Marketing Report: Pioneer Foods Group Marketing Strategy and Analysis

This report provides a comprehensive analysis of Pioneer Foods Group, a prominent fast-moving consumer goods (FMCG) company in South Africa. The report examines the company's marketing mix, including the 4Ps and 4Cs, and evaluates its competitive advantages and differentiation strategies. It delves into the concepts of commoditization, total product offerings, and solution offerings. The analysis further explores market segmentation, the management of the service element, experiential marketing, customer relations, and the use of the internet in marketing. Additional topics covered include pricing and cost structures, branding, sustainability, and the impact of stakeholders. The report also provides insights into the company's product portfolio, distribution channels, and promotional activities, offering a detailed understanding of Pioneer Foods Group's overall marketing approach and its strategic positioning within the South African market.

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Abstract:
The report aims at providing an insight into Pioneer Foods Group one of the prominent fast
moving consumer goods (FMCG) company of South Africa. The company was created as a
result of the merger between two of the packaged food companies of South Africa, Bokomo and
Sasko in the year 1997. Sasko which became known as the ‘Essential Foods’ and Bokomo which
came to be known as ‘Food and Ceres Beverage’ had been consolidated under a single structure
of management and came to be known as the groceries. The international portfolio of the brand
remains a well-established unit that boasted of prolonged standing relationship in key markets
for exports. The operations related to fruit snacking and breakfast cereals were however carried
out in UK. The mission of the company lies in nourishing the lives with well-loved and trusted
brands thereby empowering the families in deriving more from life. The report addressed a wide
range of non-financial and financial information for enabling the stakeholders and consumers in
making informed decisions with regard to the future strategies.
The report commences with an analysis of the marketing mix along with an evaluation of
competitive advantage and differentiation. The report also provides an insight into
commoditization and the overall product as well as the solution offering of the firm. The report
further acknowledges the aspect of segmentation and provides an insight into the service element
of the firm. There is also discussions on the experiential marketing, experience management and
the customer relations. In addition to this, the report also draws attention to the use of the internet
in the marketing, pricing and the cost structure, branding along with an insight to sustainability,
TBL and the stakeholders.

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Table of Contents
Introduction:....................................................................................................................................3
1. The Marketing Mix: The 4’Cs and 4P’s......................................................................................3
2. Differentiation and Competitive Advantage:...............................................................................5
3. Commoditization and Total Product & Solution Offering..........................................................7
4. Segmentation:..............................................................................................................................8
5. Management of the Service Element:..........................................................................................9
6. Experiential Marketing, Customer Relations and Experience Management.............................12
7. Use of Internet in Marketing......................................................................................................13
8. Pricing and Cost Structure:........................................................................................................14
9. Branding:...................................................................................................................................17
10. Sustainability, TBL and Stakeholders.....................................................................................19
Conclusion:....................................................................................................................................21
References:....................................................................................................................................22
Bibliography..................................................................................................................................26

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Introduction:
The objective of the report is to provide an insight into Pioneer Foods Group. The
primary business of the company lay in producing, distributing, marketing and selling of varied
range of beverage, food and the related products with the aim of enabling the consumers in
leading better lives. Some of its competitors includes Premier Foods, Associated British Foods,
Greencore, Pinnacle Foods, Tiger Brands, Snyder's-Lance, Samworth Brothers, 2 Sisters,
Alvarado Street Bakery and Hovis
1. The Marketing Mix: The 4’Cs and 4P’s
The four Cs of marketing includes:
1. Customer Needs and Wants: This refers to understanding the customer needs as well
as their wants (Londhe 2014). Pioneer Foods Group focuses on nourishing the lives of customers
according to their needs with trusted brands categorized under the essential food and groceries
that helped in empowering the families. This has been found to be backed by motivated
employees, excellent management and the world class facilities.
2. Cost: In addition to the price of the product, it also takes into account the time taken
by customers in getting to the location to get the product or the amount spent on gas for reaching
the location (Khan 2014). This also includes benefits of product offered. Pioneer Foods Group
delivers food products that aids the families in leading a healthy life. The firm also puts forward
enhanced means of distribution, marketing and production along with undertaking an export
across 88 countries for providing easier access to products.
3. Convenience: It is a more customer oriented method that focuses on whether the
customers can opt for shopping online or in the stores. Pioneer Foods Group makes it products

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available both through online as well as in the stores. This has enabled it in overcoming the
challenging economic conditions that put pressure on the willingness of consumers in making a
purchase.
4. Communication: Communication requires interaction between the buyer and seller.
Pioneer Foods have always valued transparent as well as open communication with the
customers through advertising, one to one interaction, brand and corporate websites, customer
care centers and the social media platforms.
The four P’s of Marketing include:
1. Product: Pioneer Foods has its products categorized under essential foods and
groceries. The essential foods primarily includes wheat flour, baked goods, rice, pasta, maize
products and dried vegetables under the brand name Sasko, White Star and Spekko. On the other
hand the groceries section includes dried fruit, baking aids, breakfast cereals, salads and meals,
deserts, nuts, base flavor, rusk, snack bar, frozen food and condiments under the brand name
Liquifruit, Weet-Bix, Ceres, Bokomo and Safari (pioneerfoods.co.za 2020).
2. Price: In essential food section, White Star Maize meal has been found to achieve fast
expansion of growth. This enhanced the popularity of the product mix along with its profitability.
The maize mea maintained status quo and had a price that was below leading brand. The product
however aimed towards being perceived as premium thereby targeting the maize meal consumers
who belonged to the lower and the middle class income groups. However, the refined maize
meal had been higher in price and had been considered as premium product. The maize meal
seemed to belong to the price sensitive market with the escalating cost passed on the customers.

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In the groceries section too, there was fierce competition between the cereal and the fruit
juice. The juice category was found to increase by 25 percent in value while the cereal category
rose by 20 percent. The sales volume of Liquifruit rose by over 30 percent while Weet-Bix rose
by 25 percent. Affordability remained the key drivers of growth in cereals with expanding levels
of profit.
3. Place: The product of Pioneer Foods is available in 88 countries across the world.
Besides, they are also available in large and medium retailers along with the metro stores.
Informally, they are also available across Kiosks and spaza shops (pioneerfoods.co.za 2020).
4. Promotion: Pioneer Foods Group carries out advertising via television, magazine,
radio and sales promotion. The firm uses advertising as the key medium to launch any campaign.
For instance, radio seem to have the highest frequency and reach for the target market of White
Star. The firm also undertakes promotion through print media for informing the educated class of
people. The firm also resort to sales promotion where consumers are provided a free sample
against a specific quantity purchased.
2. Differentiation and Competitive Advantage:
The differentiation of the Pioneer Foods lies in its brands, the people and the strategic
initiatives (Brenes, Montoya and Ciravegna 2014). The most prominent essential food brands of
the firm includes Sasko, White Star and Spekko while the grocery brand included LiquiFruit,
Bokomo, Safari, Ceres and Weet Bix. Some of the newer brands of the company includes John
West, Wellington, Mama, Today, Heinz and Big Jack. As far as the people are concerned, they
are not only smart but possess a tendency of winning. The strategic initiatives remains grouped
under the six different pillars which includes (pioneerfoods.co.za 2018):

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 Shaping a win-win corporate portfolio
 Focus on building of the power brands
 Embedding the strategic management of customers
 Resetting cost base and stepping productivity.
 Building of higher performance of team
 Adopting a practice of sustainability in all the practices.
The fast moving consumer good companies particularly the food and the beverage
business needs to undergo rapid evolution depending upon the trends of the changing customer
trends and expectations (Varley 2014). This enables them in attaining competitive advantage.
Pioneer Foods Group tries to attain competitive advantage by adopting bolt-on growth via the
mergers and acquisitions depending on the criteria of investment. The firm has also tried to
implement an agile as well as inclusive approach in addition to the operational activities
(Mncube 2013). The portfolio of products and brands of the Pioneer Foods Group always
remains under the review of the board and the management. The firm can be considered as able
and competent participant in the categories of staple food that remains associated with the key
food divisions depending on size of categories, market capabilities and the established
operations. However, the Pioneer Foods Group can attain competitive advantage by focusing on
the following areas (pioneerfoods.co.za 2018):
 Maintaining a captivating portfolio through continuous optimization of the brand and the
product mix.
 Leveraging the power brands, while continuously enhancing the growth prospects and
resilience
 Robustly managing the demands and upgrading the channels of distribution accordingly.

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 Rigorously managing the process efficiencies and the operating costs.
 Equipping the employees for a higher performance teamwork.
3. Commoditization and Total Product & Solution Offering
The rising cost of the electricity prices, spiral petrol prices, the newly implemented sugar
tax and the rise in VAT to about 15 percent has led to a financial squeeze thereby bringing about
a change in the food demands of South Africa. The consumers are now making tougher choices
thereby adjusting the consumer patterns for lower levels of the disposable income. These
structural impacts along with a weaker rand had showed signs of reducing the deflationary cycle
thereby pushing the economy towards inflation. This could be one of the reasons for
commoditization of the essential foods and the groceries put forward by Pioneer Foods Group.
Commoditization refers to the process through which the goods having economic value and
unique characteristics ends up as simple commodities not only in eyes of the consumers but also
the market (Holmes 2016).
The total food products included the essential foods comprising of the flour, wheat,
maize, bread, meal, rice, pasta and the dried vegetables. These products comprises of the daily
essentials and the value added foods of South Africa. The grocery division on the other hand puts
across wide range of South African branded beverage and food products along with the private
level products for the local retailers.
As a solution, it can be said that to ensure the medium and the long term success, it is
necessary for the essential food division to leverage the scale, reach and capacity along with the
differentiating strengths. Besides, the essential food division should ensure an unwavering focus

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on the brand relevance through maintenance of service, product quality, pricing and availability.
On the other hand, with the consumer demand at lower ebb, management of groceries must
focus on the improving margins through the enhancement of the productive capacity and the
efficiencies of the supply chain by looking for options related to the cost savings. On the sales
and the customer side, manager tweaks process and interface for enhancing in-store presence of
the Pioneer Food brands and on enhancing the competitiveness. The portfolio however remains
well balanced and remains prioritized for the purpose of investment into a growth oriented
capacity.
4. Segmentation:
This basically refers to the procedure of dividing the potential customers into segments or
groups based on the various characteristics. There will be four different types of segmentation in
case of the Pioneer Foods Groups which will include demographic, geographic, psychographic
and behavioral (Wilkinson 2013). The target market for the essential foods and the groceries are
mostly business to customers. The segmentation based on the above criteria are as follows:
1. Demographic:
i. Age: Most of the customers were between 7 years old and 55 years old.
ii. Income: Will target customers from lower to higher income groups
iii. Gender: Meant for the women as they do most of the grocery shopping.
iv. Ethnic: South Africa is a multi-ethnic country with majority of black population.
v. Family Lifecycle: This can be married, young single, with or without children,
separated or widowed.

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vi. Social Class: The trend setting, affluent and the emerging black people who falls in
the upper and the middle class.
2. Geographic: The products of the Pioneer Foods Group remains distributed to almost
all the provinces of South Africa. The firm also exports its products across 88 countries around
the world through the brand custodians and the strategic partners. Some of the countries includes
Nigeria, Algeria, Mozambique, Ghana, Botswana, Zimbabwe, Zambia, Mauritius, Namibia and
the Democratic Republic of Congo, Germany, North America, Switzerland, France, Netherlands,
Australia, New Zealand, United Kingdom, South Korea, China, Japan and Philippines.
3. Psychographic: The psyche of target market might be described as ‘Keeping with
times. The people are ambitious, highly driven and possess the energy of succeeding
professionally as well as personally (Motale, Bevan-Dye and de Klerk 2014). The targeted
individuals are also determined to portray to the world that they are successful in everything they
does right from the career, to the family, home and the social life.
4. Behavioral: Primarily comprise of the image conscious and the brand loyal customers.
5. Management of the Service Element:
This comprises of the four key elements which are mentioned as follows:
1. Service Culture: The service culture at Pioneer Foods Group is determined by
leadership principles, mission, vision and values (pioneerfoods.co.za 2020). As far as the
leadership principles are concerned, the chairman and his board decided on the strategy for
reviewing the strategic intent. The highest concern of the board lie in balancing portfolio with
regard to the conditions of trading. The board however looks forward towards the compliance of
the regulatory requirement with the business strategy. The board also conducts external audits

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and craft a comprehensive and robust strategy for steering the company into a flexible, faster and
innovative path of growth. The Chief executive officer mentions that present realities dictates the
portfolio expansion and potential acquisition that will ensure the alignment of the brand with the
product basket put forward by Groceries. He also mentioned that the board also takes care of the
long term incremental expansion into the chosen African geographies. The recent acquisitions
made in UK with regard to fruit snacking in UK are believed to generate positive results. The
Chief financial officer that Pioneer Foods Group has generated a healthy flow of cash derived
through the operating activities that combined with financial facilities for ensuring capital
requirements and the plans for expansion in future.
As far as the vision is concerned, the Group focuses on becoming one of the leading FMCG
Company of Africa (pioneerfoods.co.za 2020). The company however holds the mission of
nourishing the lives of the clients with well-loved and trusted brands that empowered the
families in deriving more from life. The values of the firm however lies in the following
(pioneerfoods.co.za 2020):
 Integrity: This refers to being transparent, ethical and honest
 Empowerment: This enables the people in growing, excelling and realizing the complete
potential
 Passion: This involves relentless pursuing of excellence.
 Accountability: This involves putting the action into words by displaying commitment
towards the brand represented by Pioneer Foods.
 Consumer focus: This involves prioritization of customers through building of
relationships and striving towards exceeding the expectations of the customers.
 Teamwork: This requires collaboration for optimizing the efficiencies across the business

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2. Service Quality: This comprises of strategies, process and performance management
system. The strategies of the firm includes (pioneerfoods.co.za 2020):
 Shaping the captivating corporate portfolio: This involves the continuation of
optimization of existing products, construct and the brand mix.
 Focusing on the building of the power brands: This involves strengthening the growth
and the resilience prospects of the power brands
 Embedding the Strategic Management of Customers: This involves the distribution of
the expansion channel.
As far as the process is concerned, the Pioneer Foods Group tries to create value from
the core activities of the business that inclues strategic sourcing, marketing, selling, production,
distribution of diverse food and the beverage products in coordination with the business
partners, service providers and the network producers (pioneerfoods.co.za 2020).
When it comes to the performance management system represented a program for
enhaning health and the safety skills of the staffs at the different manufacturing units along with
undertaking different occupationale safety and health training interventions
(pioneerfoods.co.za , 2020).
3. Employee Engagement: The firm has close to 8971 employees and hence the focus
area with regard to employee involves training, remuneration and initiatives related to the safety
measures (pioneerfoods.co.za 2018). The engagement platform included the email, intranet,
desktop screensavers, surveys, newsletters, face to face briefings, conferences, management
presentations, bulletin boards and the performance appraisal. In other words, the firm tried to
create value for the employees through the opportunities of the job, career opportunities,