Strategic Marketing Analysis

on DANO MILK POWDER

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SUBMITTED TO
Samy Ahmed(SYA)
Lecturer, School of Business
North South University
STRATEGIC MARKETING (MKT 460)

SECTION: 02
SUBMITTED BY
NAME

MD.Rakibul Islam Rakib

1010153 030

Date Of Submission:
13/4/2014

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Letter of Transmittal
April 13, 2014.
Course Instructor
Samy Ahmed
School of Business,
North South University.
Subject: Submission of Strategic Marketing Analysis Report Based On Dado Milk Powder
Dear Sir,
Here is the Strategic Marketing Analysis Report Based on Dado Milk Powderwhich is necessary for
the partial fulfillment of Strategic Marketing(MKT 460) course of BBA program.
Therefore, we will be pleased if you accept the project and we also eagerly waiting for your valuable
recommendation about our work.
Thanking you
Sincerely yours,
Name

MD.Rakibul Islam Rakib

ID

1010153 030

Signature

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Declaration Statement

This is to be declared that, this project is prepared by our own research and work. There is no plagiarism
in this work. We used the Harvard / APA system for referencing. All the references are provided in the
term paper. The report was not submitted earlier to any other course or any other institution. We are
responsible if any kinds of plagiarism are founded in this work.

Table of Contents

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Acknowledgement...................................................................................................... 5
Executive Summery.................................................................................................... 6
INTRODUCTION........................................................................................................... 7
An overview of Dano milk powder history in Bangladesh...........................................8
Operational System in Bangladesh.............................................................................8
Dano STP (Segmentation, Targeting, Positioning) Process:.........................................9
SWOT Analysis:......................................................................................................... 15
The Strategic Planning Gap:..................................................................................... 17
Pestle Analysis:......................................................................................................... 18
The Buying Decision Making Process........................................................................21
Core Values of DANO:............................................................................................... 22
Brand Personality:..................................................................................................... 22
Implementation of Product-Market Expansion Grid Strategies:................................23
Companys Strategies for Strategic Formulation:.....................................................24
Value-Chain Strategies:............................................................................................ 25
Competitive Picture:................................................................................................. 25
INDUSTRY Analysis through Porters 5 Forces Model:................................................26
Holistic Marketing Strategy of Dano:........................................................................28
Internal marketing of DANO Bangladesh:..............................................................28
INTEGRATED MARKETING OF DANO MILK POWDER:..............................................29
MARKETING MIX (4ps)....................................................................................... 29
Social Responsibility marketing:............................................................................30
Performance Marketing:..................................................................................... 30
Environment....................................................................................................... 31
Relationship Marketing.......................................................................................... 31
Product Life Cycle:.................................................................................................... 32
Financial Statement.................................................................................................. 33
Cause Marketing (Recommendation):.......................................................................34
Conclusion................................................................................................................ 35
Bibliography:............................................................................................................ 36

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Acknowledgement
As a part of our studying Business Administration, our course teacher of Strategic Marketing had
assigned us to prepare a Strategic analysis report. First of all, we would like to express our deepest
gratitude to our honorable faculty Samy Ahmed for his valuable contribution. His painstaking effort at
importing his students with the necessary skills and expertise goes far beyond his responsibilities as a
teacher, and we are very grateful to him.
We would also like to thank our friends who helped us to gather information. It would have become
really a nightmare doing the job without their help. To do that kind a management plan at this level, it
requires a great deal of help from others, which we got from our fellows. We are grateful to all of them
who helped us.

Executive Summery

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World is becoming very complex but fast. To achieve any objective now, people have to be fast and
managed themselves very quickly within the limited resources. Specially, throughout the business one
has to accomplish unique outcomes with limited resources under critical time constraints. Beside this,
we have to remember that Bangladesh is an under developed country. People here face too many
constraints. The business people here also face too many barriers to lead their organization with the
consistent of countrys economic, political, and other situations. So, to carry on the business companies
have to undertake competitive business strategy. Among them Holistic Marketing strategy is most
influential strategy for any business. We can mention Holistic Marketing strategy is the heart of overall
business strategy of DANO milk powder.On the other hand, in this report we are preface all possible
factors related with marketing, financing, economy, production (Packaging) etc. As Arla Foods
Ingredients, Bangladesh can get actual picture of milk powder market and also can get real orientation
about STP Process policy as well as other policy.
So far, we have tried to give a target from product market to reach it to final buyers. In the report, we
have put up a proposal about DANO milk powder, product design, marketing of DANO milk powder,
financial analysis, competitive current marketing strategy, Ad. & trade promotional opportunities,
market segmentation, pricing strategy with the compare of competitors, opinions & suggestions from
field
(SHOPS) survey, and other related factors. So, we think Arla Foods Ingredients, Bangladesh will get a
thorough scenario of milk powder market of Bangladesh and will get the effective way to penetrate in
the milk powder market as Arla Foods can able to obtain its desired market position.

INTRODUCTION

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Dano milk powder products are marketed all over the country through established strong marketing
network to ensure sufficient supply the product to the distributors warehouses by pick-up van, contact
private transport agencies. After receiving the product, distributors provide this product to wholesalers
and retailers outlets as per companys legislation. It is mention here that distributors pay their money
through demand deposit (DD) at Head Office after they get products as per demand deposit (DD). All
distributors should sale company product according to companys targeted plan and should achieve
this target.To operate smooth business the company has divided its entire market into eight regions
these are- Dhaka-A, Dhaka-B, Dhaka-C, Chittagong, Comilla, Sylhet, Khulna, Barisal and Rajshahi.
All logistic support and Sales Representative (SR) are recruited and paid salary by the respective
distributor except Dhaka-Metro and Chittagong-Metro that is fully operate by the company. Marketing
activities are monitored by the companys personnel of which Territory Officer to handle the
distributor in which Territory Officer is reportable to Regional Executive and Regional executives are
importable to senior Marketing Manager. Sales Representatives arc trained up by the organizational
training. In this regard all financial support provided by the organization. All SR are liable to the
company and follow company rules & regulations.
According to company policy wholesalers, should keep large quantity of product than that of retailers
where distributor supply the product with same price and it is strictly controlled by the company
personnel through close monitoring. Retailer may collect these product from wholesaler while he faces
shortage his product or crisis period because it is the running product of the market and close
monitoring is a part of strong marketing channel which is continuous follow-up by higher authority of
the company. In this connection those who are perform better they will get rewards and on the other
hand who do not perform satisfactory company take necessary action in this regard.

An overview of Dano milk powder history in Bangladesh

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Dano Milk powder is the leading milk powder product in the Bangladesh. Dano was introduced in the
market in1962 by MD Foods all over the world. MD Foods is a Danish company and operation business
in European market Some of Bangladeshi (Former East Pakistan) businessmen were imported Dano
milk powder from Denmark in 1962. Basically their market was whole sales point like Moulovi Bazar
base. They distribute Dano milk powder all over East Pakistan. They continue their import Dano as
scattered from Denmark till 1970. MD Foods was recognized one Bangladeshi person as intender in
1973. Bangladesh indenter was collected & identifies importer demand and authorized indent of
importer letter of credit from Bangladesh to Denmark till 1994. In 1989, MD Foods was setup liaison
office in Bangladesh. MD foods basically monitor the market by various activities like sales promotion
(Both for consumer & Traders) and advertisement in print and electronic media. In 1995, Mutual
Trading Ltd was got import license of Dano milk powder from Denmark as an exclusive importer in
Bangladesh. Mutual Trading Ltd. is only one Bangladesh Company, who canimportDano milk powder
from Denmark. In 1995, Arla foods take over MD foods and merger new company name as Arla Foods
Ingredient. Arla Foods Ingredients owned Danomilk powder all over the world. In 1998, Mutual Trading
ltd was setup new factory in Bangladesh for packing of Dano milk powder product as per Arla Foods
recommendation and Mutual Trading Ltd changed company name as Mutual Milk Products Ltd.

Operational System in Bangladesh

Basically Arla foods Ingredients amba monitor Bangladeshi market by their liaison office of Arla Foods
Ingredients, Bangladesh have to take over all marketing functional activities for occupying their product
and share in market. On other hand, Arla foods set up packing factory finance by Mutual Milk products
ltd. They can packet only for 1 Kg, 500gm. 400gm, 100gm, 50gm and 25gm packet milk Arla have a
separate product supervisor, who can monitor packing system and product quality.

Arla Foods Ingredients, amba, Denmark

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Arla Foods Ingredients, Bangladesh

Mutual Milk Product Ltd

Packaging Factory
In this flow chart show, Arla foods have given an annual sales target to Mutual Milk Products Ltd and
product directly import by L/C from Denmark according to the Arla Foods, Bangladesh instruction.
Mutual Milk products ltd. is to operating packing factory after received product from Denmark.
Arla foods ingredient Bangladesh deals all the marketing functions activities including pricing, packing
design, advertisement, market development and finally monitor overall sales in Bangladesh. Mutual
Milk Products ltd. is to recruitment distributors for sales Dano products all over the country. Here Arla
and Mutual is to jointly market monitor by their staff. All these staff are monitor distribution sales
activities and reported submit to the regional executive about the distributors performance.

Dano STP (Segmentation, Targeting, Positioning) Process:

Market Segmentation Strategy
To better meet the needs of specific groups of consumers, most marketers adopted a policy of market
segmentation, which called for the division of their total potential markets into smaller, homogeneous
segments for which they could design specific products and / or promotional campaigns. In selecting the
target segment, organizations usually follow any one of the following strategies:
Single segment concentration
Selective specialization
Product specialization
Market specialization
Full market coverage
Based on analysis of marketing practice Of Arla Foods it seems they are currently follows a Product
Specialization Strategy. Aral Foods concentrates on making a certain product that it sells to several
segments through the strategy of organization build up a strong reputation in a specific product area.
Factors considered segmenting the consumer markets of milk powder:

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1. Psychographics factors:
In psychographics segmentation, buyers are divided into different groups on the basis of social class.
In respect of social class the customer can sub-divided into three groups these are- lower, middle, and
upper.
2. Behavioral factors:
In behavioral segmentation, buyers arc divided into groups on the basis of their knowledge, attitude.
Use or response to a product in case of milk powder business, we will segment the customer market
on the basis of business, benefit and loyalty status. Customers can be sub-divided into three groups
according to their loyalty status.
Hardcore Loyal: Consumer who buy? One brand Jill the time.
Shifting Loyal: Consumer who shift tram favoring one brand to another.
Switchers: Consumer who show no loyally to any brand.
Each market consists of different numbers of three types of buyers. A brand loyal market is one with a
high percentage of hard-core brands.
3. Demographic factors:
Demographic segmentation consists of dividing the market into groups on the basis of demographic
vArlables such as age, income, occupation etc.
Age
Customers needs, wants and exceptions differ according to their age Although Arla Foods milk powder
product team is dedicated to meeting the nutritional needs of all age groups and ensuring that regional
taste preferences are satisfied. In case of assigning the range from below 14; 15-24; 25-34; 35-44; 45-54
and above 54.
Income
Income segmentation is another long-standing practice in such consumer product as milk powder.
Income does not always predict the best consumers for a given product. It is found from market survey
that major milk powder users are in this income level these are: 6000-9999; 10000-15999; 1600020999; 21000-25999 and above 26000.
Occupation

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Present study found that the major occupation of powder milk users of Bangladesh are-Student, Service,
Business and Housewife.
4. Geographic factors:
Geographic segmentation calls for dividing the market into different geographic units. At present Mutual
Milk Products ltd. Local distributor of Arla Foods has divided its entire geographic market into eight
major marketing regions:
Segmentation and Target Consumer Market of Dano

Types of VArlable factors

Empirical factors

Target Areas

Geographic factors

Region

Dhaka-A, Dhaka-B, Dhaka-C,

Chittagong, Comilla, Sylhet,
Khulna, Barisal, Rajshahi

Demographic Factors

Age

Below 14;15-24,;25-34;35-44;45-54;
and above 54

Income

8000-10000; 10000-16000; 1600020999, 21000-25999; above 26000.

Occupation

Student, Service, Business and

Housewife.

Psychographics factors

Social

Lower, middle and upper,

Behavioral factors

Benefit, Loyalty
Status

Hard Core loyal

Shifting loyal
Switchers

Positioning Strategy of Dano Milk Powder

Positioning is one of the integral parts in the act of differentiation. Its purpose is to differentiate the
companys offer from that of the competitors. For Arla Foods, the positioning & differentiation of its
product is even more important to continue the previous good quality of the product of the company to

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reemphasizes their distinct marketing approaches features and practices. Arla Foods should
differentiate its offer in the following:
1. Product differentiation
2. Image differentiation
3. Service differentiation
1. Product differentiation
Features arc a competitive tool for differentiating the companys product. Some features are as follows:

Arla Foods

nutritional experts working close co-operation with food

manufactures

to

incorporate particular dietary advantages in their products, often the specific needs of defined
customer groups: infant formula for babies. Drinks for the highly active, clinical nutrition for
those suffering or recovering from illness and fortified foods for people with special nutritional
needs.

Production plants have Kosher and Halal certificates that means products are approved for
Kosher or Halal use.

Instant milk powder is more rapidly soluble. The difference between instant and regular milk
powder is mainly the larger milk powder grain size which is obtained by various Spray drying
system.

Dano milk powder is 100% free of artificial additives and preservatives.

Guarantees the health of Danish cows and the safety of Dano milk powder are performed strict
and regular veterinary control.

2. Image Differentiation
Arla Foods promotes its image as a quality performer. The singular message must be expressed in
symbols, written and audio / visual media, atmosphere and events. Here we review their major media
for linage communication.

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Symbols:
A strong image consists of one or more symbols that trigger company or brand recognition. The
company and brand logos should design for instant recognition. Arla Foods should promote their
symbols in such a way that it will be synonymous with the Quality performance of the company.
Written and audio / visual media:
The chosen symbols must be worked into advertisements that convey the personality of the company or
brand. The acts will attempt in establish a story line, a mode, a performance level something distinctive.
The message should be replicated in other publications, brochures, and catalogs. The company's
stationary and business cards should reflect the same image tone the company wants to convey.
Atmosphere:
The physical spaces, in which the organization produces or delivers its products, become another
powerful image generator. Accordingly the interior designs of other and atmosphere of the building
should pose image of high technology and quality performer. A customer visiting company office should
watch a hassle free working environment.
Events:
A company can create an image through the type of events it sponsors as well as social events which
would help to define the image, status and quality of Arla Foods.
3. Service Differentiation
Arla Foods can find many other ways to add value through differentiate its services to give their
customers. The service they provide needs to be as specificto individual customer as possible. To this
end, they have divided their activities among four units, committed to maintaining the most up-to-date
knowledge and skills relevant to their market segment.
a) Ingredient sales
b) Industrial Ingredient
c) Consumer product
d) Contract manufacturing

Ingredient sales:

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Nor all customers need the technical service that goes along with their tailor-made solutions. Arla
Foods international network of local representatives ensures easy contact lo customers round the
world. And, because they understand exactly how important it is for supplies to arrive punctually and
in superb condition, they1 have developed a sophisticated logistics system - guaranteeing reliable, ontime deliveries of ingredients that are fully in accordance with local legislation.
Industrial Ingredients:
To provide the customers with the best possible service, they have divided this sector of their business
into three business units-each one accommodating the specialist expertise and facilities relevant to
their application area.
Consumer products:
Arla Foods Ingredients milk powder products for retail sale are much more than milk powder alone.
Consumer product team is dedicated to meeting the nutritional needs of all age groups and ensuring
that regional taste preferences are satisfied. To achieve this goal, they conduct regular surveys to find
out exactly what the consumers on specific markets want from milk powder, how they use it and how
much they consume. The information obtained forms the basis for current consumer range and future
developments.
Target Market and Potential
Company target market focus on four main areas
Mother and child
Active living
Healthy recovery
Conscious consumer
i) Mother and Child:
The right nutrition of the right quality is paramount throughout life, in infancy it is more important
than ever. Far the new-born child, proteins are important building blocks for healthy growth. But
sometimes the best source of this nutrition - maternal breast milk - is not available.
ii) Active living:

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Professional sports people who push their physical performance to the extremes deplete their energy
reserves and degrade their muscular balance, creating a need for an extra supplement of energy and
protein. Before, during and after sporting activity, it is essential for the body to receive the right fuel to
keep on going and the optimal nutrients to minimize bodily wear and tear.
iii) Healthy Recovery:
As we grow older, our general slate of physical well-being becomes even more dependent on (his
lifestyle and eating habit we choose to adopt. A die! that adapts to these changing physical
requirements is an important means of maintaining good health in the third age and warding off illness
and diseases, a number of which are lifestyle and die I related.
iv) Conscious Consumer:
Busy people need energy and strength so they can give their best at work and play, mental challenges
and everyday stress put the body and mind to the test - and that calls for an additional helping hand in
the form of well-balanced nutrition. From the above all segments consideration milk powder market is
expanding with time through change of consumers taste of fashion, out looking, purchasing behavior,
attitude, diversification use and necessity product of daily life.

SWOT Analysis:
Strength:
Wide Recognition:
Arla Foods Ingredients is an independent, company within Arla Foods, Europe's largest dairy group. It
gives the strength and solidity of a large organization and, at the same time, the flexibility of a much
smaller business, enabling us to react promptly and efficiently to customer needs.
International Brand Image:
In many parts of the world, DANO milk powder brand ii, household name. The market leader in
Yemen and well established in Bangladesh, DANO is widespread in many Middle Eastern countries.
Talented Workforce:
Arla Foods Ingredients employs more than 1,700 people worldwide, selling more than 301,000 tons of
powder milk products a year to some 100 countries. Mutual milk Products ltd. distributor of Arla
Foods Ingredients established a packing plant in Bangladesh on December 2004. The packing plant
employs 40 talented workforces with another 10 to come. Talented workforces are engaged in
marketing activities to promote their brand and increase sell to the consumer,

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Superior Technology:
Ongoing research continues to reveal new ingredients and new opportunities to use them. Within
company research and development department, company project managers, technicians and
laboratory assistants are dedicated to anticipating the future needs of the market and optimizing the
products and production processes of Market and optimizing the products and production processes of
customers.
Better Product Quality Relative to the Rivals:
As mentioned earlier Arla foods' maintains its consistent high quality and excellent flavor of Dano
milk powder in production process through superior technology, thus Dano milk powder is always in
an advantages position compare lo its competitors Presently new packing plant establish in
Bangladesh lo meet up demand of consumers of their competitors do not have the packing plant.
Distribution System:
Distribution system of Dano milk powder to the retailer's outlet throughout the country is maintained
proper channel and frequently company personnel visit to retailer's outlets one day per week. A market
survey report found that retailer's positive attitude about satisfaction with current procedure of
distribution system of the company.
Team Work:
Marketing is a networking system of which ream work is essential part to achieve the organizational
goals. Team works of the company is another strategy to operate smooth business by the
organizational plan and it is continuous monitored by the higher authority of the company.
Promotional Activity:
It is found that majority retailers express their opinion about sales promotion and advertisements of
DANO milk powder are not sufficient to compare with competitors in Bangladesh.
Weakness:
Weakness of Dano is to main collaboration with the Denmark Headquarters. There are some quick
decisions which the country director or the distributor has to take which may be less acceptable to the
foreign managers. Its very natural and can be handled by proper internal marketing. Relationship with
the employees and channel members is very crucial to the organization to proper in a highly
competitive market like Bangladesh.
Opportunity:
Growing Marketing Demand:

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Now a day's milk is essential part for every man but we could not get sufficient supply of liquid milk.
In this regard consumers are becoming habited with powder milk instead of liquid milk. The use of
powder milk is becoming diversified such as Hotel, Restaurant, Coffee House, Fermented products.
Other than that there are Bakery products, mother and child, active living, healthy recovery, conscious
consumer etc. So, milk powder market of Bangladesh is expanding with time and buying behavior of
consumers is changing due to changing of life style & attitude.
Increase Trade Barriers:
After the Chernobyl disaster in 1987 the Bangladesh Government temporarily suspended import of
milk and milk products from me European countries. This, along with the trend of increasing the price
of milk and milk products in the global market, has led to a fresh initiative towards self-sufficiency in
milk production.
Legislation:
World Health Assembly endorsed an International Code of Marketing of Breast milk Substitutes in
May 1981. The International Baby Fond Action Network (1BFANJ, a coalition of more than 140
breastfeeding promotion groups, monitor.1; the implementation of the Code worldwide. 24 countries
have passed legislation including all or almost all provisions of the International Code. Governments
of 31 countries implemented many but not all provisions as Jaw.
Threat:
Danos biggest threat is the Nestle S.A. Nestle has multiple milk product categories which can be
referred as brand extension. They have their own supply chain management and industrial plant. But
Dano only carries the distribution process in Bangladesh. As a result Dano Milk powder is lit bit
expensive than Nestle Milk products. Other than Nestle there are local milk powders like Fresh, Mark
etc. which gains the upper hand as a local product in the field of tax regulations.

The Strategic Planning Gap:

Intensive Growth:
Dano is focusing in the market penetration strategy to increase their growth rate. They are giving high
quality product with reasonable price. Their milk comes from Denmark. They are way ahead of their
competitors in terms of quality and pricing. Though the competitors are rich in promotion but Dano still
leads in sales. They are doing business for decades in Bangladesh.
Integrative Growth:
Mutual Trading company ltd.

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Diversification Growth:
Dano is not concentrating on their diversification growth. Because their current business is profitable, that
they do not require to step into diversification strategy.

Pestle Analysis:
Political:
The political arena has a huge influence upon the regulation of businesses, and the spending power of
consumers and other businesses. You must consider issues such as:
The government policy influence laws that regulate or tax are strongly affected the business in
Bangladesh. The government here is the very powerful agent for establishing the rules and regulation. For
that reason the companys business are affected. Dano is also fall in this region.
The government's position on marketing ethics is very influential in Bangladesh. Government has no such
kind of marketing rules about the advertising and marketing activities. The company can create any kind
of advertisement and can circulate it rather than only the political issue.
Economical:
Marketers need to think the state of a trading economy in the small and long-terms. This is particularly
true when preparation for global marketing. Dano requires looking at:
Interest rates in the Bangladesh for the food industry are very low. Government provides the loans
through the specialized banks such as Bangladesh Agriculture Bank. The interest rate is very low at that
case. Another way government also circulates the circulation that the commercial banks should invest in
those sectors.
Long-term prospects for the economy Gross Domestic Product is very bright. Day to day the economy is
developing and peoples living standard is becoming high because of the foreign direct investments and
SME loans make the people self-independent by doing small business.

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Figure 1: Bangladesh GDP PER CAPITA PPP

From the above figure we get an idea of GDP PER CAPITA PPP of Bangladesh. On the
horizontal axis lies the years and on the vertical axis lies the dollars. By observing
the above graph we see that the rate has increased. In 2004-2006 sessions the rate
was $ 1094.10 and in 2013 onwards the rate reached to $ 1622.94. There is a
dramatic change in the GDP. So, we can conclude that peoples buying power and
ability have increased significantly.

Figure 2: Bangladesh Unemployment Rate

From the above figure we get an idea of Unemployment Rate of Bangladesh. On the
horizontal axis lies the years and on the vertical axis the rate of unemployment. We
see from above the rate was 5.1% in January 2010, but now it has dropped down to
4.5%. So, people are joining the workforce and contributing more to our economy.
We can conclude that people now have a chance to spend more and have a diligent
life.

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Figure 3: Bangladesh GDP Growth Rate

From the above figure we get an idea of the Growth Rate of GDP in Bangladesh. On
the horizontal axis lies the years and on the vertical axis the rate of growth. Our
GDP is now 6.01% which is a good indicator of our economy. We are ahead of many
influential third world countries. Business in Bangladesh is now in a boom.
Social:
The social and cultural influences on business vary from country to country. It is very important that such
factors are considered. Factors include:
The dominant religion in Bangladesh is the Muslim and the Muslim also drinks the milk product very
frequently. The second dominant religion of Bangladesh is Hindus. They also need the milk in their
various occasions. This goes same for the Christian and Buddhist people.
Technological:
Technology is very important for spirited advantage, and is a main driver of globalization. Consider the
subsequent points:
Technology allow for food and services to be made additional cheaply and to a improved typical of
quality. The USD technology is very useful for the preserving the milk without the refreezing.
Technologies present consumers and businesses additional pioneering products and services such as USD
Milk, High tech packaging, the standard maintaining etc.
For distribution and communication altered by new technologies e.g. the innovation of freezing system
lorry, track the position of the distribution vehicles etc.
Legal:
The organization, in which environment is playing should comply the rules and regulation of that
government. Dano gets crepitate from the Bangladesh Standard Testing Institute for operating in the
country. They also give the tax and other charges to the government. But recently Dano was accused of
using melamine as raw material in their product; as a result there was a legal complicacy. Not only Dano
but other foreign milk had to suffer a lot. The Supreme Court of Bangladesh banned foreign milk products
in Bangladesh. But after taking all the circumstances into account the court repudiated its former order

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and made foreign milk products legal in Bangladesh. There was no melamine found in Dano Milk
powder.
Environmental:
Recent a day the environmental issue is very much impotent for the survival any of the organization. The
packages those are used by the Dano that is perishable and can be recycled. For that reason the
environment is not polluted. And Dano milk packaging process is highly supervised by experts so that our
product doesnt get contaminated. Even our packaging materials are upgraded; we use the recycle symbol
in our packages to encourage our customers to take part in the environmental safety.

The Buying Decision Making Process

Five Stage Model:
1) Problem Recognition: In Bangladesh liquid milk is mostly supplied by local dairies. They
include in home delivery. But the milk can contain bacteria, so people prefer powder milk for
their childrens growth and strength. Middle class and upper middle class people are very health
conscious. Dano focuses on health factors and their product contains high calcium and vitamins.
Their raw materials are highly processed to satisfy the customer needs and wants.
2) Information Search: For powder milk products consumers rely on the advertising and
commercials, word of mouth of their family, friends, and relatives. Also they take suggestion of
the retailers. Powder milk is a Fast Moving Consumer good (FMCG), so people tend to take less
time to search information for the products. It is not a sophisticated expensive product rather than
a normal day product.
3) Evaluation of Alternatives: When people get buy one and free items that tend to motivate their
purchase behavior. When choosing milk powders customer seeks for popular brands for their
higher credibility in the market place. They see the packaging of the product and the retailers
shelf. Retail management is a crucial factor for Dano milk powders business. Dano is doing
business in Bangladesh from the very early of its independence. It has a high reputation in the
market. People who were parents now and choose Dano milk for their children where once
children; they used to drink Dano.
4) Purchase Decision: Dano is in Bangladesh market for decades. They have reasonable and
competitive pricing strategy, their distributor and retail management is superior to other brands.
Consumers seek free offer and gift items from their purchase, even they want discounts. The risk

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than comes with Dano is the physical risk with relates the health factors. Dano comes with high
quality packaging. So, the risk is minimized.
5) Post Purchase Behavior: If customer is satisfied with the use of product than repeated purchase
is more likely to occur. If dissatisfied the result is vice versa. Consumers have a tendency of
cognitive dissonance. They want to do a repeat purchase then they need something more than the
product. Dano does many Public relation (PR) activities which they involve school going
children. They want to make customer relationship management, were they sponsor different
social welfare events. Customers like see themselves appreciated by their peers when they use
Dano. Now, Dano is available in sachet packs for people who have budget restrain. 73% of
Bangladeshi population lives in the rural areas; they have limited income but contain a huge
target market. Dano is making sachet milk powders for lower income people. Dano wants to see
loyal customers and wants to retain their regular customers.

Core Values of DANO:

Dano Means:
Holistic Development: DANO has the nutritional goodness that helps the child grow up healthy
to face the challenges of life. It is specially formulated for complete development of children.
Experience & trust: DANO benefits from Nestls nutrition and milk products know how. It has
been in the family for generations and has always symbolized the guarantee of constant premium
quality.
Maternal Love & Wisdom: DANO is an intelligent and loving choice by the mother to give her
child the best. It is motivated by an ongoing and deeply felt love between mother and child.

Brand Personality:
Warm & caring: Dano understands that bringing up a child is a mothers main concern and it acts
as a close companion to help her accomplish this aspiration task. It is not elitist. It has deep
human feeling.
Dependable: DANO is reliable and will always find ways to satisfy the nutritional needs of
growing children.

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DANO

Experience: DANO is knowledge and is a recognized authority around the world on child feeding
and well-being.
Positive: DANO shares the positive outlook on the world and aspiration that come from the joys
and hopes of parenthood.
Specialized & Evolving: DANO understands that children have special nutritional needs that
change, as they grow older.
Universally liked: Both children and mothers like NIDO.

Implementation of Product-Market Expansion Grid

Strategies:
There are four Product-Market Expansion Grid Strategies:
Market penetration
Market development
Product development
Diversification
Market penetration:
A strategy for company growth by increasing sales of current products to current market segments
without changing the product. DANO follows this product market expansion grid. They produce
products and sale in same market segmentation. They produce DANO Milk and sale it inside &
outside the Dhaka city.
Product development:
A strategy for company growth by offering new or modified products to current market segments.
DANO does not follow this product market expansion grid.
Market development:
A strategy for company growth by identifying and developing new market segments for current
company products. DANO follows this products market expansion grid. DANO starts business in
Denmark. Now they are exporting their products outside the country.

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DANO

Diversification:
A strategy for company growth through starting up or acquiring businesses outside the companys
current products and current markets. DANO dont follow this products market expansion grid.

Companys Strategies for Strategic Formulation:

There are three Strategic Formulation:
Overall cost leadership.
Differentiation
Focus
1. Overall Cost Leadership:
Dano has the supreme distribution strategy of powder milk business industry in Bangladesh. They
have efficient channel management system than their competitors. Their suppliers are trustworthy and
have a good reputation in the market place. By doing business in a competitive industry in
Bangladesh for a long time they have mastered the strategy of cost reduction. They have a high
market share than their competitors.
2. Differentiation:
Danos milk quality is high and they have a sophisticated process of packaging. The team or
department responsible for their quality measures contain high skilled and experienced workforce.
They have a supreme monitoring and controlling unit for quality control.
3. Focus:
Danos target segment is Bangladesh. Specially parts of the country where powder milk has a high
demand. People who value health are eager to buy the products. Though, their business is wide spread
in Bangladesh there monitoring unit is performing excellently. They have no room for compromise in
terms of quality.

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DANO

Value-Chain Strategies:
It involves entire supply chain managementmeaning upstream and downstream value-added flows
of materials, final goods and related information among suppliers, the company, resellers and final
consumers.Dano today is placing greater emphasis on logistic for several reasons. First, company can
gain a powerful competitive advantage by using improved logistics to give customers better service of
lower price. Second, improved logistics can yield tremendous cost savings to both the company and
its customers. Third, the explosion in product variety has created a need for improved logistics
manage. Finally, improvements in information technology have created opportunities for major gains
in distribution efficiency. Using sophisticated supply chain management software, web-based
logistics system, point of sales scanners, uniform product codes, satellite tracing, and electronic
transfer of order and payment data, companies can quickly and efficiency manage the flow of goods,
information and finances through the supply chain.

Competitive Picture:
In order to strengthen their distribution strategy, the players provide incentive for the retailers in order
to shelve and promote their products to the consumers. These strategies help them to persuade the
retailers so that they can offer and these products. The retailers even persuade the consumers to buy
these products of companies whose offers satisfy those most. The benefit segment is dominated by
major players and their respective value share in the market is as follows:

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26
MILK POWDER BANGLADESH
Brand

Trade Offer

Diploma

They offer a margin of 4 taka to the

retailers with occasional gifts like
wall clock spices item or show

NIDO

pieces.
They offer the highest trade margin
ranging from 4 tk to 4 tk. They too
provide the same trade offers.

Red Cow

Their distribution and production is

the highest among these 5.

ANALYSIS OF COMPETITION:
The competition game is not that great due to lack of players in this segment and lower demand. But
there are several factors that make differences in the sale of these products.
Expiry Date:
Usually, these products have a long life span. Nido is the most successful among these three due to its
longer expiry time frame.
Shelving:
Due to quality factors, these products have to be stored in dry place. Retailers have to make choices
on which products to store in which places as there are different sizes of shops. Where they store the
product is very much important issue. The product cannot destroy easily so they can store a lot of
amount of the product.
Income Segment Target Market:
This is the most important factor. In analyzing the demand, we must see the consumers who are
buying the product, which is the reason behind the manufacture and investment.

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DANO

Red Cow is very much demandable product and it is used almost every family. From lower middle
class to the upper class people everybody use the products.

INDUSTRY Analysis through Porters 5 Forces Model:

This Milk Powder industry has got some critical factors. The most important of them is pricing.
Although Brand is very important aspect by which we can persuade consumers to buy the product but
it is a part of promotion. The depreciation costs, fixed assets costs, production costs, packaging costs,
salary and lot of other factors are critical, but the pricing is set considering these factors. The industry
is mainly focused on the product taste, price and availability. 1 taka or 2 taka price difference is a key
factor in pushing this product into the market. Initially, these products are pushed into the different
outlets (Shelving) for them to be available into the market, and then through promotion, they are
pulled by the consumers.

Michael Porters Five Forces Model:

1. Threat of New Entrants: Medium pressure

Entry barriers is relatively high because, Dano has an outstanding distribution system,
location, brand name, and financial capital to fend off competitors.
Dano has competitive advantage because of quality, price and distribution.
Dano has absolute cost advantage over other competitors.

2. Rivalry Among Establish Companies: Medium Pressure

Currently, there are four main Companies that exists in the same market as Dano: Nestle
Nido, Diploma, Anchor, and Farmland.
Dano has experienced tremendous growth in markets and have defined their niche quiet
effectively.
Mature industry life cycle.

3. Bargaining Power of suppliers: Medium to High pressure

Since Dano has high market share, they offer a lot of business to wholesalers and grocery
shops. This Gives Dano a lot of power, because switching to a different supplier would create
a scare to the suppliers.
Dano deal with one large supplier Arla foods, who have more bargaining power than small
suppliers.

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DANO

4. Substitute Products: Medium pressure

There are some substitute products such as liquid milk, but that do not offer convenience and
low pricing.
The customers do not have choice of going to other brands because of quality and low .
Availability of Dano product in the grocery shops is an advantage for the company.

5.The Bargaining power of Buyers: Low pressure

The individual buyer has little to no pressure on Dano.

Buyers who purchase bulk of quantities they can bargain.
Consumers have some questions about Danos pricing techniques.
Consumer could shop at a competitor who offers comparable products at comparable prices,
but the quality is lost.

Holistic Marketing Strategy of Dano:

Internal marketing of DANO Bangladesh:

Senior management:
Ahmed Kabir, Managing Director at DANO MILK BANGLADESH
SanayetKabir Khan, CFO, Arla Foods Bangladesh Limited
Md. Auhidul Islam, HR & Admin in Charge at Arla Foods
Hiring: DANO Bangladesh hires people through different ways:
Newspaper

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DANO

Internet
Website
Motivation: DANO Bangladesh provides many motivational activities for their employees thus the
employees serve the best afford. Some motivational activities.
Bonus
Transport facilities
Mobile facilities
Residence facilities
Attractive environment
From the training program the employee benefited by the following way:
Improves morale of employees: Training helps the employee to get job security and job satisfaction.
The more satisfied the employee is and the greater is his morale, the more he will contribute to
organizational success and the lesser will be employee absenteeism and turnover.
Less supervision: A well trained employee will be well acquainted with the job and will need less of
supervision. Thus, there will be less wastage of time and efforts.
Fewer accidents: Errors are likely to occur if the employees lack knowledge and skills required for
doing a particular job. The more trained an employee is, the less are the chances of committing
accidents in job and the more proficient the employee becomes.
Chances of promotion: Employees acquire skills and efficiency during training. They become more
eligible for promotion. They become an asset for the organization.
Increased productivity: Training improves efficiency and productivity of employees. Well trained
employees show both quantity and quality performance. There is less wastage of time, money and
resources if employees are properly trained.

INTEGRATED MARKETING OF DANO MILK POWDER:

MARKETING MIX (4ps)
Product:
They will improve their product quality. They will use quality raw materials in product. They will
bring a differentiated product Dano Milk powder for children and teenagers. Product will be different

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DANO

in quantity for different price. They will provide 25gm, 75gm, 400gm, and 1000gm packet for Dano
Milk powder. Building a strong brand image is an integral part of their product strategy. The brand
and logo will be displayed on the product and its packaging will be so attractive and durable. The
ingredients that have been used previously in the dano Milk Powder is shown below through a table:
Ingredients Each 100 gm.:
Protein 26, Lactose 38, Fat 26, Moisture 4, Minerals 6, Calcium 0.97, Phosphorus 0.75, Vitamin A
1092, Riboflavin 1.48, Thiamine 0.26

Price:
Price of product lower than other existing competitors. We will price Tk480 retail price with
wholesale price Tk460 for each 400gram dano milk powder packet when price of same quantity of
Diploma, Red cow is more thanTk460. Besides we will price Tk950 for 1000gram packet.
Place:
To make Dano Milk Powder available everywhere so that target market can easily get the product.
They will create strong distribution channel for this purpose.
Distribution Channel:
This function can be easily accomplished by a strong distribution channel. A distribution channel
performs the work of moving product from producers to final consumers. A strong distribution
channel is the only way to fulfill the purpose of making a product available to its users.
Promotion:
They will bring many changes in the existing promotion system for Dano Milk powder. Current
promotion will include TV commercial, Print Media, Billboard, Radio, Selling promotion etc.
Television Commercial
Print Media

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DANO

Radio

Social Responsibility marketing:

Performance Marketing:
Knowledge
DANO keep ourselves abreast of food safety developments and ensure that we have the information
and knowledge required to take preventive action.
Product Quality
DANO deliver products and ingredients, which comply with the necessary standards and
specifications.

Foreign Substances
Prevent and protect the consumers from being injured by foreign items and substances in their
products.
Hygiene
Offer safe products by using hygienic processes and facilities and by following clear routines for
personal hygiene.
Product Recall (ETHICS)
If DANO detect a problem with our products we protect consumers by recalling products that are
judged to be hazardous to health.

Environment
Plant
Design new facilities and procure equipment to meet or exceed relevant environmental standards.
Resources
Saves energy and reduce material consumption by continually monitoring and optimizing
operations.

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DANO

Recycling
Reduce waste from operations by maximizing the reuse, recycling and recovery of materials from
waste streams.
Climate Change
Contribute towards a reduction in global warming by striving to continually reduce their
Greenhouse gas emissions

Relationship Marketing
Channels of DANO Bangladesh limited:
Channels are a common group of point of purchase which provides similar services to similar set of
customers with similar desires. Different channels serve different customers with similar set of
desires. Channels are created so that it can be analyzed and managed in groups
These set of channels can be identified based on four criteria. They are:
Location: The first criteria Where the store is situated, like urban area, rural area etc.
Structure: The structure of the store, like concrete building, tin shed building etc.
Goods sold: What type of goods are sold here, like grocery items, cosmetic etc.
Type of customers: What kind of customers come to the store, like lower income group, higher
income group, male female etc.
Importance of channel:
Categorizing channel is very important in order to understand the retail environment and relate that
with the company. There are also other factors which can be addressed as importance of channels is
given below:
Distribution of product in cost effective way
Reducing damage rate of product
Allow brands to reach their full potential
Ensuring 100% sales in every launch & re-launch
Knowing about the buying behavior of different type of customer

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DANO

Maintaining better trade relations

Product Life Cycle:

There are four stages in the life of a product depends on the time span, the product and the growth level of
the product that in which states it lies.
1. Introduction
2. Growth
3. Maturity
4. Decline

In case of DANO Milk, we can say that the Dano lies in its maturity stage for the following reason,

Huge share in the market

Maximum profit

Most competition

Brand loyalty develops

Promotion and advertising costs is lower

Financial Statement
Budget Forecasting for DANO Milk Powder:
Unit Cost:
Unit cost of each 400gm DANO Milk Powder is:
Unit cost =Variable Cost + Fixed Cost/Expected Unit Sales

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MILK POWDER BANGLADESH

= 362 + 29000000/1000000= 391/Markup Price:

After adding 15% markup to the cost our markup price is Tk460.Markup is shown below:
Markup Price = Unit Cost/ (1-0.15) = 391/0.85= 460/Break-Even sales:
Break-even point for each 400gm DANO Milk powder is given by:
Break-Even Sales= Fixed Cost / (Markup Price Variable Cost)
= 29000000/ (460 362) = 295918 units

Break-Even Revenue:
Break-Even Revenue for different size of DANO Milk Powder will be different.
Here Break-Even for only each 400gm Milk Powder is given by:
Break-Even Revenue = Break-Even Sales * Markup Price
= 295918 * 460= 136122280/Break-Even Point:
This Break-Even sales and revenue will be different at different price. A chart is given below
which shows different Break-Even sales for different price.
Price Unit

Demand
Neededto
Break Even

Tk. 450
Tk. 455
Tk. 460
Tk. 465
Tk. 470

3,29,545
3,11,828
2,95,918
2,81,553
2,68,518

EvenExpecte
d
UnitDemand
atGiven Price
14,50,000
11,60,000
10,00,000
8,78,787
7,83,783

TotalRevenue

Total Cost

Profit

65,25,00,000
52,78,00,000
46,00,00,000
40,86,35,955
36,83,78,010

55,39,00,000
44,89,20,000
39,10,00,000
34,71,12,894
31,27,29,446

9,86,00,000
9,88,80,000
6,90,00,000
6,15,15,061
5,56,48,564

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DANO

Cause Marketing (Recommendation):

Dano which is Denmark based company takes the revenue to Denmark. They can donate a part of
their revenue suppose 2% for the poor childrens education. People who buy a Dano Milk Powder
suppose for BDT 500, BDT 10 from their purchase will go for the education of poor children.
Children are a huge target market for Dano, so consumers will be motivated to buy Dano.

Educating poor children will develop the socio-economic condition of our country.
Dano can also make a campaign against child labor movement in Bangladesh.
In Childrens Day they can make events for autistic children and also get attached to the

movement of establishing the rights of autistic children in our society.

Dano can also organize seminars on health development regarding childrens health. This is way
where they can promote Dano not as a brand or product but as a contributor to resolve the social

issues of country.
They can go to the rural areas were people are not aware of their off-springs health and make

them aware of health issues which can strengthen up their rural marketing.
They can also to do CSR activities for children who are suffering from cancers or equivalent

diseases. They can help the acid victims in raising money for their recovery.
They can sponsor the TV shows related to Children entertainment.
They can distribute winter cloths among the poor people in the winter season.

Conclusion
The present study revealed that brand preferences of milk powder according to consumers choice
accordingly followed by highest preference to lowest preference are: Dano>Nido> Diploma>Kwality>
Fresh>DANO. It is found that most of the consumers opinion about Dano milk powder in relation to the
features of Quality, Taste and Availability are good, and feature of Price is moderate.
The present study showed that the retailers rank of different brands for milk powder in relation to various
aspects these are- Availability, Price, Quality, Hygienic, Packaging, Sales Promotion, Advertisement,
Distribution System, Steady Delivery and Salesman Pushes. From all features consideration, Nido brand
is the highest preference among the retailers and Dano is the second highest rank position.

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Bibliography:

Marketing Management-Philip Kotler 11th edition, Prentice Hall

Advertising Principle & Practice - William Wells and Sandra Moriarty, 7th edition
Prentice Hall.
Lamb, W., Hair, J., McDaniel, C. (1998), Marketing, (4th edn), South-Western College

Publishing, Cincinnati.
Wilson, S., R. M., Gilligan, & Colin. 1997. Strategic marketing management: planning, imple
Mentation and control (2nd Ed.). Oxford: Butterworth-Heinemann.

Website

http://www.arlafoodsingredients.com
http://www.bdyellowbook.com/catalog/Food___Beverage/Food_Products/Arla_Foods_Ingre
dients_Amba-info23700.html
http://www.tradingeconomics.com/bangladesh/gdp-per-capita-ppp
http://www.tradingeconomics.com/bangladesh/unemployment-rate