Hugessen's research has shown that a substantial portion of the volume of margarine purchases is by people with large families, particularly ones with four or five members, who tend to have a lower than average income. At the same time butter consumers tend to be families without children or with older children. Hugessen also noticed that people consumed margarine mainly on health and price reasons and not exclusively on taste. Another consideration for Hugessen to think about is the fact that Quebec is Becel's weakest market and strongest market for butter. Hugesson also has to take into account the fact that the Europeans were strongly considering using the Canadian advertising idea. Becel falls under the food division of Lipton. Lipton also markets personal products, and they feel that these products need more marketing budgets than Becel. This means that Hugessen will not have quite as much funds to work with, as he may need.
Considering all the facts and circumstances surrounding this case, the problem in which Ross Hugessen is faced with is the problem of market share growth. Hugessen has to find a way to market Becel Margarine to new customers. He must also make sure that he keeps his current customers Other corporations selling margarine and butter are coming on strong and soon they will be taking customers away from Becel if Hugessen does not do something about it.
Alternatives
The option approaches for Ross Hugessen to market Becel are as follows.
1. Becel could be marketed towards the Quebec population. Becel has somewhat failed to penetrate the Quebec market in the past. Quebec has been Becel's weakest market while it has been butter's strongest market. Becel could try to penetrate this market by making more French related advertisements. They would also have to change the colour of the margarine if it is yellow, as there is government regulations against coloured margarine.
2. Becel could use a strategy that emphasizes its great taste and low price. In the past Becel has always emphasized its healthy qualities and not really focused too much on taste or price. The health strategy seems to have run its course so Becel could try emphasizing its great taste as well as its cheap cost compared to butter.
3. Becel could leave things the way they are. At this point Becel still has a significant share of the market, 31.9%. They also have a very high customer loyalty rate, which is 50%. They could stick with the strategy they have been using all along.
4. Becel could market their product to smaller families with few children and or older children. In the past a substantial portion of the volume of margarine purchased is by people with large families. Butter has dominated the market consisting of small families with no children of older children. Becel could use marketing strategies centered on these smaller families.
5. Becel could use a combination of marketing their product to smaller families and to people concerned about health taste and price. Becel could advertise their product to show smaller younger families enjoying the health benefits of eating Becel Margarine while also enjoying the great taste, and low price.
The decision criteria that will be applied to the above options are as follows:
1. The selected option must be able to keep current customers. In order for Becel to grow they have to maintain the customers they already have. They would have to keep the idea of healthy heart going. If they lose the health part of their margarine they will lose a lot of customers.
2. The selected option must be directed towards obtaining new customers. In order for Becel to grow they must penetrate new markets. They have to take customers from other corporations and gain customers in different areas of Canada.
3. The selected option must meet government regulations. Before Becel can begin producing a product they must make sure it is within government regulations. For example it must be the correct colour.
4. The selected option must be healthy have a good taste and a low price. These are the three most important aspects of margarine. There are a few more people that look for health than price or taste but all three of them must be met in order for the product to survive.
Decision
Each of the options has been assessed against each of the decision criteria as follows:
Option 1: Marketing the product towards the Quebec population.
Criteria 1- Marketing the product towards the French population wont make the health argument any stronger to the English population but Becel could present the idea of healthy heart in French in order to penetrate that market. Thus, this option will not affect the current users. It is possible for this option to meet this criterion.
Criteria 2- Marketing Becel to the Quebec population would definitely mean many new customers for Becel. They would have to make sure that they have a strategy that would be effective on the French culture. Thus if they do they will be gaining new customers. The option meets this criterion.
Criteria 3- The factor of meeting government regulations may be a problem when trying to market Becel in Quebec. The Quebec government has different regulations than the rest of Canada. For example the margarine must be white and not coloured. Meeting these regulations may be very costly. The option does not meet this criterion.
Criteria 4- If Becel uses this option nothing will change with the taste, price, or health issues of the product. Therefore this option meets the criterion.
Option 2: Using a marketing strategy, which emphasizes Becel's great taste and low price.
Criteria 1- This option could perhaps lose customers because in the past customers have bought Becel because it is healthy. If Becel begins concentrating their advertising on just taste and price people may think that it is no longer the healthiest margarine around. Therefore, the option does not meet this criterion.
Criteria 2- This option would definitely bring about new customers. It would penetrate the market of people who are looking for great taste and low prices that are not concerned about healthy eating. Therefore this option meets the criterion.
Criteria 3- The Company may have to change the actual product produced if they want to market it as great tasting. Therefore government regulations will be a concern. Thus, this option does not meet the criterion.
Criteria 4- This option will produce a product with good taste low prices and it will also still be healthy. Therefore it meets the criterion.
Option 3: Becel could leave their product the way it is.
Criteria 1- With this option Becel may lose a few customers who decide that there is healthier margarine's out there but the majority of Becels customers will stay loyal. Becel currently has the highest loyalty rate of any brand. Therefore, they will not be losing a significant number of customers. Thus, the option meets the criterion.
Criteria 2- The option of not changing anything will definitely not attract any new customers. Therefore, this criterion is not met.
Criteria 3- Considering the product is not changing anything at all. Becel will not be breaking any regulatory rules. Therefore the criterion is met.
Criteria 4- This option will keep its slogan about being healthy but even though it may be affordable and good tasting people may not know this because they do not market it to show these advantages. This criterion is not met.
Option 4: This option is to market the product towards smaller families.
Criteria 1- Using this option could result in a loss of current customers. Considering the product has been bought by a majority of larger families, marketing towards smaller families could turn some people off the product. The option does not meet the criterion.
Criteria 2- Using this option will bring about new customers. By marketing to smaller families Becel will be able to steal customers from butter. This option meets the criterion.
Criteria 3- By marketing Becel to smaller families they will not have to change the product in any way, therefore they will not have to worry about breaking regulations. This option meets the criterion.
Criteria 4- Marketing Becel to smaller families will not change the taste, price or health issues of the product. Therefore the criterion is met.
Option 5: This option is a combination of using marketing strategies to attract smaller families, and people with health concerns and people who are interested in price and taste.
Criteria 1- This option will keep current customers because it still focuses on the healthy side of Becel Margarine. Even though they will not focus as much on health the strong loyalty of the customers should keep them coming back. Therefore the option meets the criterion.
Criteria 2- This option will attract small families and people interested in taste and low prices. These are three markets that Becel has not really penetrated in the past. Therefore the option meets the criterion.
Criteria 3- This option will meet government regulations as they are not taking the product to other areas, nor are they changing it in any way. This option meets the criterion
Criteria 4- This option would definitely meet the demands for healthiness, taste and low prices. It will also allow people to see this in the advertisements. This option meets the criterion.
Based on the criteria outlined above, the best option for Ross Hugessen to go with would be option number five. This is the marketing strategy, which combines advertising the products great taste, low prices and healthiness. These advertisements will be centered towards smaller families.
This option is the best option because it meets every criterion. This strategy will attract new customers, while at the same time keeping old customers. It will not break any regulations and it will remain a healthy, good tasting, low priced product.
By using this strategy Becel should be able to find themselves once again growing in market share. Sooner or later Becel will probably have to try and make their product more internationally satisfying but for now this strategy will work.
