Marketing Situation Analysis: Strategies for Bega Cheese Ltd Growth

This marketing report provides an in-depth analysis of Bega Cheese Limited, an Australian cheese producer, focusing on its market position and strategies. The report identifies key issues such as declining revenue growth and the need for improved nutritional value in its products. It includes an STP (Segmentation, Targeting, and Positioning) analysis, recommending demographic segmentation to target customers effectively. The report outlines marketing objectives and strategies based on the 7Ps of marketing (Product, Price, Place, Promotion, People, Process, and Physical Evidence), offering recommendations for product innovation, pricing strategies, and market expansion, including e-commerce solutions. The analysis also incorporates a marketing schedule and budget considerations, concluding with strategic recommendations to enhance Bega Cheese Limited's market performance and competitive advantage. This document is available on Desklib, a platform providing solved assignments and study tools for students.

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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