers. Various kinds of facilities should be implemented in
order to maximize the result of physical evidence as well as to minimise the cost of
maintenance.
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Marketing tactics
Marketing tactics are mainly marketing strategic actions which help the company to make the
direct promotion of a specific product or a service (Isselmann et al. 2017). This kind of
activity surely plays a crucial role in the promotional event or the promotion of the product of
the company, which may be the promotional event for the company also. However, this kind
of marketing tactics is ideal as well as crucial too in order to achieve marketing goals or
strategic goals. The improved or updated marketing tactics can give the company a certain
amount of competitive advantage on the onset of competition so that the marketing tactics
play a very much important role for the company Bega Cheese Limited also.
However, the promotional event of the company can be done in the offline mode and also
online or through the internet or social media (Cant, 2016). In these types of promotional
events, the company mainly promotes its products, unique offers, and effective price range
and also customer-centric service, which eventually attracts the customers of the existing
market as well as the customers of the new markets. For this kind of promotional events, the
presence of improved and dignified marketing tactics is the mandatory thing, in order to
achieve the strategic or marketing goals through advertising or through these kinds of
promotional events (Sheth and Kim, 2018). The company also should select the segmented
marketing strategy which is described in the above portion. For that reason, the company
should implement a market-specific strategy which can be determined by the market analysis
of that specific market. For this kind of marketing strategy, the presence of strong marketing
tactics is the mandatory event as the company should promote its products and services in
each market. These promotional events should have market-specific contents and services
and also the marketing tactics, which played its role in the market specific promotional event
of the company.
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Marketing Schedule
Activities Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Strategy for
increasing the sale
Conduction of
survey for collecting
the response
Taking the opinion
of stakeholders
Estimation of the
share prices for the
brand
Table 2: Marketing schedule for the company
Source: Created by author
The strategy regarding the increase in sale will indicate the required steps for the
development of the brand name (Steenkamp, 2017). Apart from that, this will also help the
organization to reach to a large number of consumers in the organization. Apart from that, the
organisation can explore new marketing strategies like digital marketing for getting more
exposure.
The conduction of the survey will help the organization to understand the certain
requirements and demands of the organization so that the organization can provide service to
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the consumers accordingly. This will eventually help to increase the revenue of the
organization. Apart from that the innovation of the products can be achieved from these
initiatives.
Apart from that, before the initialization of the project, the opinion of the project stakeholders
is needed to be taken into consideration (Derakhshan et al. 2019). The stakeholders can be
both internal and external. This will help the organization to maintain clarity in
communication. Apart from that, the development of the marketing plan can be done in a
proper way.
After the implementation of all these marketing strategies, the estimation of the share prices
is needed to be done in a proper way. The estimation of the share prices is based on the
selling of the products in the market and the goodwill of the company in the market.
Budget
Resources/ Activities Total Estimated Cost
(AU$)
Product development and distribution
Product design 50,000
Product development 2,00,000
Packaging 50,000
Logistics and Distribution 75,000
Marketing and Advertising
Bill boards 20,000
Newspaper advertisements 10,000
Television and radio Commercials 30,000
Social media marketing 25,000
Website marketing 10,000
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Event planning 20,000
Event launch 1,00,000
Total 2,90,000
Table 3: Proposed Budget
Source: Created by author
In this section, the budget of the company is described in detail along with the required
development of the product and distributions and their related costing. The company mainly
manages its resources carefully like the company give various amounts behind the
promotional event like website marketing for A$10,000 and event planning for A$20,000 and
various others. The company requires a total amount of A$2, 90,000 for all of the activities
mentioned in the chart. It is also a sign of the presence of a good resource management
system which mainly helps the company to manage its funds in the right way as well as in the
well-directed way.
Conclusion
At the end, this marketing report mainly provides deep knowledge about the Australian
company Bega Cheese Limited and also provides knowledge about their products and their
existing markets and also about their revenue or the growth. This report also contains the
mostly suitable marketing strategy for the company Bega, which help the company to
proliferate further. However, this report also contains some objectives and some
recommendation to achieve the objectives for the company, like improved promotional
events, improved product quality at an effective price range and many others. However, the
importance of the marketing tactics behind the success of the company is also described in
this report.
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