Promotional Communication

Midterm Project: IMC Project

Prepared by

Jihane Moussaoui

Dalal Oubraim

Instructor: Dr. M.Ibahrine

Spring 2009

Introduction

For our IMC project, we chose to perform our in-depth analysis on the

Moroccan Cooperative COPAG Jaouda. Actually, we found that COPAG Jaouda is an

interesting case to consider, first because the milk sector is of paramount importance

in Morocco in that the consumption of Milk in Morocco stands between 55 to 60

million liters per month (Telquel, 2008). Second, COPAG Jaouda is penetrating

heavily the Moroccan milk market, and it competes against a giant in the milk sector

which is La Centrale Laitière (Group ONA).

In this paper, we will analyze the marketing-communication program of

Jaouda in light of the integrated marketing communication principles, criteria and

strategies, especially the four fundamental decisions and the four implementation

decisions.

Before elaborating our analysis we shall first present an overview of the

overall state of Jaouda, in terms of: the mission statement, current state in the

Moroccan market, business goals, and SWOT analysis.

Presentation of COPAG Jaouda

Copag Jaouda was founded in May 1987, in Taroudant (Ait Yazza), by Mr.

Mly Mohamed Loultiti in collaboration with 39 farmers (M. Loultiti, direct

interview). The cooperative is taking in charge its products from the production, the

transformation until the commercialization step. Also, it employs 14 000 farmers and

3300 people. The cooperative’s social capital is of 140 000 000dhs, its investments of

700 000 000 dhs, and its annual total revenue of 1.8 billions dhs (L’Economiste

Magazine,2008). At the beginning, COPAG was only specialized in citrus production

and exportation. COPAG’s dairy activity “Jaouda” started in 1993: its production

per day has increased tremendously from 50 000 to 500 000 liters, to attain 700 000

liters today. COPAG’s success story is mainly due to its dairy activity “Jaouda”

which represents 70% of the total revenue of the cooperative COPAG against only

30% for citrus. In our project we shall focus on COPAG’s dairy activity namely

Jaouda (M. Loultiti, direct interview).

Mission Statement

According to Mr. Loultiti the top manager of COPAG Jaouda, the first aspect

of the mission is to develop innovating and good-quality milk products that will

enable the cooperative to meet the expectations of current and future consumers. The

second characteristic of the mission is that through the actions of supply, supervision

and training in close collaboration with national and international partners, COPAG

seeks to improve productivity, profitability of its activities, and hence to ensure

economic growth of the sectors of activities where it operates (M. Loultini, direct

interview,2008). The third aspect of Jaouda’s mission statement is to ensure socio-

economic development of the rural region of the Souss in the south of Morocco, and

to ensure stable revenues for farmers. Such a development is related to the

employment opportunities offered by the cooperative throughout the region.

The business current state of Copag Jaouda:

Shift from being exonerated from taxes to being obliged to pay taxes

Total revenue: 1.8 billion dhs (L’économiste magazine, May 2008)

Market share: 20% (for Centrale Laitière: 70%) (L’économiste

magazine, May 2008)

Dairy production: 500 to 700 Tons per day (L’économiste magazine,

May 2008)

Copag Jaouda’s distribution circuits: from Tiznit to Meknes. The north

and east areas are being covered only starting 2008.

Working on establishing a new production unit in Larache (M. Loultiti,

direct interview).

Main competitor: Centrale Laitière (ONA), Chergui , Yogo, and

regional cooperatives

The Business goals of Copag Jaouda:

According to M. Loultiti the business goals of COPAG Jaouda are the following:

Reach a market share of 30% by the end of 2010

Increase total revenue by 4% by 2010

Reach a customer satisfaction rate of 80% by 2010

Increase the total production

Launch new products: flan, crème dessert, different types of cheese…

Ensure the expansion and growth of the company: cover the whole

Moroccan market and access the North African and African market.

SWOT Analysis:

The SWOT analysis will be conducted at different levels namely the

organizational, individual, and process level:

1. Strengths at the Organizational Level

Related diversification of products (milk, yogurts, butter…)

Cooperative status: according to the law 24-83 cooperatives

beneficiated from the exoneration of taxes namely IS and TVA until

the year 2005.

Copag Jaouda detains 20% of the marketshare (in only 15 years)

(L’economiste, 2007).

Daily production: from 500 to 700 tones (L’economiste, 2007).

Copag Jaouda has started with a unit of production in Taroudant, and

now it is working on establishing a new one in Larache (2000 cows so

far) (L’economiste, 2007).

The high demand addressed to Jaouda Products pushed Marjane

(Group ONA) to reinstitute jaouda’s products in its points of sale (M.

Loultiti, direct interview).

Large distribution represents 10% of the total revenue of Jaouda.

Copag Jaouda has many distribution stores in the different cities of the

Moroccan territory.

Jaouda’s success has been promoted by the traditional circuit: grocers

shops that are mainly hold by “Soussi” people. There was certain

solidarity between the vendors the drivers or distributors and COPAG

Jaouda due to the shared origin and culture.

COPAG Jaouda is actively engaged in social responsibility: in July

2007: the firm has created a station for treating used water (M. Loultiti,

direct interview).

2. Strengths at the Individual Level

According to Mr. M. Loultini Jaouda has:

14 000 farmers and 3300 direct employees

3200 collaborators

COPAG Jaouda provides trainings to its employees.

COPAG Jaouda has qualified engineers and competent workers

especially in the technical department and laboratory.

3. Strengths at the Process Level

Good quality of raw material (good quality of milk, and cows).

Good machinery and equipment.

Copag Jaouda’s integrated activity: from the production,

transformation until the distribution allows more flexibility of its

processes.

Logistic: 360 trucks for distribution: trucks’ drivers call each others

for free thanks to an intra network with meditel (M. Loultini, direct

interview).

Respect of hygiene conditions: certified ISO 9000

The factory is working 24/24 hours.

COPAG Jaouda has recently (March 2005) created a common farm of

a capacity of 11 000 cows, and a new factory for cattle food (900 000

tonnes per year).

4. Weaknesses at the Organizational Level

Jouada’s products distribution was limited to the circuit Tiznit –

Meknes until 2008. The north and east areas started being covered just

lately.

At the macro level Moroccan consumers are not aware and informed

about Jaouda, and its products especially the northern and eastern

regions.

Advertising and marketing is not very developed ( in contrast with

Centrale Laitière)

The region of souss is not attracting too much investment in

comparison with other regions: Casablanca, Rabat…

Because of the new taxation measures concerning the cooperative

sector Copag Jaouda is no more exonerated from taxes and is obliged

to pay an amount estimated of 110 million dhs taxes annualy.

According to Mr Loultiti (direct interview, 2008), the loss due to this

new measure is very important. It is estimated to 50 centimes per liter,

and farmers have been taken off 20 centimes per liter.

Jaouda’s products are diversified but they are not offering: flans, crème

dessert, different types of cheese

5. Weaknesses at the Individual Level

Recruitment is done mainly from the southern labour pool (region of

souss)

Problem of qualification: it is too difficult to find qualified people.

Bottom line employees are not committed, not motivated.

Bottom line employees: high rate of stress and absenteeism.

Considerable turnover rate in the laboratory department.

6. Weaknesses at the Process Level

Logistic: High transportation costs since they are located in Taroudant.

Machinery treatment capacity: previously the amount of collected milk

was hugely superior to the treatment capacity

Production (or supply) is inferior to the demand. There is an amount of

10% to more than 20% of the demand that is not satisfied each year,

especially during the summer and Ramadan when the demand is

relatively high.

7. Opportunities at the Organizational Level

Opening of a production unit in Larache: easy access to resources

(large area, good weather conditions, labor…) which allows on one

hand the company to minimize its costs of production thanks to its

strategic location and on the other hand to cover larger distribution

areas (North & East of Morocco).

Establish partnerships / alliances with foreign brands like Yoplait.

Especiallly that La Centrale Laitière encounters tensions with its

French partner Danone because the visual identity of Danone is

slightly visible on the packaging of the products

Covering larger distribution areas

Expand its products in the North African & African market.

Develop its organizational structure (expand its growth)

8. Opportunities at the Individual Level

Hire more skilled workers and also from foreign market pools.

Importing good and efficient machines

Expand its stockage and treatment capacity

9. Opportunities at the Process Level

Improve the logistic.

Improve the research and development process

Improve the speed to market

Improve the marketing, innovation, advertisement …

10. Threats at the Organizational level

Competition: Copag jaouda’s main competitor La Centrale Laitière

(Groupe ONA) detains 70% of the Moroccan marketshare and is the

leader of milk industry in Morocco. Other competitors: Chergui, Yogo

and regional cooperatives.

La centrale laitière is investing heavily in innovation, marketing,

research & Development…. According to Mr Driss Traki La Centrale

Laitière’s strategy consists of launching a new product each month.

Until 2005 l’ONA has forbidden jaouda’s products to be sold in

Marjane (Group ONA). Marjane constitutes an important distribution

channel in Morocco.

La Centrale Laitière has been exerting too much pressure on the

government especially the finance ministry, denouncing the unfair

competition: La Centrale laitière is obliged to pay taxes while its major

competitor Jaouda is realizing huge benefits (without paying taxes) and

gaining more and more market share. The exoneration from taxes has

enhanced and facilitated the company’s success. In order not to

penalize the entire cooperative sector, the government decided to

cancel the exoneration from taxes for cooperatives that have a revenue

of more than 1 million dhs, and that have an industrial or semi

industrial process.

Consequently, Copag Jaouda has been obliged to pay taxes since 2005.

11. Threats at the Individual level

Being obliged to pay taxes has pushed copag jaouda to reduce its costs:

reduce price of milk purchased from farmers. Reduce wages and the

workforce as well

La Centrale Laitière is having more qualified and high skilled

employees.

12. Threats at the Process level

Crisis of the milk sector

Milk sector is experiencing shortage and high increase of

prices. (importation of cows, milk powder, cattle food… ).

Actually, globally, the milk sector experiences a high increase

of prices. This raise is experienced by the Moroccan milk

sector as well, which moved from an average price of 20 000

DHM per ton in 2005, to more than 25 000 DHM in 2008

( Telquel, 2008).

MARCOM Program

Now that we have presented a snapshot of the situation of Copag Jaouda, we

can shed more light on the MARCOM strategies and efforts of the company.

Fundamental Decisions

Targeting:

Targeting specific market segments is a fundamental step to all Marcom

programs. Indeed, it allows the company to deliver its messages and efforts in a

precise and efficient way.

Jaouda is targeting the local Moroccan market. The population representing the

target market segment of Jaouda consists of common Moroccans having the following

characteristics:

- Different ages: children, adolescents, and adults. Yet, here we can say mainly

children and young people, because at the cultural level in Morocco yogurt is

more synonym to childhood and youth.

- The majority of Moroccans is illiterate and lives in rural areas.

- The majority of Moroccans earn a low income, which means a limited

purchasing power.

Due to the lack of studies and data in terms behaviorgraphic and

psychographic dimensions, we decided to rely on our own observation and

experience during the past concerning goods of the same product category

(milk products) for example yogurts of La Centrale Laitière. In this context,

we can say that in general (talking about an important part of the population)

Moroccans are having modest lifestyles that are determined mainly by their

income, area of living and level of education. The most important factor that

will determine Mroccans’ decision to buy or purchase a product is the price,

and then comes the quality. Thus, we can conclude that Moroccan consumers

demand simple, practical, and inexpensive products.

Accordingly, Jaouda is offering simple types of yogurts (not

sophisticated products such as crème dessert, or mousse au chocolat for

example), of a good quality, with simple and very basic flavors (vanilla,

strawberry, apricot, peach…), and with reasonable and competitive prices

(they offer yogurts starting only one dirham). Here, we can say that Jaouda

starts with the consumers (constituting its target market segment), and then

elaborates its products according to their expectations.

Positioning:

Jaouda establishes its central idea that enhances its distinctiveness towards

competition on its good quality and good taste. The positioning statement of Jaouda

that is consistently delivered throughout its MARCOM efforts is: “Jaouda c’est bon!”

Besides, after asking some people (friends, family) they all stated that Jaouda

products have better taste than Centrale Laitière yogurts, and this statement includes

as well our own point of view. This is mainly due to the fact that Jaouda has a limited

number of production units which makes the managing and controlling processes

easier, in contrast with Centrale Laitière which has several production units.

Setting Objectives:

The role of MARCOM strategies in achieving the business goals of Jaouda

mentioned above, are of paramount importance. Jaouda is using different MARCOM

strategies: ranging from the least frequent such as TV and radio commercials, to the

most frequent such as billboards, wall ads, and ads in newspapers and magazines. We

will develop these communication media later in the paper.

Budgetting:

This part is concerned with the amount of the financial resources or budget

allocated by Jaouda to its MARCOM strategies. Actually, Jaouda does not devote as

much financial resources to advertising as its main competitor La Central Laitière.

This is because of, first the belonging of La Centrale Laitière to the Group ONA, and

its co-branding relationship with Danone (France). This fact allows La Centrale

Laitière to allocate huge investments to its advertising campaigns. Eventhough, given

the size, budget, and benefits of the company (jaouda), the MARCOM efforts of

Jaouda are of considerable significance.

Moreover, the budgeting decision in Jaouda is mainly a “top-down” one in

which the senior management decides how much money will be devoted.

Implementation Decisions

Now, we will see how the fundamental decisions of Jaouda are influencing the

implementation decisions.

Mixing Elements

Jaouda is combining between different communication tools instead of

focusing on only one medium, in order to produce a synergistic effect. Concerning

advertising, namely on TV and radio, it necessitates huge expenses ( 20000-30 000

dhs for only 30 seconds on TV), that is why the company is not very frequent on TV

ads. Thus, the strategy of Jaouda is to invest enough on promotions through: points of

purchase communication, taste marketing, rebates… to ensure enough short term

sales, and at the same time spending enough money on advertising in particular in

newspapers and magazines in order to ensure the maintenance and development of its

brand equity at the long term.

Creating Messages

As it has been stated earlier in the positioning section, the main message of

Jaouda stands on offering good products of good quality and good taste at a

reasonable and low price accessible to all Moroccans: “Jaouda c’est bon!” as we can

see, the slogan does not reflect any kind of rigorous work or creativity. However, this

is valid only if we compare with foreign advertisements, but if we consider the

Moroccan context, people will not understand a complicated, implicit, or

philosophical slogan. That is why Jaouda’s message is as simple and as basic as the

products it is offering.

Selecting Media

As we have said, Jaouda’s MARCOM efforts in advertising are targeting

mainly newspapers and magazines such as L’economiste, La vie économique,

L’économiste magazine, Telquel… and billboards and wall ads as well. In this

context, L’économiste Magazine, has published in its first issued number in May 2008

five full pages about Jaouda. These five pages included a detailed presentation of the

company with an interview with the top manager M. Loultiti, and a page of

advertising of the different products the company is offering namely: Cremy, and

Mixy (yogurts).

On the other hand, the different communication tools in terms of promotion are:

- Point of purchase communication mainly taste-marketing: setting Jaouda’s

stands proposing to customers to try Jaouda’s products for free, especially in

the large distribution: Marjane, Assouak Salam, and Label vie. Actually, this

communication tool is highly effective in establishing quick and efficient

touch points with consumers.

Establishing Momentum

It is clear that Jaouda is not as frequent in advertising as La Centrale Laitière,

but an important thing to notice is that Jaouda maintains a certain ascending

continuity of its MARCOM efforts.

How is Jaouda enhancing its brand equity?

As we have seen earlier in the SWOT analysis, the main factor that has helped

Jaouda to penetrate successfully in the milk market is the traditional circuit (small

stores) throughout Morocco.

1- Speak for itself approach:

Consumers started trying Jaouda’s products and learned trough usage how

good they are. At this stage they know that Jaouda’s products have better taste than

others in the market, and that they really reflect the brand name meaning

(Jaouda=good quality).

2- Message-driven approach:

Once, consumers have developed a certain general idea of the brand and its

products, Jaouda started reinforcing this general idea in the consumers’ collective

mind through advertising and promotion tools (developed above). The role of

MARCOM efforts here is to build and maintain positive, favorable, strong, and

unique links with the consumer. When the slogan says “Jaouda c’est bon”, or when

M. Loultiti publishes interviews in magazines where he says that the company’s main

objective is to deliver good-quality products to its consumers, this is actually

emphasizing and reinforcing the idea that consumers has developed about the

products when trying them for the first time. Besides, the continuity of apparition of

the brand’s name in billboards, newspapers, magazines, TV … is necessary to

maintain the brand awareness and equity of consumers towards the company.

3- Leveraging approach:

The main purpose here is to leverage positive associations through

establishing links with other brands, places, things, and people. Jaouda is so far

focusing on the conexion with places: the main production unit of Jaouda was

established in Taroudant. This region is well known for its richness with natural

resources especially in cows, greenness…

Thus, the associations of Jaouda that are stored in consumers’ collective mind are:

good quality, good taste, good (reasonable) price.

Furthermore, if we had to categorize Jaouda according to the five personality

dimensions, it would fit within the sincerity and competence dimensions.

Similarly, if we had to place Jaouda within the Brand Awarness Pyramid, we

would situate it with the Brand Recall level. Currently, people are very aware of the

name Jaouda, especially milk, and some well known yogurts such as Mixy, Cremy,

Ghilal, ladid… for example people can go to a shop and ask for a Jaouda product, or

they can easily recall the name during a discussion. However, to our mind we are

convinced that the Top of Mind level is undoubtedly occupied by La Centrale

Laitière: this is clearly reflected by the use of all Moroccans of the brand name

“Danone” to designate yogurts in general (regardless of the type or brand).

Positioning Via Brand Benefits

Benefits are the personal value consumers attach to the product or service

attributes.

Benefits are the need-satisfying features provided by brands. In short, needs and

benefits can be thought of as flip sides of the same coin. Brands present a combination

of functional, symbolic and experiential benefits. In the case of Jaouda only the two

first ones exist since there is no experiential benefit.

Functional benefits

Functional benefits offer to satisfy the consumer’s consumption needs and

solve problems related to it by spreading the idea which says that the brand has

particular benefits to resolve these problems.

The functional benefits in Jaouda are related to satisfying many needs of the

consumer. First of all, the most important need is having a high quality product; this is

to say, Jaouda must follow high standards to provide tasteful products that can face

competition. Second, the company provides services to its consumers such as offering

a call center where they can call to get information about the product or complaint if

they have any problem. The third need to be satisfied is associated to respect the

consumer’s good health and the cleanliness of the product. In fact, to buy the product,

the consumer needs to be sure that it would not affect his/her health in addition to the

fact that Jaouda has to respect cleanliness standards by making special packaging (As

we have stated in the SWOT analysis Jaouda has an ISO 9000 certification). One of

Jaouda’s functional benefits is that the whole family can enjoy it because it’s a

product that can be used by everyone young or old. Finally, the price is not very high

so that a large number of people can buy it.

Symbolic benefits

The symbolic benefits, in contrast with the functional benefits, deal with

associating brand ownership with a desired group, role or self image since name over

time becomes guarantee of quality and consistency. This allows the merging of the

consumer and the brand. In this stage, management should pay attention to create the

right personality for the brand and to update it when needed. In effect, the image of

the product must serve the consumer’s needs. For instance, Jaouda succeeded in

enhancing its image in Morocco since it is now an official competitor to Centrale

Laitière and has more and more consumers because of the products’ high quality.

Also, the product is Moroccan, simple and basic.

Jaouda brand name

We can say that Jaouda’s brand name is appropriate because it satisfies the

four conditions of a good brand name:

“Jaouda” which means good quality is compatible with the brand positioning

statement of the company, and the brand’s benefits. Indeed, it reinforces what the

brand wants to convey to the consumers and what distinguishes it from the

competition. In addition, it is short, easy to pronounce, to spell and to memorize.

Nevertheless, the brand’s name is not conceived to be suitable for marketing in

multiple countries, but since basically Jaouda is targeting only the local Moroccan

market, this is not a problem.

Jaouda’s logo

The logo of Jaouda can also be considered as appropriate since it is legible, it

presents the essential idea of the company’s positioning statement, and it reflects a

positive meaning. The picture of the cow next to the brand name indicates that it is

milk product category, and that the product are natural and of good quality.

Moreover, if we take the specific yogurt “Cremy” one of the most successful

products of Jaouda, we can see that the packaging style is neither innocent nor

arbitrary. The use of the green color means that the product is natural, and healthy.

The different flavors are placed on the different sides of the product by pictures of the

fruits or flowers representing the flavor: again the notion of natural and healthy

products.

Motivation to attend messages

Jaouda uses different strategies in order to attract voluntary and involuntary

attention:

- Hedonic needs: In most of its advertising it presents enjoyment, pleasure,

nature, childhood, warm family scenes to appeal to hedonic needs.

- Use of intense and prominent cues: packages, billboards, and wall ads that

solicit involuntary attention.

- Using motion: Jaouda uses motion especially in packages, billboards, and

newspaper ads. They are using photographic techniques to produce an effect

of movement.

Recommendations

First, Jaouda has a good position in the Moroccan market, so there is a

perspective of developing its growth and accessing new market segments, namely the

North African, and African markets.

Concerning our recommendations, we encourage Copag Jaouda to build a

strategic relationship (Co-branding relationship) with a foreign brand such as Yoplait

(France). Actually, Yoplait would be interested in the positive evolution* of Jaouda,

and this will be an opportunity for the French brand to access successfully the

Moroccan Market, especially that Yoplait had a previous experience in Morocco.

Indeed, the co-branding relationship will allow Jaouda to increase its investments, and

to augment its production. In addition, Yoplait will help Jaouda to invest in research

and development, improve its marketing and advertising processes, and to launch new

products. Then, Jaouda will be able to face its main competitor La Centrale Laitière

and increase its market share.

*This graph shows the positive evolution of Jouda’s milk production.

Conclusion

All in all, throughout our project we attempted to elaborate an in-depth

analysis of the marketing and communication strategies of COPAG Jaouda. In this

context, we can say that even though the company does not have a developed

advertising as its main competitor La Centrale Laitière, its efforts in this context are

of considerable significance.

References

L’Economiste, 2007. Grande distribution: Menace pour les petits agriculteurs.

Retrieved from http://www.regoverningmarkets.org/en/filemanager/active?fid=421,

on the 04/016/2008.

Telquel Online, 2008. Les Greniers du Maroc; un autre Maroc. Retrieved

from http://www.telquel-online.com/106/couverture_106_4.shtml, on the 04/16/2008.

http://www.amdra.com/jaouda_laitsurnaturel

L’Economiste Magazine, 2008. “COPAG Jaouda”.

T.A. Shimp (2007). Advertising and Promotion. South Carolina: Stratford

Publishing Services.