Rafhan Custard Powder

UNILEVER PAKISTAN FOODS PVT LTD
Rafhan Custard
Report for the course Principles of Marketing
Rabia Hassan Jawad Hasan Syed Talha Izhar Ali Mohsin Maliha Ali Khan Mehdi Hydri
11/3/2011
This report has been made for academic purposes only. Any use of the information mentioned in this report for commercial purposes is strictly not allowed.
Rafhan Custard Powder
Table of Contents
Table of Contents.................................................................................................................2 1. Background......................................................................................................................4 1.1 About the Company...................................................................................................4 1.2 About the Product .....................................................................................................5 2. Industrial Analysis...........................................................................................................7 2.1 Analysis .....................................................................................................................8 3. Consumer Behaviour.......................................................................................................9 3.1 Cultural Factors..........................................................................................................9 Culture..........................................................................................................................9 Social Class..................................................................................................................9 3.2 Social Factors...........................................................................................................10 Word of Mouth..........................................................................................................10 Family........................................................................................................................10 3.3 Survey......................................................................................................................10 4. Defining Value...............................................................................................................12 4.1 Segmentation............................................................................................................12 Geo-demographical segmentation:............................................................................12 Psychographic Segmentation:....................................................................................13 Recommendations:.....................................................................................................15 4.2 Market Targeting.....................................................................................................15 Evaluating Market Segments.....................................................................................15 Selecting Market Segments........................................................................................15 Undifferentiated Marketing.......................................................................................16 Recommendations......................................................................................................16 4.3 Market Positioning...................................................................................................17 Identifying the Competitive Advantages...................................................................18 Selecting the Competitive Advantages......................................................................19 Product Line Differentiation .....................................................................................19 Service Differentiation...............................................................................................19 Channel Differentiation ..........................................................................................19 Image Differentiation.................................................................................................19
Selecting an Over All Positioning Strategy...............................................................19 Communicating and Delivering the Selected Position..............................................20 Recommendations......................................................................................................20 5. Creating Value...............................................................................................................21 5.1 Product.....................................................................................................................21 5.1.1 Major Brand strategy decisions........................................................................22 5.1.2 PLC Product is at maturity stage in its life cycle. ............................................22 5.1.3 Recommendations ............................................................................................23 5.1.4 Product Mix......................................................................................................24 5.2 Price.........................................................................................................................27 5.2.1 Pricing Strategy.................................................................................................27 5.2.2 Cost Strategy.....................................................................................................27 5.2.3 Product Mix Pricing Strategy............................................................................27 5.3 PLACE.....................................................................................................................28 5.3.1 Analysis of Distribution Channels....................................................................28 5.3.2 Distributors Network Add Value to the Channel..............................................28 5.3.3 Recommendations.............................................................................................30 6.0 Promotion ....................................................................................................................31 6.1 Marketing communication mix:...............................................................................31 6.1.1 Advertising........................................................................................................31 6.1.2 Sales promotion................................................................................................32 6.1.3 Discount ...........................................................................................................33 6.2 Recommendations....................................................................................................33
1. Background
1.1 About the Company
Rafhan Best foods Limited; an affiliate of Bestfoods, USA was acquired by Lever Brothers and renamed as Unilever Pakistan Foods Ltd. (UPFL) in 2007. Unilever is the leading consumer products company in Pakistan. A multinational deep rooted nationwide and a portfolio encompassing a wide product line of fast moving consumer goods. UPFL has brought high quality, great tasting and convenient foods to Pakistan that are enjoyed around the world. The seven trusted brands in the diverse product categories are as follows: Rafhan: Custard, Jelly, Pudding, Ice-Cream Powder, Kheer Mix, Corn Flour, Glucose-D, Jams, Corn, Canola and Sunflower Oils. Knorr: Cubes, Yakhni, Soups, Noodles and Ketchup. Energile: Flavoured Drinks and Fiesta for Children. Bestfoods: Mayonnaise and Sandwich Spreads. Skippy: Ready-to-eat Jelly. Glaxose-D: Fortified glucose drinks Cater Plan: Special range of products for hotels, restaurants and caterers. UPFL using their consumer understanding produces breakthrough innovation in brands capturing the hearts of their consumers through outstanding communication and creating maximum customer value. Serving the everyday needs of all consumers groups for foods through branded products that deliver the best quality and value. They achieve their best by introducing new products, popular flavours and small pack sizes providing variety and convenience at the same time to the consumer which in turn facilitates them to remain popular in the foods business. UPFL shows unprecedented growth; driven through effective consumer promotion, improved packaging and appropriate
segmentation. Unilever commits to establish mutually beneficial relations with their suppliers, consumer and business partners. In short, Unilever strives to be a trusted corporate participant and as an integral part of society, fulfilling their responsibilities immaculately towards the society and community in which it operates.
1.2 About the Product

Rafhan is a name that has gained popularity since 40 fine years of its existence and individuals have been loyal to the consumption of this particular brand only. It is the core reason justifying its dominating market share in todays time generating high sales revenue for Unilever. Unilever offers many different flavours (Vanilla, Strawberry, Banana , Mango) of custard so that there is more variety for the customers to choose from. This satisfies the variety-seeking buying behaviour where customers look for alternatives and more alternatives to taste. After a thorough research via a survey, it was concluded that Rafhan custard is more popular and readily consumed as compared to other brand such as National. The reason being that there have been no changes in the quality and taste over the years, instead more variety has been introduced in an attempt to target all the segments. Through our survey, it was also assessed that rarely have the customers come across a situation when Rafhan custard wasnt available in the market. This highlights Unilevers sound distribution. The retail price that has been quoted for Rafhan custard is economical for a 300 gm pack for 40 servings is Rs. 54. This amount is affordable by most, of the consumers, irrespective of their income group/social class. Rafhan is considered as the modern form of dessert that required least preparatory time. Due to all these factors it has created loyalty amongst customers who do not intend to switch brand at any point of time because they trust this brand owing to the number of successive years it has enjoyed in the market. This explains the customer
perceived value is high as the benefits outdo the costs in the form of quality, taste and most importantly creating a symbol of celebration, whereby families sit together and share joy. The quality that Rafhan powder offers hold precedence over other brands starting from its nutritious ingredients to its proper packaging, thus indicating that for them each step manufacturing has to add value to the final product. Indeed retaining the existing customers and attracting new ones is a tedious task and something that takes time to achieve. Thus we need to assess the point that creates value from the angle of the customer. If we break customer perceived value into parts, we will come across a set of values and costs that play a major role here. Due to the fact that this product is readily available at general stores, it saves the cost or time of actually going to several stores in search for rafhan custard powder. This also gives the added advantage of energy cost whereby the customers do not have to spend their energy in locating the product at different stores due to unavailability. It is economicallypriced that works well in creating a market share and loyalty of this brand in turn developing a habitual buying behaviour where only this brand is going to catch the attention as compared to other brands. Owing to the number of years that it has served the market, consumers trust this brand in offering quality and variety, as well as trusting the ingredients that is used in it. This also shows the level of its reliability. Thus, it has an association with the minds and personal lives of individuals. This gives its image a certain degree of value whereby individuals first choice of dessert when celebrating would be Rafhan custard. Here, the credit also goes to how convenient and easy it is to prepare Rafhan custard with very little hassle. Another reason that adds to its advantage is that it if being used since decades in most households, thus it is easy to rely upon it. The credit here goes to the advertisements on television that depicts family value and also segmenting the market demographically from toddlers to senior citizens. The ads of Rafhan custard powders are so vibrant that it is bound to grasp the attention of the viewers, giving its image a boost that ultimately resulted in Rafhan capturing the market share. Furthermore, Rafhan ads also give ideas to people about its usage such as; Rafhan custard with jelly, Rafhan custard with seasoned fruits or Rafhan custard with cake.
All the above factors communicate that the customer perceived value with respect to Rafhan custard is high and works favourably for the company in the long run.
2. Industrial Analysis
2.1 Market Share Past Four Years and Estimate of current and next year (Volume)
Meetha Market Size Value in Rs.Bn Home Made Home Made Home Made 2007 Market Estima te 2.4 11 2008 Marke t Estim ate 2 12 2009 Marke t Estim ate 2.5 13 2010 Marke t Estima te 3.13 14.08 2011* Marke t Estim ate 2012* Marke t Estim ate
Home Made Ready to Eat Ready to Eat Ready to Eat Ready to Eat Ready to Eat Ready to Eat Ready to Eat
Category Cake & Bakery Halwa & Kheer Recipe Mixes(Custar d, Jelly, Pudding, Kheer) Sweet Dairy Drinks/Sweet Snacks Ice Cream Confectionary Cakes Bakery Mithai Jam/Jelly Honey Fruits &
% Grow th 25 8
% Shar e 2 9
3.3 14.7
3.4 15.2
1.2
1.1
1.3
18
1.8
1.8
1.9
9.8 11 15.9 2.4 23.2 0.19 2.4 42.8
10.6 9 16 2.5 25 0.24 2.77 51.3
11 10 18 2 27 0.28 3.13 52
4 11 13 20 8 17 13 1
11.42 13 19 3.6 29 0.33 3.4 52.71
8 9 13 2 19 0 2 35
13.1 14.7 21.2 3.3 31 0.43 3.3 57.2
13.5 15.2 22 3.4 32.1 0.43 3.4 59.2
*the data is estimated from the growth rate given to us by Unilever
Within Recipe Mixes which is approximately 1% of the total Meetha market the market share split is as follows Rafhan : 48% Laziza: 45% National : 6% Fauji, Haleeb: 1%
2.1 Analysis
Micro environmental factors: The only competitor that Rafhan custard has in the market is National Foods. Unlike the latter, Rafhan being a brand of Unilever has a strong goodwill in the market owing to its history of quality deliverance. National custard powder has recently penetrated the market and majority have a developed taste of Rafhan custard thus, there is reluctance of switching brands. Individuals will only switch in case Rafhan custard powder is not available in the market. Recommendations Therefore, Rafhan foods needsRafhan foods need to retain its sound distribution to general stores across the region. Any fault from their end may affect its demand as one cannot overlook the fact that National also has a good name in the market. Though it might have newly introduced custard powder but they are very well-reputed when it comes to spices to be added in food for taste. The introduction of Rafhan custard powder sachets will also work favourably in creating demand as it is more convenient and does not put a dent in the pocket, especially of those who belong to low-income groups. Macro environmental factors: The economic factors play an important role here. The economy of Pakistan has undergone a major turmoil in the recent years inflating
the prices of utility items mainly; milk , rice, wheat and sugar and shrinking the purchasing power of the buyer. With respect to Rafhan custard powder, milk and sugar are its complementary products required for the preparing the custard. Subsequently, if, if the prices of sugar (due to the Floods last years and yield of sugar cane going down or import of sugar) and) and milk increases, there are likely chances for the purchase of custard powder to become infrequent as it cannot be overlooked that intake of custard is not a need, its a want (desserts can be categorized as a luxurious commodity). Recommendations to sustain the market share in custard Ensuring availability of the product (Utilization of distribution channels) Visibility in the market (appropriate shelf space) Highlighting on the nutritional aspects of eating custard
3. Consumer Behaviour
There are many factors which affect the consumer behaviour towards a brand and Rafhan is no different.
3.1 Cultural Factors

Culture A cultural shift has taken place with respect to the dessert. In Pakistan, with the evolution of private TV channels, there have been many food related channels. The cooking shows have changed the way a traditional house wife used to cook meals, make dessert for her family. With this shift, housewives have now started making continental, fusion recipes. Dessert has come a long way, from having kheer and gajar ka halwa people are more inclined to try out new desserts. Custard not only is used in the traditional desserts also has usage in the modern recipes. Rafhan Custard being the market leader by a huge difference takes its edge and provides the housewives with a perfect variety of flavours to help them make the desserts of their choice. Social Class Irrespective of the Social Class custard is consumed and loved by all. The usage may vary from class to class, but the product in itself is a
must-have in every household belonging to any social class. Rafhan Custard, taking this into account has packaged their product in way that it attracts buyers belonging to any social class.
3.2 Social Factors

Word of Mouth Being the oldest brand in Pakistan for custards, Rafhan has grown younger by the day and has placed itself as one of the most trusted brands of any household. Having been around for 40 years, serving many generations of families, Rafhans popularity has increased by word of mouth too. A satisfied consumer will tell other people in her own community and help spread the word about the product. Family Family members can strongly influence the buying behaviour of any person. Rafhan has served generations for over 40 years, and the tradition has been transferred to the young by the wise ones to use Rafhan Custard.
3.3 Survey
We conducted a survey to ask housewives about the dessert they like, brand they prefer, buying frequency. Some of the answers we got are below:
Survey Questions Are you fond of desserts? Rafhan Custard Powder Yes No What sort of dessert do you prefer to eat? Icecream Cake Custard/Trifle Halwa/sweetmeat Chocolates
Percentag e% 94 6
31 31 25 0 13
Which name comes to
your mind when you hear the word custard? Rafhan National Any other: ____________
94 6 0
How frequently do you
purchase custard? Weekly Monthly Occasionally Once in a while
0 31 44 25
Which flavour of custard do you prefer to consume? Vanilla Banana Strawberry Chocolate Pistachio In your opinion, which of the following age group prefers consuming custard the most? Kids Teenagers Adults Senior citizens No age
81 0 19 0 0
31 19 0 13 38 56 44
limit Did the rafhan custard yo ad appeal to you, resulting in its purchase? Yes No Do you purchase Rafhan custard on impulse? Yes No Given a choice, would other than Rafhan? you like you purchase any other custard brand Yes No Unsure
63 38
13 56 31 44 56
Do you want Rafhan to introduce new flavours Yes No
4. Defining Value
4.1 Segmentation
Geo-demographical segmentation: The segmentation for of the Rafhan custardproduct i.e. desserts are generally meant for social economic class A-C which is usually promoted in their advertisements.The lower social economic class usually does not prefer having custard as they are of the mindset that desserts are the luxury of the human needs. Is focused on the following characteristics:
Age Gender Geographical The characteristic of the population can be further divided by: Age
Gender Income Geographical
AGE: Rafhan Custard as a product does not promotes any the age group 25 35 years restriction for its consumption. It caters to all age groups who are fond of desserts/sweets Rafhan Custard as a product is focused on young Moms aged 25 35 years, who are adaptable in their buying behaviour. GENDER:
The product spotlights the female buyers who may be housewives or working moms. GEOGRAPHICAL: The product caters to consumers located everywhere in Pakistan Rural or Urban areas. Rafhan Custard has almost an equal share in the rural and urban population.
Psychographic Segmentation: Life style Rafhan custard caters to the psyche of the customer s who is young and time constrained due to their lifestyle or professional involvementsbelonging to different segments. Rafhan giving reliability and convenience(easy to cook) to its customers enjoys market dominance and being in the industry for almost 50 years, gives its customer a sense of trust that the product will continue to exist in the years to come. Social Class Rafhan custard is most popular in the social class A- C where people are not price sensitive and can easily afford desserts on regular bases or special occasions.
Behavioural Segmentation: Behavioural segmentation can be divided in the following 4 categories. Occasions: Rafhan Custard is portrayed in its advertisements as desserts to be enjoyed on special occasions like birthdays, Eid, weddings, family gettogethers etc. But it is enjoyed by people from all classes who have a sweet tooth. Benefits: The reason why individuals who have a desire of eating desserts opt for Rafhan custard is because it is economically priced and it is served at many occasions. Another very important advantage is that Rafhan custard is not restricted to a particular age group, and is greatly enjoyed by people of all ages. This also saves cost especially during festive occasions when the aim is to make something which pleases everyone; kids, teenagers and adults, and Rafhan custard prevents housewives from getting into the hassle of making multiple desserts. An added advantage of the usage of Rafhan custard is that it is nutritious for the small children and can substitute for food items such as; cerelac or milk products. Usage Rate : The area concerns how frequently rafhan custard powder is consumed. Though it is not highly affordable by those who belong to the lower income group, the introduction of Rafhan custard powder sachets have soared its demand even in this class due to the fact that it is sold for a lower price as compared to the economy pack. Rafhan custard powder has multiple uses. The powder can be used when preparing milk shakes such as; strawberry milkshake, more uses are; cakes, mixed fruit custard, tea scones, custard pudding and tarts. The recipe books are also gifted to the Rafhan users so that it is purchased on a habitual basis and not just for any special occasion. Loyalty Status: The segmented Loyalty status as shown in advertisements gives the customers the picture of a product that has been there in the market for a long time. Due to its availability for
decades the name Rafhan Custard has become part of every household and people buy Rafhan Custard without hesitation and without considering other alternative custard powders. Recommendations:
They can target on young men (bachelors) living alone and want convenient and homemade desserts.
Rafhan can increase its product depth by introducing a new variant for diabetic and health conscious customers. A few changes in the packaging, Rafhan can highlight nutrition facts for the senior customers and for Mothers who can feed custard to their babies as a good alternative to baby food supplements.
With majority of our population falling below the literacy criteria and living in rural areas Rafhan Custard portrays itself as a dessert for the urban citizen with westernized ads it could innovate a traditional desi recipe for the rural class.
rural population -- innovating traditional desi recipes and relating them with our cultural festivities (e.g celebrations of Basant and /or time harvesting of crops)
4.2 Market Targeting

In market targeting we are going to evaluate the various segments and decide whom to target.
Evaluating Market Segments Rafhan Custard caters to young mothers of age 25-35 years, belonging to socio economic class A-C, located anywhere in Pakistan. For evaluation, we can say that since Rafhan Custard considers itself as a consumer product for everyone belonging to any age group. Selecting Market Segments
The buying decision is made by the housewives to bring home the healthiest and the best product for her family. Rafhan Custard primarily focuses on the housewives to buy their products. This statement that housewives are primarily the target is also highlighted in all of their advertisements.
Undifferentiated Marketing Since Rafhan Custard is a product for all. It is marketed with a common need rather than a differentiated one. The common need of their target market is to have dessert and that is what Rafhan Custard provides. Recommendations Rafhan must also consider individuals living alone as their target market too. Since Rafhan Custard is an easy to make dessert, individuals living independently can easily make it. A niche marketing campaign to attract such users can be run. The viability of this segment is that, with these telecommunication companies, MNCs, Oil & Gas companies coming in Pakistan we see a lot of youngsters moving away from their home towns to work and live in other cities and that is a thriving segment to target.
Rafhan should also target senior citizens; they should follow niche marketing strategy. Rafhan can penetrate in the market by projecting itself as a healthy and a suitable brand for the elderly.
4.3 Market Positioning

Rafhan Custard has positioned its brand as perfect Meetha for celebrating birthday parties and to be served in other events such as weddings.
*The perceptual map shows the position of the market players. Identifying the Competitive Advantages Rafhan Custard can gain competitive advantages through: Product line differentiation Service differentiation Channel differentiation People differentiation Image differentiation
Selecting the Competitive Advantages Rafhan Custard is gaining competitive advantages over competitors by using more than one differentiation to promote. Product Line Differentiation Rafhan Custard is offering various fruit flavours of Meetha. It differs from others by focusing on nutritional values for Kids. Service Differentiation Rafhan tends to serve as perfect Meetha for celebrating events like birthday parties and and other occasions. Channel Differentiation It has strong distribution network as it covers 49 % Rural and 51 % of Urban area of Pakistan. Due to which it is widely popular brand. Image Differentiation The brand creates an image in the minds of the consumers as they have been around in the industry for a longer period of time and have become a part of every household belonging to specific social classes. Selecting an Over All Positioning Strategy More for the Same Rafhan intends to use positioning strategy for a More for the same, by offering more quality as compared to its competitor National foods as they have a custard brand in the market which is available almost at the same price. other
Communicating and Delivering the Selected Position Rafhan Custard is using concrete actions by implementing its positioning strategy by designing the marketing mix-product, price, place and promotion in the following manner. Product line Extension by introducing more fruit flavours in colourful packaging. Price level of Rafhan is not high as it caters to every class. Rafhan is available in all parts of the country. Promotion in both ATLs and in BTLs Advertisements.
Recommendations Rafhan Custard has currently, through their advertisements, positioned themselves as a dessert to have while celebrating birthdays. Considering Pakistans rural population, Rafhan can promote their Custard as a dessert for the celebrations in the rural areas for every province e.g. during Basant in Punjab, cotton harvest season, which is celebrated like eid in rural areas, in Punjab and Sindh and promote the products suited specifically to these events.
5. Creating Value
5.1 Product
Rafhan, with a history of around 5 decades of providing quality and delicious desserts to consumers, became the market leader in the packaged desserts category in 2010. A very successful 'Birthday Bonanza' campaign led to further digging in of its position as the owner of the Birthday platform. With a pleasing and catchy TV campaign, Rafhan desserts delivered another upstanding year of sound growth and completed recently celebrated 50th anniversary. Rafhan completed its 50 years this year.
The flavors available of the product are vanilla, strawberry,strawberry,; mango and banana in SKUs of 21 grams, 47 grams, 120 grams and 300 grams. in a SKU net weighted 300 grams. The custard powder is convenient to cook and can be enjoyed on their own but also with plain cakes, jellies and fruits. It is a product that is found in every household. Rafhan custard powder is packed in a plastic pouch packing which can be easily opened and poured in to a jar for reuse. The packing was recently revamped for a new look. The pack clearly labels the ingredients and nutritional facts of the product. The manufacturing and expiry dates are mentioned along with the retail price of the product. Recipe for making custard is clearly stated on the back of the pack. It is often augmented with recipes to make delicious and yummy desserts with custard. Rafhan provides the Value added services to its consumers by providing them a toll free helpline for their complaints, comments and suggestions known as The Unilever Raabta which provides a sense of reliability and dependability on the product and the company.
5.1.1 Major Brand strategy decisions Rafhan is a brand that almost everyone is familiar with. Its brand equity is high and has gained costumer loyalty over the years which its competitors are still working upon in their product line of desserts. The brands image being reliable and trustworthy among the customers , has developed a strong emotional bonding with them. Its presence through generations in a household adds value to the customer perception. Rafhan is strengthening this image through building this bond that their products are here since long and will stay here for long as a part of the customers household.
5.1.2 PLC Product is at maturity stage in its life cycle. Rafhan desserts are in Pakistan for 50 years now and have been consumers favorite since beginning because of no solid competition. The product has grown enormously in terms of sales however Rafhan Best foods and Unilever didnt put up much of a show in evolving the product in terms coming up with new flavors or forms of desserts. Hence the desserts are in a mature stage and are consumers favorite from very few options available in the local market. Rafhan Ice cream mix is in introductory stage and Rafhan has tried to enter a new market for the consumers who would like to make the ice cream at home. Rafhan Corn flour is in growth stage, known for its quality and much more for its brand name.
5.1.3 Recommendations 1. Line Extensions : a. Introducing new flavors for custard and Jelly complementing the custard flavor like Pineapple, blueberry and raspberry b. Rafhan should come up with a new product of Kheer mix and cash the brand equity. c. Cake mixes can be an alluring option as well because there is no local competition for this kind of a product. d. Diet custard with diabetic and health conscious consumers
2. Brand Extensions: Ready to eat Rafhan desserts that can be kept at retail outlets along with introducing new variety of recipes which will facilitate the working women and will give and option of convenient lunch option for their school going children. 3. As a food supplement for toddlers.
5.1.4 Product Mix
Unilever Food Pakistan Limited
Savory & Noodles
Spreads
Desserts
Drinks
Knorr
BlueBand Flora
Rafhan
Energile Glaxose-D
There are 4 main categories of Unilever Food Pakistan Limited Savory&Noodles, Spreads, Desserts, Drinks. Knorr is the main brand in Savory & Noodles, the products which are offered under this brand are Chicken Cubes, Pulao Cubes, Ready to Cook Mix like Chicken Qorma, Chapli kababs etc, Noodles which includes both 2 minute noodles and soupy noodles, Yakhni, Soups, Chinese Recipe Mix, Tomato Ketchup, Chilli Garlic Sauce. The main brand on Spreads is Blueband, which is available in different sizes. The Flora brand of margarine is now discontinued. The main brands in Drinks category are Energile and Glaxose-D. The main Desserts brand is Rafhan which in itself has three sub categories, desserts, thickeners and oils. Below is the a diagram which explains Rafhan.
Product Mix Length: 3 Product Mix Width: 3 Product Depth: 7 Consistency: Rafhans product mix is quite consistent as all of the brands are of same category i.e. foods and can be kept in the same warehouse and in same conditions. All of them can be distributed by a single transportation mean and also can be promoted to the same audience.
5.2 Price
Rafhan Custard is the market leader by a huge difference. Their products are economically affordable; they have 4 SKUs of their product the product is bought by customers belonging to any social class A-C. 5.2.1 Pricing Strategy Rafhan prices its product mainly based on customer perceptions. Customers perceive Rafhan as a quality product and Rafhan also tries to deliver the perceived quality doesnt do any compromises on it. With this said, we can say Rafhan follows Value-Based Pricing strategy. 5.2.2 Cost Strategy In cost, Rafhan adds a fixed premium to the cost of producing the product. E.g. If the cost of producing a unit is Rs.30 then Rafhan adds a Rs.10 premium on top of it and sell the product for Rs.40. This Rs.10 amount is the perceived value of the product by the customers. Rafhan only increases its price if there is an increase in the Raw Materials Price. E.g. If the cost gets increased due to expensive raw materials from Rs.30 to Rs.35, Rafhan will still add the same premium of Rs.10 as the perceived value hasnt changed. Hence the product will be sold for Rs. 45. 5.2.3 Product Mix Pricing Strategy The product mix pricing strategy of Rafhan is Product Line Pricing. The product line pricing states the products are all consistent; Rafhan follows the same pricing strategy for all their products. The price increase in Rafhan custard will be done alongside jelly and ice cream mix as well.
5.3 PLACE
Place involves making a product available to the final consumer with the help of suppliers and resellers. This supply chain consists of upstream and downstream partners including suppliers, intermediaries. This process of making the goods available from the manufacturer to the final consumer requires the company to manage its Value Delivery Network, which is a network made up of the supplier, distributor and ultimately customers who partner with each other to improve the entire system. 5.3.1 Analysis of Distribution Channels Rafhan adapts two types of distribution methods: Intensive Distribution Network
Rafhan distributes through their designated distributors, who are restricted to operate in their assigned territories. They have the responsibility to make sure that the product is available at all retail outlets. This network spans to all of Pakistan encompassing rural and urban regions.
National Discount Chains

They are also supplying Rafhan products to large chain stores directly to cater to their large quantity requirements like MAKRO and METRO.
5.3.2 Distributors Network Add Value to the Channel

The distributors expertise, specialization and scale of operation help Rafhan to distribute their products available throughout the region rather than using their own distribution facilities. Distributors affect the economy of efforts, by reducing the number of contacts, explained
with the figure
Number of contacts M+C=1+3=4 M = Manufacturer, C = Customers and D = Distributors
Channel Level Rafhan uses indirect marketing channels (more than one distributor to distribute its products). The channel is not complex as the flow of products, ownership, payment and the information is only from the distributors network.
Channel Behavior Channel performance of Rafhan distribution network is enhanced as the competition rises to achieve sale targets, discounts offered on bulk buying or to achieve sales targets. Channel Conflicts As Rafhan is selling at lower prices to chain stores like to MAKRO directly, horizontal conflict occurs between distributors and chain stores because they sell at lower prices, enabling retailers to purchase from these chain stores. Vertical Marketing System Rafhan acts as a unified system; it has the power to dictate prices, conditions to be a distributor by meeting terms and conditions of the company, as the order processing is done by paying advance cash deposits in the company account to receive the goods.
Administered VMS As Rafhan has the Administered VMS it enables them to seek shelf space and sets their own prices with the increase of raw material prices, they are the trend setters.
Marketing Logistics Rafhan goods are physically distributed exceptionally well as the distributors network are required to make sure that Rafhan custard is available in every retail outlet, it gains competitive advantage by providing the product to every customer who asks for Rafhan custard enabling tremendous visibility of the product. Warehousing Rafhan has their own warehouses where they keep their finished goods and handover it to their distributors. Transportation Their transportation channel supplies the finished products to the distributers and to MAKRO, METRO and Hyperstar. 5.3.3 Recommendations Rafhan can increase its distribution by increasing the number of distributors through out the region, as the distribution network will be wider. As Rafhan relay on the distributors for distribution, they should have taken steps to survey that its product is available at every retail outlet.
6.0 Promotion
The need for a firm to promote arises when it has to create awareness of its product or product line amongst the audience. This is not restricted to the introductory stage of the product lifecycle where the firm has to develop its identity, but can also be used in the decline stage where the firm believes that it needs to remind the customers of the product. Promotion is essential at all stages as long as the product exists in the market. It leads to higher purchasing power and brings in favourable sales revenues. However, its efficiency depends on the perfect blend of promotion mix whereby, a firm uses different tools such as; advertising, public relations, sales promotion and personal selling to build strong customer relationship. Rafhan has a strong goodwill in the market today which is reflected by the decades of success that it has been enjoying. Currently, Rafhan custard is in its maturity stage where promotion does not necessarily play an important role in soaring demand as most of the population is aware of the product. However, in order to stay abreast with the recent competitors that have entered the market such as National Foods, Rafhan needs to continue promoting its custard powder aggressively. Promotion is done on the basis of personal and non-personal mediums. The tools used by Rafhan custard comprises of the following:
6.1 Marketing communication mix:
6.1.1 Advertising This is classified as above the line. The core reason of why any firm would commonly opt for advertising is solely because it can reach masses at a low cost per exposure. People spread across rural and urban areas viewed the ad of Rafhan custard and it instantly sent a message that this product is available in the market. Anything that is visual leaves a long-lasting impression on ones mind. Rafhan has been successful in making their broadcast ads quite vibrant and full of music, and it has indeed paid off via brand loyalty. By far, Rafhan is dominating the industry and generating high profit margins. Of course, the more one uses visuals, colours and sounds, the more the overall
cost of advertising shall rise. However, Rafhan can afford to incur these costs after its concrete standing in the market. Negotiation which is where you are persuading the consumers to buy your product, involves rational or emotional appeal. Rafhan is using the emotional appeal as its ad depicts special occasions such as; birthday parties, eid, gettogethers where people are sharing their happiness by eating custard. APNA channel is usually seen promoting the product. This spreads a message of solidarity and people are inevitably going to associate happy occasions with Rafhan custard. Audio advertising has also been used as the jingle that says Rafhan custard yo is very pleasant to the ear and if one hears it numerous times then there are likely to purchase. With every launch, they changed the lyrics of the jingle and this highlights their uniqueness. The ad also gives a detail of the various uses of custard and this has enhances its usage rate such as; custard can be mixed with fruits, topped on a cake, blended in milk or eaten with jelly. Few years ago, Rafhan used newspapers and magazines as a means of spreading awareness; however these have fallen short with the inculcation of broadcast ads which is quicker and more effective in conveying messages across the region. 6.1.2 Sales promotion This is classified as below the line. Initially Rafhan was slightly apprehensive about the launch of enhanced/new custard powder flavours. It wasnt sure whether they will be accepted by the customers or not. Under such circumstances, it used the strategy of offering free samples to people by placing kiosks near popular supermarkets. This personal communication was an effective way of letting people taste the new flavours before making the actual purchase. The authentic feedback of the users was also evaluated for further improvement. Besides this, previously Rafhan custard was offering free jelly sachets along with the package in order to promote its demand. Another scheme that was introduced was the lucky draw contest called birthday bonanza where customers were rewarded through balloting after the submission of two empty wrappers. Upon winning, Rafhan celebrated the birthday of the winners and it was later aired on television on different channels. This created excitement amongst the customers and triggered purchase. It has been proven that such schemes truly work as it plays the role of an attraction-grabber.
6.1.3 Discount Previously Rafhan launched a scheme which was part of their sales promotion where they offered a 3 Rupee Discount on their economy pack. Such schemes have always been favorable in creating demand of Rafhan custard as it attracts many people thus enhancing the purchasing power.
Owing to the thriving promotional strategies that Rafhan custard has implemented in addition to its good quality and excessive variety, it has created a yearning amongst the customers for this brand only. Rafhan custard has been targeting secondary sales. Pull strategy here would define using different means such as advertising and sales promotion to create awareness of its product. Rafhan also enjoys high brand equity as it has a strong brand name in the market that has alone created preference and loyalty for it.
6.1.4 Word-of-mouth It is also an important form of communication with respect to Rafhan custard as this justifies why it is travelling through generations from mothers to daughters and then their grandchildren.
6.2 Recommendations
It would be wise for Rafhan to slightly alter its promotional strategies in order to achieve perfection. It should invest more in print media such as magazines and newspapers. They can specifically target kids magazines such as Young World and Wikkid. Previously, Rafhan used to advertise in Young World but not anymore. Children are more prone to get attracted to such colourful desserts. Secondly, Rafhan should differentiate its market and segment it in a way where they can cater to rural individuals as well. It has been observed that in the rural areas, Rafhan custard is still not common and one can try to change its image in order to create demand in such localities as well. Rafhan custard can
be served at different festivals that are associated to our culture, such as Basant. This can also be created if Rafhan alters the image of its product by offering uniqueness. Schemes such as; Family Bonanza which took place in 2008 should be introduced again as it generates a lot of interest amongst the audience. Ads that are specifically targeting the rural people should be made. This will create a segment which will ultimately yield profits in the longrun. Here Rafhan would need to redesign their ads in such a way that people living in the rural areas can easily relate to it and take it as a dessert that can be consumed at all occasions. The promotional strategies will alter a bit as opposed to the modern approach.

Rafhan Custard Powder - Final

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