Monde biscuits sales promotion plan summary of facts



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Case Analysis: Monde Biscuit - Sales Promotion Plan


MONDE BISCUITS
SALES PROMOTION PLAN

SUMMARY OF FACTS:


Company Background:
Monde Nissin Corporation (MNC) has been incorporated in 1979 and has continuously provided Filipino consumers high quality products and has been a consistent top biscuit player in the market. For more than two decades, MNC has steadily and aggressively risen to be the Philippine’s leading food manufacturer and is carving its niche as one of the most competitive players in the global industry. From its first biscuit, MNC has evolved into a premier food firm.

Currently, MNC has been producing biscuits and cookies and has a nationwide reach for its distribution channels from supermarkets down to the sari-sari store. To compete with the crackers product line, MNC through its sister company Monde M.Y. San Corporation is a major player in the crackers category.


Monde M.Y San Corporation is a Filipino firm originating from an ice cream parlor situated in Escolta in 1935. Three Chinese brothers headed by Mar Yu San, sparked the M.Y. San legacy of creating and baking premium food products.




Monde Product Offerings:
List of Monde Biscuits with Gross Price and Unit of Measure:

PRODUCT

FLAVORS

GROSS PRICE

UNIT

1-1 Rice 56g x 10’s

Chili, Original

375.26

Case

1-1 Snowy 92g x 8’s

Chili, Original

549.69

Case

Bingo 28g x 30 x 10’s

Choco Mint, Double Choco, Orange, Peanut, Vanilla

841.24

Case

Bingo 84g x 60’s

Double Choco, Peanut, Vanilla

478.14

Case

Breadstix 130g x 30’s

Chiz, Regular

361.96

Case

Breadstix 20g x 10 x 10’s

Chiz, Regular

280.41

Case

Breadstix 35g x 60’s

Chiz, Regular

244.33

Case

Butter Coco 10g x 24x 12s




341.44

Case

Butter Coco 90g x 60s




478.14

Case

Cubes 25g x 60s

Choco N Cream, Vanilla

311.13

Case

Eggnog 13.5g x 20s

Choco, Regular

312.37

Case

Eggnog 18g x 100s

Choco, Regular

280.41

Case

Eggnog 32g x 60s

Choco, Regular

259.79

Case

Puffins 50g x 60s

Butter, Cinnamon

716.29

Case

Snack Pie 100g x 12’s

Butter, Cinnamon

195.84

Case

Sumo Hoops 18g x 4x 10s

Choco, Milk, Peanut, Strawberry

672.99

Case

Tini Wini 36gx60s

Choco Fudge, Cookies N Crea, Strawberry

349.48

Case

Wafer 11.5g x 20’s

Choco, Vanilla, Yummy Butter

474.23

Case

Voice 25g x 30 x 10s

Butter, Choco, Peanut

841.24

Case

List of Monde M.Y. San Biscuits with Gross Price and Unit of Measure:



PRODUCT

FLAVORS

GROSS PRICE

UNIT

 Bakers Graham 400gx14s




508.76

Case

 Brownies 100gx24s




461.69

Case

Butter Cookies Plastic 800gx12s




1,349.57

Case

Chips’n Nuts 100gx24s




452.54

Case

Chips’n Nuts 25gx12s




892.69

Case

Crushed Grahams 200gx24s




486.43

Case

Fita Carton 150gx54s




486.43

Case

Fita 25gx24x10s

Choco, Mocha, Regular

672.99

Case

Fita Plastic 600gx12s




1,201.61

Case

Fita Singles 8.5gx20x20s




326

Case

Fita Slugs 80gx40s




318.76

Case

Fita Spread 25gx24x10s

Bacon, Strawberry, Tuna

679.99

Case

Graham Honey Singles 300s




841.24

Case

Graham Plastic 700gx12s




1,201.61

Case

Grahams Choco Handy Pack 24s




512.91

Case

Graham Choco Singles 300s




896.91

Case

Handy PK Sky 100gx50s




508.25

Case

Handy PK Sky 200gx40s




725.77

Case

Happy Time 1.5kgx4s




667.51

Case

Honey Graham 200gx24s




466.14

Tin

MY San Bakers Graham 6s




557.47

Case

Skyflakes 25gx30s10s

Original, Garlic, Onion

841.24

Case

Skyflakes 360s




1,009.48

Case

Skyflakes Plastic 850gx12s




1,201.61

Case

Source: Monde Nissin Corporation, August 2007
Monde Biscuits Distribution Channels:
MNC prides itself with an efficient sales force that ensures nationwide distribution. The outlets being served are as follows: wholesale, distributors, sub-distributors, supermarkets, convenience stores, and groceries. The distributors handle the orders of smaller retailers and sari-sari stores.


Monde Communication Channels:
Monde Biscuits are being advertised through television and radio. MNC rarely uses prints and billboards to communicate ots products to consumers. To name a few of its latest television ads, some 30-second commercials were done for Sky Flakes, Fita, Bingo Peanut Butter, and Bingo Choco Mint


Competitive Landscape
The Biscuits industry players are divided into three groups: Large Manufacturers, Neighborhood Bakers, and the cottage or backyard producers.

There are at least 16 large manufacturers of biscuits and cookies in the country. These include companies that are also known to product other food products directly or through their affiliates. The entire industry was estimated to be P4.4 billion as per the NSO’s data last 2003.


According to an industry player, the biscuits and cookies market is concentrated among four major players, namely: Monde Nissin Corporation together with subsidiary Monde M.Y. San Corporation, Rebisco and URC. Overall, MNC and Monde M.Y. San Corporation are estimated to hold 40% of the entire biscuits and cookies market while Rebisco Captures 25%, URC, 16% while other companies share the remaining 19% of the market.


By product type, sources say crackers (Sku Flakes, Magic Flakes, Blueskies, etc) are the best selling Variety followed by sweet biscuits (e.g. Eggnog, Marie, etc), and wafers (e.g. Tini Wini, etc).


In 2004, majority of these companies registered double-digit sales growths, with the highest posted by First Choice Food Corporation at 80.9%. Croley Foods Manufacturing Corp. recorded 26.9% increase in sales while Rebisco posted 23.5% and Monde M.Y. San Corporation improved by 13.8%. Here is a summary of revenues by selected players (in Million PhP):



COMPANY

2003

2004

Croley Foods Manufacturing Corporation

181.6

230.5

Felicisimo Martinze & Co. Inc.

54.2

49.9

First Choice Food Corporation

271.4

491.1

Grand Alphatech International Corporation

162.2




Metro Biscuit Corporation

36.4




Monde M.Y. San Corporation

2,761.6

3,413.5

Republic Biscuit Corporation

337.8

417.1

Rits Food Product Corporation

16.8




Among the top players, MNC’s top three competitors are: Republic Biscuit Corporation, Universal Robina Corporation and First Choice Food Coporation.




DSTEP Analysis
Demographics:
The demographics who patronize biscuits are people coming from the ABCDE market and brands being purchased are relative to the socio-economic profiles. Also, research findings show that biscuits are impulse-buying items because a person needs not to think long to purchase one. Consumers easily switch from one brand to another. Brand loyalty is rarely seen in the biscuit category.


Social:
The biscuit industry, specifically crackers, is now being seen as an alternative for “meryenda” and viewed as a healthy source and substitute for fatty foods. People who are into the ‘alternative’ lifestyle and who seeks a good low-in-calorie snacks are the social group that the biscuit industry is serving.


Technology:
Due to the increase of competitors, technological change was seen through the cutting edge research and development departments created by these companies to create innovative products to serve the Filipino consumers better. More variations are now present to distinctly stand out from competition.


Economic:
There is an issue that the growing consumer spending for transportation and communications attributed mainly to spending on cell phone cards which are eating into the consumer’s limited disposable income. However, MNC sees the country’s economic difficulties could be an opportunity for growth as more consumers turn to biscuits and cookies as an alternative “merienda” meals.


Political:
Due to the rising cost of raw materials such as flour and sugar, packaging materials, fuel, and electricity costs, MNC finds it challenging to reach its targets since Monde biscuits highly depend on volume to be able to generate good profit. And there are no current legislations that help brings down the prices of these basic commodities.


STATEMENT OF THE PROBLEM:

What Sales Promotion campaign can Monde take in order to increase their revenues by the end of 2005?




PRIMARY TARGET MARKET

Socio-economic class CDE looking for an alternative and affordable source for snacks. These are the people who are budget conscious and would choose value for money VS high quality.




KRA/KPI AND OBJECTIVE
Key Result Area: Revenues
Key Performance Indicator: Increase in total sales and volume
Objective: To increase revenues by 30% by the end of 2005.[1]


SALES PROMO OPTIONS


Consumer Promotions Options:
Option 1: Buy one Get one FREE with front aisle location at major supermarkets (Price packs + Point of Purchase Strategy)
Rationale: Since biscuits and cookies are items that don’t really need a lot of time for thinking, the purchase decision would most likely be a factor of price and visibility. Purchasing a premium spot in major supermarkets will ensure visibility while a Buy One Get One Free promo might induce consumers to purchase specially in the last minute where they are about to pay for their groceries.
Pros: High visibility and sales promo is volume-based promo so higher chances of purchasing two or more items VS a single pack.
Cons: Premium spot is expensive.

Option 2: Limited Bundled Snack Box (Cross-Promotions Strategy)


Rationale: Combining several items in one snack box would increase chances of purchase VS competition that offers one item per pack. This promo aims to target people who wants variety in their purchased goods and combining Monde biscuit brands maybe able to persuade them to switch.
Pros: Targets a market that patronizes variety. Bundling non-performing goods will be disposed as well as induce trial.
Cons: Bundled items may not be the items consumers’ want. So choosing the right items to bundle is the key. 

Option 3: For Every Purchase of 2 packs SkyFlakes, customer gets a FREE sports tumbler (Premiums)


Rationale: Skyflakes is one of the top performing brand of Monde biscuits and is also viewed by many as a ‘diet’ food that can be taken in replacement of the traditional fatty merienda. Offering a premium item in line with the “active lifestyle” and “weight management” positioning, the premium item might pull consumers to purchase more crackers.
Pros: Offering a premium item per 2 packs of skyflakes will significantly increase volume sales since people are drawn to getting the sports tumbler. This is also a good strategy to penetrate the ‘health’ conscious market who are still not buying skyflakes for their merienda.
Cons: Limited stocks of premium items might upset consumers and therefore switch to other brands.

Option 4: Get a chance to win PHP1,000,000 for every pack of Monde biscuit purchased (Prizes: Contests)


Rationale: Offering 1,000,000 pesos will be a good come-on for all consumers. It can encourage other consumers to switch to a Monde brand. This is also beneficial for the sari-sari stores since it can target the “tingi” or per-piece market.
Pros: Offering it in a limited time will help stimulate the market and therefore increase the sales of Monde biscuits. It is also helping the sari-sari stores to sell their Monde brand products.
Cons: Contests entails permits, the selection process for the winner, and the execution of the event nationwide. And doing a contest means it needs advertising to help communicate the new promo.


Trade Promotions Options:

Option 7: Retailers 4% straight discount off the price list on each case (Price Off)


Rationale: In order to stimulate volume purchasing from retailers, a 4% straight discount will be offered so that each retailer is encouraged to purchase more than what they are usually purchasing.
Pros: Sales by volume will increase.
Cons: Retailer acceptance might not be as expected. Distributors may not offer the 4% discount.

Option 8: For every case of Monde biscuits purchased, Distributors will get extra case at no cost. (Free goods)


Rationale: An extra case of goods can stimulate more purchase from distributors. Can be used to encourage distributors to push the products to their retailers.
Pros: Distributors will actively seek retailers to dispose the extra cases to earn twice rather than the standard sale.
Cons: Distributors might horde products.
RECOMMENDATIONS

Upon reviewing the alternative sales promotion options, Option 1, Option 4 and Option 7 will be taken into consideration.


Combining a consumer promotion with a trade promotion will potentially increase the push-and-pull power of the Monde brand. Consumers will be offered a very appealing promo while the trade is encouraged to sell more since the higher the volume, the larger the profit is for this type of goods which is volume-driven.




PROGRAM MECHANICS

Option 1: Buy one Get one FREE with front aisle location at major supermarkets (Price packs + Point of Purchase Strategy)


 Premium point-of-purchase locations will be rented by MNC to feature top performing brands as well as non-performing brands to meet two objectives: Increase sales volume for top-performing brand and induce trial for non-performing brands.
 All major supermarkets and grocery stores will be selected for this promo (SM, Rustans, Robinsons, PureGold, Cherries)
 Timeframe: 2 months interval (except months with other promos are running)
 Bundling can either be top performing brands + top performing brands OR one top-performing + one non-performing brand

Option 4: Get a chance to win PHP1,000,000 for every pack of Monde biscuit purchased (Prizes: Contests)


 For every pack of Monde biscuits (any brand), consumers are eligible to win PHP1M.
 Packs will be printed with special seals showing that the pack has a promo code that can win PHP 1M
 One winner will get a chance to win PHP 1M
 Secondary prices will be raffled as follows: 500K, 250K and 5 winners of 50K, 50 winners of 10K (Total prize: 2.5M pesos)
 Retailers are not eligible to win as well as family and relatives up to 2nd degree of MNC and M.Y. San employees.
 Time Frame: 3 months
 MNC and M.Y San will print 5million specialized packs containing unique promo codes.
 Electronic Raffle will be made every month leading to the last month which is offering the PHP1M prize.

Option 7: Retailers 4% straight discount off the price list on each case (Price Off)


 Distributors will be given 5% discount for ever case sold to the retailers
 Retailers can purchase as much as they can depending on stock availability
 Straight discount will be implemented for retailers and distributors
 Time Frame: Will be implemented during lean months as well as together with the option 4 sales promotion.


OPERATIONAL PLAN
The price packs and POS initiative will be implemented five months in a year. Jan and February since these are the month people usually budget their money due to the sudden increase of purchases from the previous months as well as the non-stop party. We can target consumers who want to lose weight after the holiday food fest.
Late October to November and December would be the month to target people who will be spending during all soul’s/saint’s day as well as for the Christmas holiday where people are receiving their 13th month pay.
The Retailer Price Off campaign will start from March to July to prepare them to sell more as soon as we launch the Consumer Contest. March and April is perfect for summer (can be positioned as a good ‘diet’ food) and May to July would be the months were the specialized packaged will be distributed to all distribution channels.


Action Plan:

Activity

To Dos

Person Responsible

Feedback Mechanism

Price Packs + POS

Coordinate with Supermarkets

Marketing

Signed Contracts




Create Merchandising Materials and POS design

Marketing and Purchasing

Contract from supplier and design from creative

Retailer Price Off

Coordinate with promo to Distributors

Trade Marketing

Signed agreement from Distributors




Roll out to Retailers

Distributors

Total number of purchase orders

Contest

Advertising

Marketing and Ad Agency

Schedule of announcement and creative




Production of specialized packs

Marketing and Purchasing

Manufacturing plant’s signed contract and estimated date of shipment




Electronic raffle draws

Marketing

Contestants claiming the prizes

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