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Syndicate 4
South Africa in 1996
New South Africa was 2 years old. MASTER STAMP
President Nelson Mandela divorced Winnie Mandela after 38
year marriage.
Bafana Bafana won a tournament.
2
Situational Analysis
Cement industry Cartel – 25 year alliance.
MASTER STAMP
3 Members:
• Alpha
• PPC
• Blue Circle Cement
Colluded on price and Market share
3
Situational Analysis
Political MASTER STAMP
The country was at the beginning of a very exciting political
period. The ANC government had just been elected into power
Economic
GDP growth was definitely on the rise, with huge growth in 1994
and then continued growth to 1996. The forecasts at that stage
were very positive for economic growth.
Social
Socially South Africa was very much in a stage of growth. There
was now the early emergence of the growing black middle class.
All races were getting opportunities previously denied by the
apartheid government.
Legislative
Competition Board ruled against the cartel and instructed the
cartel to disband by 30 September 1996. This signalled a new
era for the cartel members with regards to their competitive
positions and respective approaches to marketing of their
products. 4
Situational Analysis
Competitors MASTER STAMP
Due to the nature of the cartel, there was no differentiation
between the companies and no real competition between them.
Cross subsidisation of prices across regions were used as a
deterrent to new competitors.
• For example, Natal Portland Cement’s (equally controlled by the
cartel members) prices were reduced to eliminate a competitor
whose product entered through Durban harbour, while the cartel’s
prices in other regions were increased.
5
Situational Analysis
Marketing mix
Product MASTER STAMP
Environment Evaluation
MASTER STAMP
Positive Negative
7
SWOT Analysis
Environment Evaluation
MASTER STAMP
Positive Negative
Internal Strengths Weaknesses
•Few competitors, all in similar
situation.
•Good product knowledge.
•Good customer knowledge.
•Strong brand.
•Efficient and reliable supply
chain.
8
Current issues facing Blue Circle
Information Information
flow flow
9
Current issues facing Blue Circle
10
Current issues facing Blue Circle
11
The Buying Centre (Grewel & Levy, 2008)
Person who first Person whose
suggests buying views influence
MASTER STAMP
the particular other members of
product or the buying centre
service. in making the final
decision.
12
Buying Centre for Cement Industry
Buying Centre - Influence Bulk Buyers Bulk Bag Buyers Bag
MASTER STAMP
roles Criteria Criteria
1 Initiator Low Main building Price, Small works Price, Promotion
contractor Promotion contractor
2 Influencer High Cement company Product, Hardware store Product,
rep Promotion assistant Promotion
3 Decider High Main contractor – Price, Small works Price
Site manager, Product, contractor
Concrete company Place
procurement
4 Buyer Low Quantity surveyor Price Small works Price
contractor
5 User Medium Contract workers Product Small works Product
contract workers
15
Cement Supply Chain
A demand chain management approach doesn’t just push
MASTER
things through the system. It emphasizes whatSTAMP
solutions
customers are looking for, not what products we are trying to
sell to them. (Kotler, Keller, 2009)
BCC will have to ensure the following to add value through their
supply chain
BCC’s value proposition to customers: On-time delivery; and
ordering and billing standards.
The channel design and network strategy: How many
warehouses and their locations?
Develop operational excellence: Sales forecasting, warehouse,
and transportation management.
Implement solutions with: information systems, equipment,
17 th
Marketing Recommendations
The executives and top management need to buy
MASTER into the
STAMP
idea of becoming a customer-centric organization, with their
support the backing staff will follow suit, thus the culture will
change.
The company’s marketing needs to change as the
environment changes.
18
Holistic Marketing
MASTER STAMP
19
Holistic Marketing
Relationship marketing MASTER STAMP
BCC must foster relationships with all stakeholders (customers,
employees, marketing partners and members of the financial
community) who can influence BCC’s marketing activities.
Understand stakeholders’ capabilities and resources.
Build an effective network of relationships.
Each customer must be seen as an individual and where
possible customise service to each individuals needs.
Retain customers
20
Holistic Marketing
Integrated marketing MASTER STAMP
The marketing mix (4P’s) is a tool that BCC can use to create,
communicate and deliver value to customers. Once BCC
understand their trade channels and customer/s they can
customise their product according to their needs.
BCC should establish who their target market is and then design
their supply chain backwards.
Effective communication creates brand awareness.
Create value for the customer, through an effective supply
chain.
A different price structure should apply to the different customer
segments.
Treat each customer as an individual with specific needs.
Improve the ordering and delivery processes, invest in supply
chain management software.
21
Holistic Marketing
Internal marketing MASTER STAMP
Hiring, training and motivating staff forms part of internal
marketing.
Senior management must be an example to other staff
members.
Each person in BCC must think from the customers point of view
customer.
Key points for each department need to be identified, these will
asses if they are customer orientated.
• For example: Sales Assessment
– Knowledge about the customers industry.
– Strive to give customers the best solutions.
– Keep to promises made.
– Share the knowledge about customers with other departments
(Kotler& Keller, 12th ed, 2006)
22
Holistic Marketing
MASTER STAMP
Performance Marketing
Performance marketing is incorporated in holistic marketing.
It is imperative to measure the financial effect of the above
marketing efforts.
Through effective measurement and control, other opportunities
will be identified which might lead to differentiating BCC from
their competitors even more. (Jacques, F, HBR 2007)
23
Thank you