DEBERE BIRHAN UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

Department Of Management
MBA (Regular Program)
Course: Advanced Marketing Management

Title: Marketing mix element in Product Planning and Pricing Decision

Submitted To: Shifera Bekele/ Phd /

Submitted By:

Name Id No.

Mekonnen Dibu Id No.

Behailu Teshome Id No.

Welela Bekele Id No.

Habtamu Moges Id No.

Girma Asfaw Id No.

December /2017

DebreBerhan University, Ethiopia

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 ACKNOWLEDGMENT

We would like to extend our special thanks to our instructor Dr. Shifera Bekele (PHD) who
has giving his kindly guiding and insightful advice in the undertaking of marketing mix elements in
related to product and pricing and it helps to us to read more about the product planning and pricing
decisions. In addition, we would like to thanks Debre Birhan Dashen beer human resources,
general facility and sales managers for their vital information for this practical analysis.

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Contents
CHAPTER ONE: MARKETING MANAGEMENT...............................................................................................1

1.1. The concept of marketing.........................................................................................................................1

1.1.1 Product Planning.....................................................................................................................................1

1.1.3. Product Life Cycle..................................................................................................................................3

1.1.4. New Product Development Process........................................................................................................6

1.2. The Concept of Product Mix and Product Line Introduction to Branding, Packaging and Labeling........7

1.2.1. The Concept of a Product Mix and Product Line.................................................................................7

1.2.2. Branding.................................................................................................................................................8

1.2.3. Packaging and Package Defined...........................................................................................................11

1.2.4. Labeling Defined and Types of Labels.................................................................................................11

1.2.5. PRODUCT LINE.................................................................................................................................12

1.3. Designing and Managing Services.........................................................................................................13

1.3.1. The nature of services marketing....................................................................................................15

1.3.2. Marketing strategy for service firms...............................................................................................15

Differentiating Services......................................................................................................................................16

1.4. Pricing Decision.....................................................................................................................................17

1.4.1. Meaning of Price and Pricing in Marketing........................................................................................17

1.4.2. Factors affecting pricing decisions.....................................................................................................19

CHAPTER TWO...................................................................................................................................................23

2. PRACTICAL APPLICATION AT DEBRE BERHAN DASHEN BREWERY................................................23

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 2.1. Organization back ground of Debre Berhan Dachen Brewery factory.........................................................23

2.1.1. Historical background..........................................................................................................................23

2.1.2. Mission, vision and objectives of the company..............................................................................24

2.2. Major activity areas of the company.......................................................................................................25

Chapter Three.........................................................................................................................................................26

3. PRATICAL CASE ANALYSIS IN CASE OF DASHIN BEER S.C.............................................................26

3.1. Methodology..........................................................................................................................................26

3.2. Product Life Cycle of the company........................................................................................................29

3.3. Branding.................................................................................................................................................30

3.4. Marketing Strategy regarding managing service....................................................................................31

3.5. Dashen breweries Pricing strategy and objectives..................................................................................32

3.6. Gaps (limitation) Identified from and conclusions for Debre Berhan dashen brewery in product
planning and pricing decision function.............................................................................................................33

3.7. Recommendation....................................................................................................................................34

http://businessjargons.com/pricing-in-marketing.html.........................................................................................................35

Table 1 Product Life-Cycle, Characteristics, Objectives, and Strategies

Table of figure

Figure 1:- cycles of the product in terms of volume of sale in relation to time.

Figure 2:- picture of dashen beer

Figure 3:- picture of Balageru beer

Figure 4:- picture of Jano beer

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CHAPTER ONE: MARKETING MANAGEMENT

1.1. The concept of marketing

Marketing management is defined different scholars differently. For instance, Kotler and Keller ( 2008:
5) defined marketing management as "'the art and science of choosing target markets and getting,
keeping, and growing customers through creating, delivering, and communicating superior customer
value”. The American Association of Marketing also defines marketing management as the process of
planning and executing the conception, pricing, promotion and distribution of ideas, goods and services
in order to create, exchange and satisfy individual and organisational objectives (Grönroos, 1989).
Kotler and Keller, further states that the concept is used to determine what products or services may be
of interest to customers and the strategy to use for marketing mix (Kotler et al. 1996).

According to Mr. Jerome McCarthy “Marketing mix is a pack of four sets of variables, namely product
variable, price variable, promotion variable, and place variable”. In simple words marketing mix means
a marketing programme that is offered by a firm to its target consumers to earn profits through
satisfaction of their wants. Such a marketing programme is a mixture of four ingredients, namely
Product mix, Price mix, Place (Distribution) mix and Promotion mix. However, nowadays, the
marketing mix increasingly includes several other Ps like Packaging, Positioning, People and event. In
sum marketing management is can be well defined and understood by key concepts such as concepts:
A. Product Planning. Product planning involves: defining the meaning of a Product, Classification
of a Product, Product Life Cycle, New Product Development Process, The Concept of Product
Mix and Product Line Introduction to Branding, Packaging and Labeling, and Designing and
Managing Service [Nature of Service, Marketing Strategies for Service Firms, Managing
Product Support Service and also
B. Pricing Decision. Pricing decision involves defining the Meaning of Price, Pricing Objective,
Factor Affecting Pricing Decisions, General Approach to Pricing

1.1.1 Product Planning

Meaning of a Product,

Product is the main element of marketing. Without a product, there cannot be marketing. “A product is
anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy
a want or a need’’, (Kotler (pp 224–229)) Products can be goods, services or idea consisting of a bundle of

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tangible and intangible attributes that satisfies consumers and is received in exchange for money or
some other unit of value (Hitesh Bhasin December 2, 2016). According to Jobber (2004), “A product is
anything that has the ability to satisfy a consumer need.”
In general a product stands for the organization’s offer to the market place. It may be both tangible and
intangible and provides physical comfort and psychological satisfaction to the buyers. Tangible product
is one that can be seen and touched in its physical presence. For instance, garments, shoes, mobiles,
vehicles, soaps, vegetables are examples of tangible aspects of a product. On the other hand, intangible
product is one that cannot be seen and touched, but can be felt. It is in the form of services. The
examples of intangible products are - education, medical care, insurance, banking, travel and transport,
holiday resorts, etc.
Product is the most important element of marketing mix. Hence, the marketing manager has to put all
his efforts in framing marketing strategies of its product offered to the market. In doing so, all the sub-
elements of product are to be considered. The sub-elements (or variables) of product are - product
design, product range, product line, product package, product features, product quality, product
branding, trade mark, labelling, after sale services and guarantees, etc. A proper combination of these
sub-elements gives a product its ability to succeed in market. Product strategy also covers the marketing
decisions about product modification, product simplification, removal of non-profitable products, etc.

Classification of products A product's physical properties are characterized in the same way all over
the world. They can be based on convenience or shopping goods or durables and nondurables; however,
one can also classify products according to their degree of potential for global marketing:
i) Local Products - seen as only suitable in one single market.
ii) International Products - seen as having extension potential into other markets.
iii) Multinational Products - products adapted to the perceived unique characteristics of national
markets.
iv) Global Products - products designed to meet global market segments.

Products and services can also fall into two broad classes base on the types of consumers that use them
(1) Consumer Product, and (2) Industrial Product.
CONSUMER PRODUCT: - It is a “Product bought by final consumer for personal consumption”
(Kotler (pp 226–229)). Consumer products are divided into four classes: a) Convenience product; b)
Shopping Product, c) Specialty Products, and d) Unsought Product.
a) Convenience Product:-Consumer product that the customer usually buys frequently, immediately,
and with a minimum of comparison and buying effort consumer products can be divided further into
staples, Impulse and emergency products. Staples Products are those products that consumers buy on a

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regular basis, such as ketchup, tooth path etc. Impulse products are those products that are purchased
with little planning or search effort, such as Candy bar, and magazine, Emergency product is those
when consumer need is urgent, e.g. umbrellas during a rainstorm etc.
b) Shopping Product:-Consumer good that the consumer, in the process of selection and purchase,
characteristically compares as such bases as suitability, quality, price, and style. Example: Furniture,
clothing, used cars, major appliances and hotel and motel services.
c) Specialty Products:-Consumer product with unique characteristics or brand identification for which
a significant group of buyers is willing to make a special purchase effort. E.g. Specific brands and types
of cars, high-priced photographic equipment, designer clothes etc.
d) Unsought Products:-Unsought products are consumer products that the consumer either does not
Knows about or knows about but does not normally think of buying. Most major new inventions are
Unsought until the consumer become aware of them through advertising. Life Insurance and blood
donations to the Red Cross are few examples of unsought products.

e) Industrial product:-A product bought by individuals and organizations for further processing or for use in
conducting a business.

1.1.3. Product Life Cycle

A product has a life of its own and goes through cycles. Although different products have different types
of life cycles, the traditional product life cycle for most products are:
1. Introduction is the first product life cycle. It involves researching, developing and then
launching the product
2. Growth is the second product life cycles. We call it at growth stage when sales are increasing at
their fastest rate
3. Maturity is the third product life cycle. At this stage sales are near their highest, but the rate of
growth is slowing down, E.g. new competitors in market or saturation
4. Decline is final stage of the life cycle. This is the stage when sales begin to fall
Product life-cycle management this is the stage in which the business is trying to make extending the
product life cycle marketing management strategies.

a) Advertising: Its purpose is to get additional audience and potential customers.

b) Exploring and expanding to new markets: By conducting market research and offering the
product (or some adapted form of it) to new markets, it is possible to get more customers.
c) Price reduction: Many customers are attracted by price cuts and discount tags.

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 d) Adding new features: Adding value to the product catches the attention of many buyers.
e) Packaging: New, attractive, useful or eco-friendly packaging influences the target customers.
f) Changing customer consumption habits: Promoting new trends of consumption can increase the
number of customers.
g) Special promotions: Raising interest by offering Jackpot and other offers.
h) Heightening interest: Many of the following things attract many customers who match certain
profiles: Eco-friendly production processes, good work conditions, funding the efforts of non-
profit organizations (cancer cure, anti-war efforts, refugees, GLTBI, environment and animal
protection, etc.) and the like.

1.1.3.1. Characteristics of PLC stages

The following table Summary of Product Life-Cycle, Characteristics, Objectives, and Strategies
(Philip Kotler and Kevin Lane Keller (2009, p.288).

Introduction Growth Maturity Decline

Characteristics
Sales Low sales Rapidly rising Peak sales Declining sales
sales

Costs High cost per Average cost per Low cost per Low cost per
customer customer customer r customer

Profits Negative Rising profits High profits Declining profits

Customers Innovators Early adopters Middle majority Laggards

Competitors Few Growing number Stable number Declining number

beginning to
decline
Marketing
Objectives
Create product Maximize market Maximize profit Reduce
awareness and trial share while expenditure
defending market and milk the brand
share
Strategies
Product Offer a basic Offer product Diversify brand Phase out weak
product, extensions service, and models items
warranty
Price Use cost-plus Price to penetrate Price to match or Cut price

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 market beat competitors

Distribution Build selective Build intensive Build more Go selective:

distribution distribution intensive phase out
distribution unprofitable
outlets
Advertising Build product Build awareness Stress brand Reduce to level
awareness and interest differences needed
among early in the mass market and benefits to retain hard-core
adopters loyal
and dealers
Sales Promotion Use heavy sales Reduce to take Increase to Reduce to minimal
promotion advantage encourage level
to entice trial of heavy consumer brand switching
demand
Table 1:- Product Life-Cycle, Characteristics, Objectives, and Strategies

The following graph clearly depicts the life cycles of the product in terms of volume of sale in relation
to time.

Figure 1:- cycles of the product in terms of volume of sale in relation to time.

1.1.4. New Product Development Process

New Product development is a journey. It’s the road which leads to the actual product and then the
actual product to the market (Aashish Pahwa / October 17, 2017).

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Every product goes through a number of stages before being introduced in the market. Those stages
are:-

Idea Generation: The first stage of the New Product Development is the idea generation. Ideas come
from everywhere, can be of any form, and can be numerous. This stage involves creating a large pool of
ideas from various sources, which include:

 Internal sources – many companies give incentives to their employees to come up with
workable ideas.
 SWOT analysis –Company may review its strength, weakness, opportunities and threats and
come up with a good feasible idea.
 Market research – Companies constantly reviews the changing needs, wants, and trends in the
market.
 Customers – Sometimes reviews and feedbacks from the customers or even their ideas can help
companies generate new product ideas.
 Competition – Competitors SWOT analysis can help the company generate ideas.
Idea Screening: The second stage is idea screening. Ideas can be many, but good ideas are few. This
second step of new product development involves finding those good and feasible ideas and discarding
those which aren’t. Many factors play a part here, these include Company’s strength, Company’s
weakness, Customer needs, ongoing trends, Expected ROI Affordability, etc.

Concept Development & Testing: The third step of the new product development includes concept
development and testing. A concept is a detailed strategy or blueprint version of the idea. Basically,
when an idea is developed in every aspect so as to make it presentable, it is called a concept all the ideas
that pass the screening stage are turned into concepts for testing purpose. You don’t want to launch a
product without its concept being tested, right? The concept is now brought to the target market. Some
selected customers from the target group are chosen to test the concept. Information is provided to them
to help them visualize the product. It is followed by questions from both sides. Business tries to know
what the customer feels of the concept. Does the product fulfill customer’s need or want? Will they buy
it when it’s actually launched? Their feedback helps the business to develop the concept further.
Business Strategy Analysis & Development: The testing results help the business in coming up with the
final concept to be developed into a product. Now that the business has a finalized concept, it’s time for it to
analyze and decide the marketing and other business strategies that will be used. Product profitability is
estimated, marketing mix, and branding strategies are decided for the product. And other important analytics,

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such as: Competition of the product, Costs involved, Pricing strategies, breakeven point, and etc are
included.
Product Development: Once all the strategies are approved, the product concept is transformed into an actual
tangible product. This development stage of New Product Development results in building up of a prototype or a
limited production model. All the branding and other strategies decided previously are tested and applied in this
stage.

Test Marketing: Unlike concept testing, here the actual prototype is introduced for research and
feedback. Actual customers’ feedbacks are taken and further changes, if required, are made to the
product. This process is of utmost importance as it validates the whole concept and makes the company
ready for the launch.
Commercialization: The product is ready, so should be the marketing strategies. The marketing mix is
now put to use. The final decisions are to be made. Markets are decided for the product to launch in.
This stage involves briefing different departments about the duties and targets. Every minor and major
decision is made before the final introduction stage of the New Product Development.

1.2. The Concept of Product Mix and Product Line Introduction to Branding,
Packaging and Labeling

1.2.1. The Concept of a Product Mix and Product Line

Product mix: A product mix is the composite of products that an organization makes available to
consumers. Product mix is all of the product lines that the company sells, including only those products
that are actually in the marketplace, and not those still in the development or testing stages. “A product
mix is the set of all product lines and items that a particular seller offers for sale to buyers”. For
example, a company's product mix may be constituted of cosmetics, toiletries, and medicine. Again,
each of the line may have sub line, such as cosmetics may be broken down into powder, lipstick, nail
polish, rouge etc. which means that each of the line and sub line may have quite a good number of
individual items.

The number of different product lines sold by a company is referred to as width of product mix. The
total number of products sold in all lines is referred to as length of product mix. The following are some
of the factors influencing product mix: a) Change in demand, b) Marketing influences, c) Production
efficiencies, d) Financial influences, f) Use of waste, g) Competitor’s strategy and Profitability.

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The Concept of a Product Line: Groups of products that are used together, sold to the same customer
group, fall within given price ranges, or marketed through the same channels are known as product
lines. These groupings are typically made on the basis of product use, but can also be made on the basis
of manufacturing method, size, or some other direction. One of the key jobs of the marketing manager is
to select a mix of compatible products for the firms that promote efficiency in selling, production,
pricing, promotion, and distribution.

1.2.2. Branding

1.2.2.1. Definitions
The term brand is a business term. A brand name is the part of the brand which can be vocalized. It
should be remembered, however, that brand refers to anything which serves to distinguish one product
from another. Branding means giving a name to the product by which it could become known and
familiar among the public. When a brand name is registered and legalized, it becomes a Trade mark.

Brand is an integral part of almost every product. Products and services are given names so they can be
easily identified and promoted to buyers. Marketers must make many product decisions associated with
branding, such as brands, brand names, brand marks, trademarks and trade names.
A brand is a name, term, symbol, design, or a combination thereof, that identifies a seller’s products and
differentiates them from competitors’ products. Branding is a centuries-old idea whose time has not yet
passed. As early as the Middle Ages, medieval artisans organized guilds for the distribution of their
products. Each guild required individuals to mark their items with a distinguishing symbol. Selection of
an appropriate product brand, one which produces maximum acceptability of a product, is an important
part of the product development process.

1.2.2.2 Objective of Branding

Market control is the basic objective of branding. A brand is essential to the promotional activities of
the firm. Through promotion, acceptance or preference for a product can be established among
customers. If the product bears a manufacturer’s brand (brands owned by manufacturers regardless of
the scope of area served) and is available through many retail outlets, the goodwill of customers is
directed toward the manufacturer. Retailers will find it difficult to substitute other products for the
branded one that customers prefer. On the other hand, if the wholesaler or retailer places his brand on
a product, the goodwill of customers attaches to the wholesaler or retailer, and the manufacturer loses
much of his control over the market. School of Business Unit - 9 Pages – 294

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 Strategic brand management combines the design and implementation of marketing activities and
programs to build, measure, and manage brands to maximize their value. The strategic brand
management process has four main steps:
• Identifying and establishing brand positioning
• Planning and implementing brand marketing
• Measuring and interpreting brand performance
• Growing and sustaining brand value deals with brand positioning. Kottler pp 264

1.2.2.3. Benefits of Branding

Branding can provide benefits to both buyers and sellers. Brands aid buyers by identifying specific
products that they like and do not like, which in turn facilitates the purchase of items that satisfies
individual needs. Without brands, product selection would be rather random, since buyers could not be
assured that what they purchased was preferred item. A brand also assists buyers in evaluating the
quality of products. A brand symbolizes a certain quality level to a buyer, in the person in turn allows
that perception of quality to represent the quality of the item and brand can provide is the psychological
reward that comes from owning a brand that symbolizes status. Sellers benefit from branding because
each firm’s brands identify its products, which facilitates repeat purchases by buyers. To the extent that
customers become loyal to a specific brand, the firm’s market share for that product achieves a certain
level of stability. A stable market share allows a firm to use its resources more efficiently. When a firm
develops some degree of customer loyalty, it can charge a premium price.
Branding also aids an organization in introducing a new product that carries the name of one or more
of its existing products. Finally, branding facilitates promotional efforts because the promotion of each
branded product indirectly promotes all other products that are branded in the same fashion.

1.2.2.3. Types of Brands

There are four categories of brands: manufacturer brands, private distributor brands, individual brand,
and family brand.
Manufacturer brands are initiated by producers and make it possible for producers to be identified
with their products at the point of purchase. A manufacturer brand usually requires a manufacturer to get
involved with distribution, promotion, and, to some extent, pricing decisions.
Private brands are initiated and owned by resellers. The major characteristic of private brand is that
producers are not identified on the products. Retailers and wholesalers use private distributor brands to
develop more efficient promotion, to generate higher gross margins, and to improve store images.

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An individual brand is one used only for a single product. Individual brands have no obvious
connections with the parent company. It is a policy in which each product is named something different.
Marketers use individual brands when they need to differentiate their own products, when their products
are so diversified that a family name loses meaning, or when they want to protect their family name
should one product fail or get negative publicity.
Family brands is one used for two or more of the company’s products and employ the name of the
parent organization in some way.
Definitions for Different Brand Related Terms of Branding
o  Brand: Brand is a name, term, sign, symbol, or design, or a combination of them, which is
intended to identify the goods or Services of one seller or group of sellers and to differentiate
them from those of competitors.
o Brand Name: That part of a brand which can be vocalized – the utter able. Examples are Tibet,
Aromatic, and Wheel etc.
o Brand Mark: the part of a brand which can be recognized but is not utter able, such as a
symbol, design, or distinctive coloring or lettering. Examples are types of letters used to write
IBM.
o Trademark: A brand or part of a brand that is given legal protection because it is capable of
exclusive appropriation. A trademark protects the seller’s exclusive rights to use the brand name
and/or brand mark.
o Copyright: the exclusive legal rights to reproduce, publishes, and sell the matter and form of a
literary, musical, or artistic work.
Branding is Necessary
i. to facilitates tracking down problems and processing of orders.
ii. To protect by legal rights enjoyed by the seller.
iii. Loyal and profitable set of customers can be attracted more by a branded item than a non branded
one which also protects seller from competition and gives him more control in marketing mix decision.
iv. Segmentation is also facilitated through branding.
v. It helps build company’s image since brands can be advertised easily.
vi. Distributors feel comfortable handling branded merchandise, and, consumers want brand names to
help them identify quality differences and shop more efficiently. School of Business Unit - 9 Pages -
296

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1.2.2.4. Branding Strategies

A company should decide whether its products should have a brand or not. It is very difficult to find a
product these days without having a brand starting from salt to airplane though it involves a cost for
Packaging, labeling, legal protection as well as risk, provided the product is unable to provide desired
level of satisfaction to customers. Marketing Brand strategy is concerned with deciding which products
should be branded and whether they should be sold under your own label or labels controlled by other
firms. Brands include all names, terms, signs, symbols, or designs that are used to identify and
differentiate the goods of one seller from those of the competitors. Brands allow the consumer to
recognize the product and increase the chances for repeat sales; facilitate the development of permanent
price-quality images for products, simplify the introduction of new products and allow the manufacturer
some control over the channel of distribution. Not all products can be branded, and many raw materials
are bought according to specifications and individual brands are meaningless. Branding is easiest where
identifying tags or symbols can be attached directly to the product and where the consumer is willing to
Use brand designations to differentiate among products. Deciding whether to brand products and what
type of name to use is a very complex process.

1.2.3. Packaging and Package Defined

Packaging ‘‘consists of all the activities of designing and producing the container or wrapper for a
product. A package is the actual container. Thus packaging is a business function and a package is an
item’’4. Packaging can also be defined as the activities related to designing and producing a container
that both protects the product and enhances its marketability. The package is a means by which the core
product is enhanced to become an augmented product (Walker and Etzel, 19994: 273). Present day
marketers use packaging as a competitive weapon. A package holds, protects, transports, and stores the
physical product. Package can be used to attract customers’ attention and convince them to try the item.
The package has a promotional value.
Different Levels of Package
A package can include three levels: the primary package, the secondary package, and the shipping
package.
The primary package is the product’s immediate container. Thus the bottle holding paracetamol syrup
is the primary package.
The secondary package refers to materials that protects the primary package and is discarded when the
product is about to be used. For example, the cardboard box containing the bottle of paracetamol syrup
is a secondary package and provides additional protection and promotion opportunity.

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The shipping package refers to packaging necessary for storage, identification, or transportation.

1.2.4. Labeling Defined and Types of Labels

Labeling is closely related to packaging. A label is that part of the product or the package conveying
information about the product to the purchaser. It is an integral part of the product’s packaging. It
encompasses any printed information on the packaging that describes the product. Labeling can also
convey meaning through its size, shape, color, and texture. It should promote the product and help
customers make decisions.
Labeling is part of packaging and consists of printed information that describes the product, its usage
and, other information, appearing on or with the package. School of Business Unit - 9 Page - 306
Irrespective of the location on the product, and basically three types of labels available to marketing
executive: brand label, grade label, and descriptive label.
A brand label contains only the brand name of the product. It is normally used for agricultural products
for which no information needs to be conveyed.
A grade label on the other hand, denotes the quality of a product based on standards established by the
concerned authority. Another type of label, the descriptive label is the most common type of label used
to describe what the product contains and to convey information about its benefits and use. Such a label
is needed for buyers who would not be expected to have complete information about the product or its
use.
Labels may also be classified as persuasive and informational labels. Persuasive labels are
promotional in nature and can influence buyers positively, however, Informative label tells the buyer
about the product’s ingredients, use, dating, and so on.
Importance of Labeling
Since so many similar products are available, an attention getting device or silent salesperson is needed
to attract interest of the buyers. It is one of the visible parts of a product, and hence, important elements
in the marketing mix. Labeling is an important dimension related to packaging, not only for promotional
and informational reasons, but also from a legal perspective. Labels can be used to promote other
products of the manufacturer or to encourage proper use of products and therefore greater satisfaction
with them. From customers’ point of view, labeling is very important. Ultimate consumers purchase
goods and services for personal use. At one time, most were unskilled buyers. However, as a result of
better education and communication, and with rising standards of living, some consumers have become
highly informed and discipline purchasers. As a result of increased consumer affluence, explicit labeling
is now required on many products as demanded by them.

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1.2.5. PRODUCT LINE

Product lining is the marketing strategy of offering for sale several related products. Unlike Product
bundling, where several products are combined into one, lining involves offering several related Product
individually. A line can comprise related products of various sizes, types, colors, qualities, or Prices.
Line depth refers to the number of product variants in a line. Line consistency refers to how closely
relate the products that make up the line are. Line vulnerability refers to the percentage of sales or
profits that are derived from only a few products in the line. If a line of products is sold with the same
brand name, this is referred to as family branding.
PRODUCT LINE MODIFICATION
When you add a new product to a line, it is referred to as a line extension. When you add a line
extension that is of better quality than the other products in the line, this is referred to as trading up or
Brand leveraging. When you add a line extension that is of lower quality than the other products of the
Line, this is referred to as trading down. When you trade down, you will likely reduce your brand
equity. You are gaining short-term sales at the expense of long term sales.
These may results in: Product Line Contraction, Product Line Expansion, Changing Models or Styles of
the Existing Products
PRODUCT SIMPLIFCATION
Product Simplification means limiting the number of products a dealer deals. Sometimes it becomes
necessary for a company to stop the production of unprofitable products
PRODUCT DIVERSIFICATION
Product diversification means adding a new product or products to the existing product. It is a strategy
for growth and survival in the highly complex marketing environment.
PRODUCT DIFFERENTIATION
Product differentiation involves developing and promoting awareness in the minds of customers that the
company’s products differ from the products of competitors. This is made by using trade mark, brand
name, packaging, labeling etc.

1.3. Designing and Managing Services

The art of brand building is through creating strong brand image and brand awareness with customer.
However, the brand building process continues even after the product is sold to the customer. Company
can come out to be a winner by showcasing differentiation in services at the point of sell and after sell
customer service. Furthermore, research has shown that average customers are not happy with after sell
services in airlines, bank and hotel industry. It has been observed that companies with help of modern

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technology are maintaining a database of customer profile. Companies perform analysis on database and
choose offer discounts, coupons and charge low services who give maximum business. Companies are
not welcoming casual users. This sort of differential service creates a bad impression in mind of
customer, resulting in abandoning and bad mouthing of the company. There are various ways to deliver
superior quality to all customers, but is up-to the company, whether to service just profitable customer.

It is general trend in developed economies like USA that services sector is showing highest growth in
job creation. Here services include any intangible act from one party to another without any underlying
ownership transfer. Services are offered by the airlines, banks, technology firms, armed service,
hospital, etc. Basically services can be divided into government backed services, business services, not
for profit services and manufacturing services.

To design marketing strategies around services, it is essential to understand characteristics of

services. Services are intangible, thereby creating uncertainty in consumer about the end product. For
example, if the customer is looking for a hair-cut and visits a salon, there is going to be a considerable
amount of doubt about her final look. Challenge is building confidence in customer through people,
price, environment and right equipment. Unlike physical goods which are manufactured and supplied to
customer through the distribution channel, services are consumed at same time it is produced. Services
have element of inseparability and therefore, time allocated to customer is important. So if the customer
has the service giver penchant than price could be increased or time allocated is reduced to take
customers. As the services have the human element involved, there is variability, not all hair cut
specialists are patient in listening to what customer has to say. To overcome companies can implement
stringent norms during hiring, push for standardization and constantly record customer satisfaction.

Traditional marketing was developed looking at physical goods, for service marketing focus is people,
process and physical evidence. Customers generally tend to give preference price rather than quality of
service. In that circumstance companies can create differentiation not through price war but focusing on
providing a wider range of services. Companies are looking at internet to accomplish this task, but as
with products, competition can easily copy and remove differentiation. However, the temporary
differentiation will serve the company well.

Customer satisfaction is tested every time service is delivered, making it essential to manage service
quality. Quality service management requires a strategic concept to the start with wherein companies
need to make customer satisfaction their motto. Top management should show commitment towards this
strategic concept and create an atmosphere to facilitate customer satisfaction. Companies need to

14
implement best practices associated customer satisfaction. Companies can introduce technology where
ever relevant to reduce human element, for example, kiosks and ATM. Companies need to develop a
system where they can monitor as well as audit customer satisfaction system for its robustness and
performance. Companies need to develop a habit in looking into customer grievance and resolve them at
the earliest. Employees serve as internal customers, and it is very essential they are satisfied with the
company. A satisfied and motivated employee is going to carry that attitude in dealing with customer
and h in increasing productivity.

Customer is the king and service is the name of the game. It is essential for companies to incorporate
services purchase or post purchase as an element of the marketing strategy. Today’s customer has more
options available and will move on to another company for the sake of better service.

1.3.1. The nature of services marketing

At one level, the theory of marketing has universal application – the same underlying concerns and
principles apply whatever the nature of the business. However, the nature of a particular service
business may dictate a need to place much greater emphasis on certain marketing elements, which in
turn could lead to different marketing approaches. It is frequently argued that services have unique
characteristics that differentiate them from goods or manufactured products. The four most commonly
ascribed to services are:
o Intangibility – services are to a large extent abstract and intangible.
o Heterogeneity – services are non-standard and highly variable.
o Inseparability – services are typically produced and consumed at the same time, with customer
participation in the process.
o Perish ability – it is not possible to store services in inventory.
From the 1980s these characteristics, known as ‘IHIP’ (intangibility, heterogeneity, inseparability and
perish ability) were widely discussed in the academic literature and textbooks in services marketing.
However, the huge diversity of types of service businesses suggests that it is difficult to fit services into
a neat definition. The universality of these characteristics has been increasingly challenged over recent
years.

1.3.2. Marketing strategy for service firms

The main aim of marketing is to create a customer and to convince him to make use of your product /
service. Marketing plays a significant role in service sector. There is an internal marketing and
interactive marketing strategies.

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Internal Marketing: This means the service firm must effectively train and motivate its employees to
improve customer contacts and to provide the satisfaction to the customer by rendering a consistent and
high quality service to improve the customer relations.
Interactive Marketing: It means that perceived service quality depends heavily on the quality of buyer-
seller interaction. The quality of the service depends upon both the service, the service deliverer and on
the quality of delivery. The customer judges service quality not on the basis of technical aspect but
mostly on functional aspect.

1.3.2.1. Marketing of Services and strategies

The term service includes a wide range of services. These are the business and professional services
such as marketing research, advertising, insurance, and banking, Computer Applications, legal and
medical, entertainment, recreational, shoe repair shops and hair salons services. The services like
0education, fine arts etc., are meant for fulfilling psychological and emotional needs. During the last
decade services marketing has increased its importance with the advent of competition. In this
competitive market, marketing has become a key differentiator between corporate success and failure.
There are different marketing strategies for service companies.

The classic four Ps marketing approach that works well for physical goods can serve for services , but
service companies need to pay attention to additional elements. Boon and Bitner ( insert date) identify 3
additional Ps for service marketing:

1. People: If the service you offer is provided by people, then the selection, training, and
motivation of your employees has a huge effect on customer satisfaction. Employees should be
competent, caring, and responsive and have problem solving abilities.
2. Physical Evidence: As a service company, you need to demonstrate your service quality
through physical evidence and presentation. For example, hotels develop a look a visible style of
dealing with customers that projects the desired image and value, such as cleanliness or speed.
3. Process: You can choose among different ways, or processes, for your service company to
deliver your service. For example, restaurants have developed different formats such as cafeteria-
style, fast-food, buffet, and candlelight service.

Differentiating Services
Service marketers sometimes complain about the difficulty in differentiating their services. For example,
a dentist office might wonder how it can differentiate itself from other dentists. It might be tempting to

16
compete on price, but this often ends up hurting business more than helping because competitors will
cut prices to match. An alternative to competing on price is to develop a differentiated offer, delivery,
image and/or quality.

 Offer: The offer can include innovative features. What customers expect is called the primary
service package, and to this, you can add a secondary service feature. A coffee shop might offer free
internet access and comfortable couches as secondary services.
 Delivery: A service company can hire and train better people to deliver its service, a more
attractive physical environment or design a quicker delivery process.
 Image: Service companies can also differentiate their image through symbols and branding. If
your company is reputable and provides a valued service, use a good logo and symbols to help
customers’ associate high quality to your services.
 Service Quality: You can win over the competition by delivering consistently higher-quality
services and exceeding customer expectations. These expectations are formed by their past
experiences, word of mouth, and the messages you deliver through advertising. If you don't meet or
exceed customer expectations, your customers will lose interest in your services.

1.3.3 Managing product support service

Customer service is another element of product strategy. A company's offer to the marketplace usually
includes some services, which can be a minor or a major part of the total offer and designing its product
and support services to profitably meet the needs of target customers. The first step is to survey
customers periodically to assess the value of current services and to obtain ideas for new ones.
Once the company has assessed the value of various support services to customers, it must next assess
the costs of providing these services. It can then develop a package of services that will both delight
customers and yield profits to the company.

1.4. Pricing Decision

1.4.1. Meaning of Price and Pricing in Marketing

Definition: Pricing is the method of determining the value a producer will get in the exchange of goods
and services. Simply, pricing method is used to set the price of producer’s offerings relevant to both the
producer and the customer. Every business operates with the primary objective of earning profits, and
the same can be realized through the Pricing methods adopted by the firms. While setting the price of a
product or service the following points have to be kept in mind:

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  Nature of the product/service.
 The price of similar product/service in the market.
 Target audience i.e. for whom the product is manufactured (high, medium or lower class)
 The cost of production viz. Labour cost, raw material cost, machinery cost, inventory cost, transit
cost, etc.
 External factors such as Economy, Government policies, Legal issues, etc.

Pricing Objectives
The firm has to consider many factors in setting its pricing policy.

Step1: Setting objectives Nonprofit and public organizations may have other pricing
objectives. A university aims for partial cost recovery; hospital may aim for full cost recovery in its
pricing. A nonprofit theater company may price its productions to fill the maximum number of theater
seats. A social service agency may set a service price geared to client income.
Whatever the specific objective, businesses that use price as a strategic tool will profit more than
those who simply let costs or the market determine their pricing.

1. Survival: The foremost Pricing Objective of any firm is to set the price that is optimum and help the
product or service to survive in the market. Each firm faces the danger of getting ruled out from the
market because of the intense competition, a mature market or change in customer’s tastes and
preferences, etc. Thus, a firm must set the price covering the fixed and variable cost incurred without
adding any profit margin to it. The survival should be the short term objective once the firm gets a hold
in the market it must strive for the additional profits. The New Firms entering into the market adopts
this type of pricing objective.
2. Maximizing the current profits: Many firms try to maximize their current profits by
estimating the Demand and Supply of goods and services in the market. Pricing is done in line with the
product’s demand in the customers and the substitutes available to fulfil that demand. Higher the
demand higher will be the price charged. Seasonal supply and demand of goods and services are the
best examples that can be quoted here.
3. Capturing huge market share: Many firms charge low prices for their offerings to capture greater
market share. The reason for keeping the price low is to have an increased sales resulting from
the Economies of Scale. Higher sales volumes lead to lower production cost and increased profits in the
long run. This strategy of keeping the price low is also known as Market Penetration Pricing. This
pricing method is generally used when competition is intense and customers are price sensitive. FMCG
industry is the best example to supplement this.

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 4. Market Skimming: Market skimming means charging a high price for the product and services
offered by the firms which are innovative, and uses modern technology. The prices are comparatively
kept high due to the high cost of production incurred because of modern technology. Mobile phones,
Electronic Gadgets are the best examples of skimming pricing that are launched at a very high cost and
gets cheaper with the span of time.
5. Product –Quality Leadership: Many firms keep the price of their goods and services in accordance
with the Quality Perceived by the customers. Generally, the luxury goods create their high quality,
taste, and status image in the minds of customers for which they are willing to pay high prices. Luxury
cars such as BMW, Mercedes, Jaguar, etc. create the high quality with high-status image among the
customers. Thus, every firm operates with the ultimate objective of earning profits and, therefore, the
price of a product must be set keeping in mind the cost incurred in its production along with the
benefits it offers for which people are ready to pay extra.

Step 2: Determining Demand

Each price will lead to a different level of demand and different impact on a company's marketing
objectives. The relation between alternative prices and the resulting current demand, in the normal
case, demand and price are inversely related: The higher the price, the lower the demand
The first step in estimating demand is to understand what affects price sensitivity and individuals have
different price sensitivities.
Statistical analysis of past prices, quantities sold, and other factors can reveal their relationships.
Price experiments can be conducted.
PRICE ELASTICITY OF DEMAND Marketers need to know how responsive, or elastic,
demand would be to a change in price. If demand hardly changes with a small change in price,
we say the demand is inelastic. If demand changes considerably, demand is elastic. The higher
the elasticity, the greater the volume growth resulting from a 1 percent price reduction. Demand
is likely to be less elastic under the following conditions: (1) There are few or no substitutes or
competitors; (2) buyers do not readily notice the higher price; (3) buyers are slow to change their
buying habits; (4) buyers think the higher prices are justified. If demand is elastic, sellers will
consider lowering the price. A lower price will produce more total revenue
Step 3: Estimating Costs
Demand sets a ceiling on the price the company can charge for its product. Costs set the floor and
charging a price that covers its cost of producing, distributing, and selling the product, including a fair
return for its effort and risk. A company's costs take two forms, fixed and variable. Fixed costs (also
known as overhead) are costs that do not vary with production or sales revenue, bills like rent, heat,

19
interest, salaries, and so on, regardless of output. Variable costs vary directly with the level of
production.
Step 4: Analyzing Competitors' Costs, Prices, and Offers

Within the range of possible prices determined by market demand and company costs, the firm must
take competitors' costs, prices, and possible price reactions into account. The firm should first consider
the nearest competitor's price. If the firm's offer contains features not offered by the nearest competitor,
their worth to the customer should be evaluated and added to the worth to the customer should be
evaluated and subtracted from the firm's price. Now the firm can decide whether it can charge more, the
same, or less than the competitor. But competitors can change their prices in reaction to the price set by
the firm
Step 5: Selecting a Pricing Method
Given the three Cs—the customers' demand schedule, the cost function, and competitors' prices—the
company is now ready to select a price. Companies select a pricing method that includes one or more of
these three considerations and examine six price-setting methods: mark-up pricing, target-return pricing,
perceived-value pricing, value pricing, going-rate pricing, and auction-type pricing.
Step 6: Selecting the Final Price
Pricing methods narrow the range from which the company must select its final price. In selecting that
price, the company must consider additional factors, including the impact of other marketing activities,
company pricing policies, gain-and-risk-sharing pricing, and the impact of price on other parties

1.4.2. Factors affecting pricing decisions

There are different factors affecting pricing decisions. Those factors that businesses must consider in
determining pricing policy can be summarized in four categories:
(1) Costs In order to make a profit, a business should ensure that its products are priced above their total
average cost. In the short-term, it may be acceptable to price below total cost if this price exceeds the
marginal cost of production – so that the sale still produces a positive contribution to fixed costs.
(2) Competitors If the business is a monopolist, then it can set any price. At the other extreme, if a firm
operates under conditions of perfect competition, it has no choice and must accept the market price. The
reality is usually somewhere in between. In such cases the chosen price needs to be very carefully
considered relative to those of close competitors.
(3) Customers Consideration of customer expectations about price must be addressed. Ideally, a
business should attempt to quantify its demand curve to estimate what volume of sales will be achieved
at given prices

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(4) Business Objectives- Possible pricing objectives include:
• To maximize profits
• To achieve a target return on investment
• To achieve a target sales figure
• To achieve a target market share
• To match the competition, rather than lead the market

General Approach to Pricing Decisions

Setting the right price is one of the marketer’s most difficult tasks. A host of factors come into play. But
finding and implementing the right price strategy is critical to success. Philip kotler (pp 291–300)

There are many ways to price a product.

Cost Based Pricing Policies: It means setting price on the basis of the total cost per unit. These
methods are
1. Cost plus Pricing- cost plus a percentage of profit.
2. Target Pricing- cost plus a pre determined target rate of return
3. Marginal Cost Pricing- fixed plus variable costs
4. Break-Even Pricing- at break-even point i.e., where total sales=total cost {no profit, no loss
point}
 Demand Based Pricing Policies: It refers to setting price on the basis of the demand for the
product. There are two methods as follows:
1. Premium Pricing-Use a high price where there is a unique about the product or service. This
approach is used where a substantial competitive advantage exists. Such high prices are charged
for
2. Differential Pricing-Same product is sold at different prices to different consumers.
Competition Based Pricing Policies: It refers to setting price on the basis of the competition for
the product. There are three methods as follows:
1. Going Rate Pricing-Many businesses feel that lowering prices to be more competitive can be
disastrous for them (and often very true!) and so instead, they settle for a price that is close to
their competitors.
2. Customary Pricing- Prices for certain commodities get fixed because they have prevailed over
a long period of time.
3. Sealed Bid Pricing- Firms have to quote less price than that of competitors’ e.g. Tenders,
winning contracts and etc.

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Value Based Pricing Policies: It refers to setting price based on value to the customer. The
following are the pricing method based on customer value.
1. Perceived- value pricing: This is the method of judging demand on the basis of value perceived
by the consumer in the product. This method is concerned with setting the price on the basis of
value perceived by the buyer of the product rather than the seller’s cost.
2. Value of money pricing: Price is based on the value which the consumers get from the product
they buy. It is used as a competitive marketing strategy.
 Skimming pricing: This is done with the basic idea of gaining a premium from those buyers who
always ready to pay a much higher price than others. It refers to the high initial price charged when
a new product is introduced in the market. For example, mobile phones which when introduced
were highly priced.
 Penetration pricing: The price charged for products and services is set artificially low in order to
gain market share. Once this is achieved, the price is increased. This approach was used by France
Telecom and Sky TV.

 Competitive pricing : The producer of a new product may decide to fix the price at competitive
level. This is used when market is highly competitive and the product is not differentiated
significantly from the competitive products.
 Predatory pricing: When a firm sets a very low price for one or more of its products with the
intention of driving its competitors out of business.

 :
Economy pricing This is a no frills low price. The cost of marketing and manufacture are kept
at a minimum. Supermarkets often have economy brands for soups, spaghetti, etc.

 Price Skimming . Charge a high price because you have a substantial competitive advantage.
However, the advantage is not sustainable. The high price tends to attract new competitors into
the market, and the price inevitably falls due to increased supply. Manufacturers of digital
watches used a skimming approach in the 1970s. Once other manufacturers were tempted into
the market and the watches were produced at a lower unit cost, other marketing strategies and
pricing approaches are implemented.

 Psychological Pricing . This approach is used when the marketer wants the consumer to
respond on an emotional, rather than rational basis. For example 'price point perspective' 99
cents not one dollar.

22
 Product line pricing. Where there is a range of product or services the pricing reflect the
benefits of parts of the range. For example car washes. Basic wash could be $2, wash and wax
$4, and the whole package $6.
 Optional Product Pricing. Companies will attempt to increase the amount customer spend once
they start to buy. Optional 'extras' increase the overall price of the product or service. For
example airlines will charge for optional extras such as guaranteeing a window seat or reserving
a row of seats next to each other.
 Captive Product Pricing Where products have complements, companies will charge a
premium price where the consumer is captured. For example a razor manufacturer will charge a
low price and recoup its margin (and more) from the sale of the only design of blades which fit
the razor.
 Product Bundle Pricing. Sellers combine several products in the same package. This is
serves to move old stock. Videos and CDs are often sold using the bundle approach.
 Promotional Pricing - to promote a product is a very common application. There are many
examples of promotional pricing including approaches such as BOGOF (Buy One Get One
Free).
 Geographical Pricing. Is evident where there are variations in price in different parts of the
world. For example rarity value, or where shipping costs increase price.
 Value Pricing. This approach is used where external factors such as recession or increased
competition force companies to provide 'value' products and services to retain sales e.g. value
meals at McDonalds
 Cash Discounts Allowances
1. Cash Discounts: A cash discount is a price reduction to buyers who pay their bills
promptly.
2. Quantity Discounts: A quantity discount is a price reduction to those buyers who buy large
volumes.
3. Functional Discounts: Functional discounts (also called trade discounts) are offered by a
manufacturer to trade-channel members if they will perform certain functions, such as
selling, storing, and record keeping.
4. Seasonal Discounts: A seasonal discount is a price reduction to buyers who buy
merchandise or services out of season.
5. Allowances: Allowances are extra payments designed to gain reseller participation in
special programs.

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 a) Trade-in allowances are price reductions granted for turning in an old item when buying
a new one. Trade-in allowances are most common in durable goods categories.
b) Promotional allowances are payments or price reductions to reward dealers for
participating in advertising and sales support programs. Etc

CHAPTER TWO
2. PRACTICAL APPLICATION AT DEBRE BERHAN DASHEN BREWERY

2.1. Organization back ground of Debre Berhan Dachen Brewery factory

2.1.1. Historical background

Dashen beer is one of the largest brewing factories in Ethiopia. It has two branched one located in Debre
Berhan and the other in Gondar. It's named after Mount Dashen ,Ethiopia's highest mountain elevation
4523 meters),and a home to rare endemic fauna and flora and renewed for its breath taking scenery.
The principal aim  is meeting the customer requirements for quality beer and to offer customers more
choice in the market worth out affecting the environment. Debre Berhan Dashen Beer brewery is an
expansion of Dashen. It is located in Debre Berhan (126 km North East of Addis Ababa).
The‘Greenfield’ brewery comprises a 30,000 m2 grass floor area facility located on a 12 Ha site. Thus,
the brewery is highly committed waste management and satisfying customer need and expectations.

Debre Birhan Dashen brewery utilizes state of the arts technology and has a highly qualified
professional work force that will enable it compete on the export market with the leading international
beer producing and marketing companies. Despite its young age, the brewery has awarded two
internationally, recognized certifications, ISO 9001 and ISO 14001.

Debre Birhan Dashen brewery is a Share Company owned by two share holder Tiret Corporate and
England share. The share of the factory is 51% by Tiret corporate and 49% by England share holders.
This factory creates good employment opportunity by hiring 267 Ethiopian permanent employees, 320
Ethiopian contractual employees and 9 permanent foreigners’ employees.

The plant has planned to increase volume of its production in phases, initially produce 2,000,000 hl/
annum (capable of ramping up to 3,000,000 hl/ annum) of lager beer utilizing state of the art modern
development including continuous brewing, membrane filtration and sterile filling techniques and a

24
high level of process automation. The brewery steam is generated using fast, efficient and economical
package electric boilers having a total demand 12 TPH c/w standby fuel oil boilers.

In terms of sustainability, continuous controlling, efficiency and quality improvement processes and
measure are taken more energetically efficient, easier to control and consequently lead to a lower
production cost and stay in the market competitive For instance, the brewery houses are constructed
with low construction cost. In an interview the marketing manager of the company pointed out that these
low cost continuous brew house ware chosen by the company for the following list of main reasons:

 Reduced peak consumption of utilities - steam and cooling liquid. The worth cooling takes
place normally within 50-60 minutes
 Reduced energy and extract losses decrease the heat losses.
 Reduced waste disposal - Rinsing water between batches is drained, leading to increase water
consumption, extract losses and charging the waste water plant.
 Limited space requirements about 14 batches a day.
 Easy process control - In practice, it is difficult to have the same process conditions between
similar batches. These fluctuations could be limited with a continuous process. And Faster and
more consistent fermentation have been achieved in the new plant without negatively affecting
beer quality. Through the use of Jet Mixing Technology implementation within the 4,800 hl
fermentation tanks. Introducing mixing in the fermentation tanks has positively influenced three
separate process phases namely: primary fermentation, dactyl conversion and crash cooling.

2.1.2. The company Mission, vision, and objectives

The company business plan shows that it has its own mission, vision and objectives. The branch
manager and marketing also explained them well. The vision, mission and objectives of the Dashen
brewery share company are

Vision of the company:

To Be Ethiopia’s Best Brewing Company in Ethiopian

Mission of the company:

 To be the best Ethiopian beer lead drinks company with sustained revenue growth and
constantly to improving returns on invested capital.
 To make Dashen the central site for quality beer.

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  To support the social economic development of the country.
Objectives of the company:
 Delighting Consumers,
 Enriching Communities,
 Enhancing Ethiopian Progress

2.2. Major activities areas of the company.

In interview with the head of branch manager and its strategic plan document study, we have learnt that
Debre Berhan Dashen brewery has many fields of activities/functions that help the company to perform
in the production/ operation management. These fields of activities are:-
 Finance and accounting activity/department.
 Inventory system/department.
 Sales & marketing activity/ department.
 Purchase & procurement activity/department.
 Human resource department activity.
 Production and Operations department activity.
These activities at each department are performed in and managed by the organization by management
information system.

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 Chapter Three

3. PRATICAL CASE ANALYSIS IN CASE OF DASHIN BEER S.C

3.1. Methodology

Rationale of case selection- There were two major reasons for selecting Dashen beer factory as
case for analysis. These are:

1. Dashen beer factory is one of the largest business firm found in Debre brehan town.

2. The company uses the marketing strategy like branding labelling pricing etc which are related to
our topic

Method of data collection and analysis

Qualitative data were collected from branch manager, quality control department, marketing manager
using questionnaire and interview. The data were analysed thematically as presented in the following
sections.

Product Planning of the company

Dashen breweries currently have three beer products, from these two of them i.e Balageru and Jano beer
are released this 2016/2017 year to fill demand gap regarding test preference. The companies known
product is Dashen beer, which have much strong test and Balageru is medium level of alcohol test and
the last one which light beer is Jano. The introduction new modified products in 2016/2017 were direct
consequence of marketing study (in which the decline for volume of sale for Dashen were reported) and
project plan so as to stay competitive in the brewery market...

A “Dashen Beer”

The principal aim of Dashen Beer is meeting the customer requirements for quality beer. The company
utilizes state of the arts technology and has a highly qualified profession work force that will enable it to
compete on the export market. Currently Dashen beer is exported to three different foreign countries like
those of South Sudan, Israel and Australia.

27
Its production is fully from malt and it is sugar free and Alcohol content of 4.8 %. It is more quality beer
and since it is sugar free it is time effective as well as cost effective beer. The Brewery’s ISO 9001
Quality management system award has shown how the beer is customer centred and a quality product
and it gives the company confidence for producing other desired quality and internationally recognized
beer products. The company has marketing research department who study the company overall
performance. And established and maintain quality control manual when made new product
development

Figure 3:- picture of dashen beer

b. Balageru Beer

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It is the first new product palaning result and With little fanfare and just in time for holiday season,
Dashen Brewery has launched a new brand, Balageru, Its alcohol content is 5.2 % .This product is
introduced in all part of the country; the company called it “one of a handful of its kind in the world”. It
is produced by competitive advantage in terms of maintaining quality and efficiency, while lowering
operating costs by ignoring malt in beer processing stage and using 100% of barley product. It
minimizes cost as well as time and uses the last technology in brewery industry. It is done based on
marketing research to satisfy the customer wants.

By using barley only it will create a huge opportunity for the Ethiopian farmers to supply their barley
farm product directly for Dashen brewery and for this purpose the company had given the barely seed
for some selected farmer at different farm area.

Figure 4:- picture of Balageru beer

C. Jano Beer

Dashen Brewery one of the seven breweries in Ethiopia has introduced the second a new product
dubbed jano beer. It comes five months after the company launched another beer brand, Balageru, in
May 2017. It is done based on marketing research.

Jano beer is triple- filtered, which is unique in the country brewery industry, the product nature is quite
different, its least cost of production and it is easy to drink and it’s mainly for those customers who
didn’t test beer at all and to test beer for the first time. Its “Easy Drink” and light beer test character. Its
alcohol content is 4.8 %.

29
Figure 5:- picture of Jano beer

3.2. Product Life Cycle of the company

Dashen breweries is developing and expanding for new product. Its volume of sale is increasing with
time. Therefore, we can conclude that it is on growth stage of the product life cycle.

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Dashen Breweries New Product strategy

In Addition to Dashen Beer Brand Dashen Brewery has released two new brand beer products to the
market, “Balageru Beer” and “Jano Beer”. Each brand beer products has their own characteristics.
While launching new brand product Dashen Brewery always tries to find where the market gap is, and
the company always tries to test where the market demand lies, as a result it always works testing other
industry beer products and which beer factory has large sales volume and then the company tries to
bring those beer test to be produced in their company. Sometimes they try to collect consumer feedbacks
and some researches regarding test and preference.

Currently Dashen beer has new product strategy to introduce a minimum of two new products within
each two years’ time schedule. The company is also working to bring two new products in the coming
2018 FY which includes non-alcoholic product.

Dashen breweries Branding, labelling and Packaging strategy

In Ethiopia It was Dashen Beer S.C who first introduce long bottle for beer packaging, all other
competitive beer factory were using short bottle for beer packaging and it is not comfortable for
consumers use.

Also for labelling strategy this company always strive for change, that change will be customer focused
as well as new technological implementation. Previously company’s products labelling was paper, but
now it’s changed to using metallic material.

According to the company Dashin Beer motto is “Yegna bira”… this to express the customers to feel
they are part of the company and to create awareness for which Dashen beer is not solely selling beer
and making business, rather it stands on supporting society with so many social targeted activities like
those of; supporting construction of Bahrdar and Mekele stadium, construction of Gondar town Library,
Gondar Health centre, and social benefit activities. And also the products brand name, it related to
Ethiopian culture.

Dashen beer have different types of branded beer like, Dashin, Balageru and Jano, but the company’s
known brand name is” Dashen”. All the company’s product brand name is all Ethiopian cultural and
historical name base.

3.3. Branding

As it is mentioned above Dashen Brewery S.C has three branded beer,

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 - Dashen Beer Brand
- Balageru Beer Brand and
- Jano Beer Brand

The name of each Beer Brand stands Ethiopian cultural and historical name based. This is to create
some belongingness in mind of customers, that’s why the company Motto says” Yegna Bira” (የኛ ቢራ).

Dashin Beer is not solely selling beer and making business, rather it stands on supporting society (Social
responsibility) with so many social targeted activities like those of; construction of Gondar town Library
Gondar Health centre, supporting Bahrdar and Mekele stadium construction and so many social benefit
activities.

That’s why the company needs the customer as well as the society to feel they are as part of the
company, and thinks creating this attitude will benefit their overall company strategies.

. Packaging and Labelling Strategy

In Ethiopia It was Dashen Beer S.C who first introduce long bottle for beer packaging, all other
competitive beer factory were using short bottle for beer packaging and which is not comfortable for
consumers use.

Also for labelling strategy this company always strive for change, that change will be customer focused
as well as new technological implementation. Previously company’s products labelling was paper, but
now it’s changed to using metallic material.

This metallic sheet of labelling is much costlier but the company stands first quality as well as attractive
packaging design. Regarding the stopper and the bottle the company is using both from internal and
external suppliers

3.4. Marketing Strategy regarding managing service

Dashen Beer marketing strategy is based on consumers demand and hence it focuses on consumers
demand assessment research. This assessment is done by other professional company who have legal
license in the country. This company simply gathers feedbacks and customers preference regarding our
products and based on that assessment or feedbacks we are going to give some decisions to fill the
demand gap.

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On product management, currently provide three different beer products, Dashen which is much strong
beer, Balageru medium and Jano which is light beer. In the coming months the company is preparing to
release alcohol free beers to the market.

On delivering the product, the company have 109 distributors all over the country, the product reach
every corner of the country as well as outside the country like in South Sudan, Israeli and Australia.

3.5. Dashen breweries Pricing strategy and objectives

The company’s selling price depend on cost of production as well as the consensus with other similar
beer factories, there is an association regarding beverage factories and this association will reach an
agreement on what price should each company have to sell their product. So, the company set price
based on costs, competitors, customers, business objectives like a target market share and return on
investment.
Factors Affecting Pricing Decision

The government also set maximum profit after production per a single bottle of beer, but mostly every
brewery industry in the country sets price based on the consensus of the beverage association.

As previously discussed one of the biggest advantage of Dashen brewery plc are, the product are
produced by least cost of input as well as use of modern technology that will make the selling price to be
reduced compare to others.

Since the firm is mainly aiming profit maximization, there exist very small price gap on the industry.
Sometimes due to lack of foreign currency as well as the country’s economic policy change, other
factories may increase their selling price but Dashen brewery is not rising selling price because the
company need to increase its market share and also some inputs are purchased before the EPDRE
impose some increment (15%) in the US dollar, so the company is still selling in cheaper price than
other brewery company in Ethiopia.

As a promotion strategy Dashen Beer s.c uses price discount for short period of which is similar to
others. Similar to other brewery industry Pricing may differ from place to place, that’s depend on,
transportation, type of beer product, consumers behaviour like for the export beer the price is different to
local beer price, government policies, cost of production and the economy by itself will be the key
factors for the company’s beer price. Selling price for Debre berhan area is much cheaper than other
area.

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Dashen brewery plc have 109 distributors and those distributors profit is set or given by the factory, they
can’t sell the product simply setting their own selling price rather the company will give them the exact
selling price, but other retailers can sell at any price bearing in mind the governments’ control.

3.6. Gaps (limitation) Identified from and conclusions for Debre Berhan dashen
brewery in product planning and pricing decision function

Gaps

 Sales volume is not increasing as per the company plan.

 The company is not fully implementing social responsibility which related to waste water
treatment which affect the marketing strategy of the company.
 The company is not free from the political intervention which affect the marketing plan
 Marketing department of the company is not offering fully its function because there is
decrease in sale volume.
 The Marketing research is not effective because company new product development doesn’t
increase as planned sale volume.
 Conclusion
 Dashen beer factory worked in branding and labelling packing and product planning in
accordance the theories these helps to differentiate the company product.
 The company use pricing decision based on the beer association and its cost and revenue.
 Pricing is significant role in order to get enough return for in business organization.
 The company Use standards to implement the principles of price.
 The factory has a system to handle customer complaints.
 The company implementing branding, packaging and labelling is done based on the theory
and a means to achieve its goal and objectives.
 The company perform new product planning.

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 3.7. Recommendation

From our observation and finding with the questioner and interview we get not such a high
disparate with their product planning and pricing decision. But for more competitive and role model
for others we forwarded the following recommendations.

 The company should be free from the political intervention.

 Marketing department of the company improve the market share of the company.
 The organizations should improve the marketing research to develop the market.
 The organizations should improve sales volume as per the company plan and to achieve main goal
of the company.
 The organizations should improve complain handling method. Because there are some complains
surrounding the company in related to environment pollution.
 The organizations should improve the pricing decision strategy to be effective and efficient.
 The firm should improve product planning and pricing decision by providing continues training for
their employees.
 Many customers are attracted by price cuts and discount tags so the company should maximize
price reduction

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Reference

 (Kotler and Keller, 2008: 5)."

 (Kotler et al. 1996).
 (Grönroos, 1989).
 . Jerome McCarthy,
 Philip Kotler, Marketing Management: Analysis, Planning, Implementation, and
 Control, 9th edition, Prentice-Hall of India Private Limited, New Delhi, p., 435
 4 Fundamentals of Marketing, Stanton W.J., Etzel M.J., Walker B. J, McGraw-Hill, Inc,
 Bangladesh Open University Marketing Management Page - 295
 Singapore, 1994, p., 273.

 Posted by Jason Loui at 5:49 PM Labels: competition-based pricing, definitions, mark, value

pricing, value-based pricing
 https://www.feedough.com/new-product-development-npd/
 Marketing Management, Millennium Edition Philip Kotler p., 277
 Read more: http://businessjargons.com/pricing-in-marketing.html#ixzz4xwZsVY7Y
 4 Fundamentals of Marketing, Stanton W.J., Etzel M.J., Walker B. J, McGraw-Hill, Inc,
Singapore, 1994, p., 273.

 http://businessjargons.com/pricing-in-marketing.html

 https://www.safaribooksonline.com/library/view/marketing-plans-for/9780470979419/

 https://www.safaribooksonline.com/library/view/marketing-plans-for/9780470979419/
 April 9, 2006admin Sales/Marketing Management
 Philip Kotler and Kevin Lane Keller, Marketing Management, 13th ed. (Upper Saddle River,
NJ: Prentice Hall, 2009), p. 288. © 2009. Printed and electronically reproduced by permission of
Pearson Education, Inc., Upper Saddle River, New Jersey.

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 Debre Brehan University

COLLEGE OF BUSINESS AND ECONOMICS

Departments of Management

MASTERS OF BUSINESS ADMINISTRATION (MBA)

Course title and code: advanced -marketing management

Our group students to do the assignment which provided by departments of management MBA for
the course advanced -marketing management we chose your company to study the product
planning and price decision making strategy for academic purpose. Based on this your company
will give a vital information for our questioner. Thank you for give vital information and
corporation. The questionnaires are

1. Can you explain your company profile of Debrebrehan Dashen beer

factory?-------------------------------------------------------------------------------------------------
--------------------
2. Does your company use new product strategy? A .yes, B. No if you say yes Can you
explain it ---------------------------------------------------------------------------------------------
3. At what is stage currently your company? Can you explain it
…………………………………………………………………………..
4. How should you react to your competitor’s by price? Can you explain it
…………………………………………………………………………………..
5. Does your company have a clear brand visibility? Can you explain it your answer
--------------------------------------------

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 6. How did you position the brand of flagship product in the minds of the public? A .yes
B. No Can you explain it your answer -----------------------------------------------
7. . What is your packaging and labelling strategy? Can you explain it your answer ---
…………………………………………………………………………………………
8. What is your company marketing strategy regarding to nature of service, managing your
product and delivering the product? Can you list them
…………………………………………………………………………
9. . What is your company pricing techniques regarding your strategy. Can you list them
--------------------------------------------------------------------------------------------------

10. Do you think your company product planning and pricing strategy effective and
efficient? Can you explain it
---------------------------------------------------------------------------------------------------------
11. What problems or challenges are your company faces in product planning and pricing
strategy? Can you explain it ---------------------------------------------------------------------

Acronyms
 SWOT Strength weakness opportunity trait

 USA United state of America

 IHIP’ (intangibility, heterogeneity, inseparability and perish ability)

 BOGOF (Buy One Get One Free).

habtamuhani7@gmail.com

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