PROJECT COMPLETED BY: Muhammad Nabeel Shahzad Siddiqui Saad
Mahmood Khan Syed Abbas Haider Abidi Muhammad Salman Khan Mihammad
Omer Sharif
PROGRAM:Masters in Business AdministrationPROJECT ON: Marketing
Report on OLPER`s
PROJECT SUBMITTED TO: Muhammad Ishaq Sheikh
IQRA UniversityMasters in Business Administration
Certificate
This is to certify that Muhammad Nabeel Shahzad Siddiqui , Saad
Mahmood Khan, , Muhammad Omer Sharif, Syed Abbas Haider Abidi and
Muhammad Salman Khan have submitted their term report on the
Olper`s Milk to the Department of Business Administration.
__________________________________________Muhammad Ishaq Sheikh
Faculty of Business Administration
ACKNOWLEDGEMENTS
In the beginning all Glory to Allah Almighty by Grace of Whom we
were able to complete our Term Report. It was His will and guidance
that we were able to take this report as a challenge and in the end
He bestowed us with his blessings. Next we would like to thank our
parents whose constant efforts and appreciation encouraged us in
every aspect of our lives and InshALLAH will continue to do so.Our
Sincere Thanks to Faculty of Business Administration for supporting
us and guiding us in every phase of our report.Special Thanks to
our Teacher Muhammad Ishaq Sheikh who not only suggested us this
report but also gave us his full support and shared his precious
office timings to discuss different phases of report whenever we
needed.
BRAND INTRODUCTION
Olpers is UHT Milk UHT means Ultra Heat Treatment. In this
process the milk passes through 140 degree centigrade in 3 seconds
and then immediately cooled to 20 degree centigrade in the next 5
seconds, which in turn kills all the bacteria. This is the most
sophisticated and advanced process in the world. At Engro Foods
Limited we use the indirect method of UHT meaning that milk is
heated by steam passing through stainless steel pipes outside milk.
All other brands in Pakistan use the direct method of heating that
is by injecting steam in the milk, this adds water content in the
milk, where as indirect heating in fact evaporates water from the
milk. This is what makes Olpers the "Thickest Milk".
BRAND HISTORY
Engro Foods limited (EFL) had only recently been established by
Engro a traditional giant in Pakistans chemical and fertilizer
industry. EFL launched Olpers Milk after long tenure of consumer
research, time and money consumption. During this time they
continuously observe the issues with the packed milk. After three
years of their launch Olpers Milk gain reputation among consumers
and now currently holding 49% of market share. Within the dairy
market, company now has a diverse portfolio of products ranging
from different types of cream to premium low fat milk.
The packaged milk category was originated in 1981 by Milk Pak,
which pioneered tetra pack milk in Pakistan. The supply chain
involved collecting milk from rural areas across Punjab, processing
the milk through UHT (Ultra-High Temperature Processing) treatment,
and selling it to consumers in uniquely colored triangular and
rectangular packs designed. By 2006, the dairy milk category was
growing at 20 percent annually. Brands like Milk Pak (owned by
Nestle) and Haleeb Milk (owned by Haleeb Foods) had led the dairy
market in the worlds fourth largest milk producing country for
nearly two decades without any real sustained competition. Milk Pak
was identified by its green and white packaging the colors of the
country and offered a brand backed with the strong equity of
Nestle. Haleeb was recognized as the blue brand, and professed to
have the naturally thickest milk.
Olpers has woken up the competition. Milk Pak responded with
campaigns of its own to reaffirm the positive equity of its brand.
Haleeb implemented a response as well. And Olpers starts cutting
its market share after competition become fierce.
Olpers, however, stepped into the foray by launching a massive
campaign that started off with an introductory slice-of-life.
Olpers as a contemporary and modern brand as the name itself made
sound like a foreign brand, giving the perception of quality. To a
large extent, they were successful.
Secondly they did some product changes picking red as the brand
color in spite of greens and blues color, which also helped to
enhance the in-store visibility and presence for Olpers packaged
milk, and disassociation from its competition.
Thirdly they highlighted and expanded upon the various occasions
in which milk could and should use and making it All Purpose
Milk.
Engro Foods has recently expanded its brands portfolio by
launching a premium quality ice cream with the name of Omore. Omore
started its sales from the city of Lahore because of the culturally
inheritor of celebrator of festival of colors i.e. The Spring
Festival. They have started off with 24 different packs and flavors
that attract kids and adults from all walks of life.
Vision
"Our vision is to become a fast expanding giant foods company.
To achieve our vision,the company will initially focus on dairy by
investing a substantial amount in plant, milkcollection capability
and marketing. We are making concrete efforts to expand in
andbeyond Pakistan; through strategic international alliances, to
eventually becomeglobal."
BRANDS OF ENGRO FOODS.21% of all Products
OPLERS (Full cream) TARANG (Tea Whitener) OLWELL (0% fat)
OLPERS CREAM TARANG (Powder Tea Whitener) OWSUM (Flavored
Milk)
OLFRUTE JUICE OMOR ICECREAMTARKA 1kg (Aslee Ghee)
STOCK KEEPING UNIT 1000 ML
__________________________________________12 Liters 1500 ML
__________________________________________12 Liters 250 ML
__________________________________________6.75 Liters 500 ML
__________________________________________6 Liters
COMPETITION ANALYSISMILKPAK
MARKETING SHARE Loose Milk 96% (Un-hygienic) Packed Milk 4%
(Hygienic)
PACKED MILK MARKET SHARE:
OLPERS 49% NESTLE 45% OTHERS 9% (Haleeb, Good Milk, Day fresh,
Nurpur etc.)
PUBLIC OPINOIN & PERCEPTIONPublic like Olpers due to its
availability and rich taste. Olpers provide good taste in tea and
other dishes which include milk. The other perception is shown in
graphs as under: PERCEPTION ABOUT QUALITY
PERCEPTION ABOUT PACKED MILK
GRAPHICAL REPRESENTATION Advertisement. Advertisement in Movies.
Preferred TVCs. Best Packing.
ADDS IN MOVIES
ADVERTISEMENT
PREFFERD PVCsBEST PACKING
SUPPLY & DISTRIBUTIONCompany appoints distributors to reduce
risk factors, investment risk, ware house risk and cost of
transport.
According to Mr. Ali Akbar, Director Marketing EFL:
In order to succeed, you should ALWAYS capitalize on your
STRENGHTS and NEVER on your COMPETITORS WEAKNESS!EFL did exactly
that. They used their decades of PR with farmers and used it to
provide world-class supply-chain management for delivering the
ultimate quality milk in Pakistan. Having kicked off simultaneously
in 20 cities across Pakistan, the launch has been ambitious and
currently Olpers is available in 80 cities across Pakistan. It
reflects the companys intention to become a big player in the
industry, both on a national and international level.
EFL has its own dale and distribution network. EFL has divided
Pakistan into five regions of milk distribution namely: Karachi,
Lahore, Islamabad, Multan and Peshawar. Due to an appealing color
scheme, which stands out in the clutter and thanks to EFLs strong
relationship building and special discounts to retail outlets,
Olperss has gained a proper shelf placement in the presence of
competitors like Nestle and Haleeb.
EFL DISTRIBUTION CHANNEL 7 Distributors (General Trade).
ICA (International Chain Account).
Makro (10% of total sales). Metro (10% of total sales).
Food Services. 2 Distributors (10% of total sales).
COMMUNICATION CHANNEL
DISTRIBUTION CHANNEL
PLANT-1WARE HOUSE-1KARACHI
WARE HOUSE-2 HYDERABAD
PLANT-2WARE HOUSE-3SUKKARPRICE The prices of Engrofoods Olpers
vary according to the size. The prices of the Available Olpers
Packs are shown below.
Pricing Methods/Pricing strategies
The Engrofoods Olpers are sold in retail stores, convenient
stores, Departmental outlets etc. The pricing methods/strategies
are set by those the company sells to. Convenient stores,
Departmental outlets usually sell Olpers at a fixed price according
pack sizes. However, retail outlet uses pricing methods and pricing
strategies when selling Engrofoods Olpers. Pricing methods Pricing
method Explanation of pricing method Competition-based pricing
Engrofoods Olpers is usually priced below, above or equal to its
competitors' prices. Discount price Olpers are often marked down
during sale periods and special occasions. Like Ramadan this will:
Generate sales Increase profits
EFL is pursuing the competitive pricing strategy for its
products. Size(ml)Olpers(per carton)
1500739
1000792
500430
250509
RETAILER PERCEPTION
CONSUMERS REVIEW
SEGMENTING AND TARGETING THE MARKET FOR OLPERS It is difficult
for any company to engage in mass production, mass distribution
andmass promotion for its product. The complexities arise from the
proliferation ofadvertising and distribution channels and the high
costs associated with reaching a mass audience. Therefore,
companies segment the market so that they can target the group of
customers who share similar needs and wants.
The milk sector shows a market that has homogeneous preferences
i.e. consumers have similar preferences. They want milk to be
white, carefully processed, and good for health and bones. Keeping
these things in mind Olpers market has been segmented. The
marketers at Olpers have had a number of options available to them
when segmenting the market for their products. So far company has
introduced three new products: Olpers milk. Olwell diet milk.
Olpers cream.
DEMOGRAPHIC SEGMENTATION
Olpers products are not bounded to any particular age, gender or
lifecycle. The brand is meant for all the users of higher upper or
middle class families. Even though the brand calls for a small
percentage of an individuals income but lower class wouldnt want to
buy the brand maybe because they are price sensitive or because
they believe lose milk is better than processed milk and has all
the nutrients that the processed milk lacks.
However all the companies in the milk sector are trying to
change the image of processed milk as non-nutritionist milk.
Therefore it can be said that Olpers has been positioned as a brand
for high income earners. Due to the income factor involved it can
be said that Olpers milk target a specific social class who are
health conscious and concerned about their weight.
PSYCHOGRAPHIC SEGMENTATION
On the basis of psychographics, factors such as personality
traits, lifestyles and values, the marketers at Olpers have
segmented the market more towards achievers who are goal-oriented
and focused on their careers, and experience those who are seeking
variety in the milk sector.
For example the ads for Olwell mostly show achievers who want to
be successful, have high aims and are already doing quite well in
their concerned fields. The Olpers products have targeted
experiences because the company has given them a new set of brand
and so many will make their first purchase because they want to try
something new. Olpers ads also target believers, traditional
conservative people with concrete beliefs. The ads for Olpers show
the beliefs of healthy life with processed milk and plays on the
emotional aspect more.
BEHAVIORAL SEGMENTATION
Olpers products have been segmented on the basis of benefits
that consumers seek in the milk. In this case, people look for a
brand that can be used for all purposes fromdrinking to tea
whiteners as well to feed the animals. The ads also show that
consumersshould increase their milk consumption for example with
every tea they should use Olpers, every morning they should drink
Olpers and everyday they should feed their pets with Olpers milk.
There may be some hard core loyal in the milk sector. Loyalty maybe
towards such established brands as Nestle and Haleeb. There might
even be switchers and shiftingloyal in the milk sectors that are
either price sensitive or want variety. As a result, themarketers
need to find ways to make the hard core loyal attracted to the
Olpers brandand shifting loyal and switchers to convert into hard
core loyal as well.
POSITIONING THE BRAND
Positioning involves designing the product and image that will
occupy a distinctive placein the minds of the target market. As can
be seen, nestle milkpak and Haleeb have thelargest profit margins
and market share in the milk industry. Thus the marketers atOlpers
have decided to create its own unique image and then strengthen the
position in the customers minds. They have done this by taking a
number of following steps:
Packaging of Olpers milk and Olwell in red color and Olpers
cream packed in purple color are quite different and distinctive
from the typical green and blue packing used by other
competitors.
The brand has been positioned as an all purpose milk that is
meant for everyone, especially for those who live life to the
fullest, hence its tag line;
jo dil khol kay jeetay hain unheen kay liyay hai Olpers .
Olpers always tries to create customer intimacy that is it
focuses on satisfying thecustomers unmet needs. Processed milk is
seen as less lacking all the nutritions that are part of milk due
to passing through so many processes. But Olpers positions itself
as milk that has not lost its nutrients. The unique selling
proposition for Olpers is: Subah Bakhair Zindagi, but recently the
company changed the USP to: Jo dil khol kay jeetay hain unheen kay
liyay hai Olpers. Both the tag lines have a very positive impact on
Olpers image because of the emotions involved in both the
lines.
The marketers have used different positioning for Olpers
products:
They have used the attribute positioning for Olpers milk. The
main theme of the product is that it is meant for all purposes
without any user imagery. Olpers ads also show attributes of milk
such as good for health.
They used the benefit positioning for Olwell. The product is
positioned as delivering the benefit of helping to reduce weight
and for healthy bones.
Olpers cream is positioned as good for a specific use or
application. In this case the cream can be used to make cake icings
and desserts look great. It can be said that all the different
stages have been performed by the marketers with extreme care and
research.
COMMUNICATION AND SALE STRATEGIES
POSITIONING THE BRAND
Positioning involves designing the product and image that will
occupy a distinctive place in the minds of the target market. As
can be seen, nestle milkpak and Haleeb have the largest profit
margins and market share in the milk industry. Thus the marketers
at Olpers have decided to create its own unique image and then
strengthen the position in the customers minds. They have done this
by taking a number of following steps Packaging of Olpers milk and
Olwell in red color and Olpers cream packed in purple color are
quite different and distinctive from the typical green and blue
packing used by other competitors.
The brand has been positioned as an all purpose milk that is
meant for everyone, especially for those who live life to the
fullest, hence its tag line, jo dil khol kay jeetay hain unheen kay
liyay hai Olpers Olpers always tries to create customer intimacy
that is it focuses on satisfying the customers unmet needs.
Processed milk is seen as less lacking all the nutritions that are
part of milk due to passing through so many processes. But Olpers
positions itself as milk that has not lost its nutrients.
The unique selling proposition for Olpers is: Subah Bakhair
Zindagi, but recently the company changed the USP to: Jo dil khol
kay jeetay hain unheen kay liyay hai Olpers. Both the tag lines
have a very positive impact on Olpers image because of the emotions
involved in both the lines. The marketers have used different
positioning for Olpers products:
They have used the attribute positioning for Olpers milk. The
main theme of the product is that it is meant for all purposes
without any user imagery. Olpers ads also show attributes of milk
such as good for health.
They used the benefit positioning for Olwell. The product is
positioned as delivering the benefit of helping to reduce weight
and for healthy bones.
Olpers cream is positioned as good for a specific use or
application. In this case the cream can be used to make cake icings
and desserts look great. It can be said that all the different
stages have been performed by the marketers with extreme care and
research.
SWOT ANALYSISSTRENGTH ENGROS BACK
Olpers is a brand of EFL. This means that consumers can relate
their former Image of EFL to Olpers. ENGRO is a well established
brand name in Fertilizer, IT and infrastructure business. The brand
is well known so customers will automatically have a brand
association with Olpers and see it as a premium quality product.
ENGRO is world renowned so it can easily attract foreign investors
in backing it against other competitors such as Nestle.
EFL can easily afford research and development costs for Olpers
have in order to introduce new products. It can also distribute the
brand through better channelsbecause of its long term relationship
with distributors in the agriculture sector.
In first year, EFL crossed 1.4 billion sales figure which shows
customers satisfaction upon EFLs products. Its taste, quality
proposition and world-class quality proposition system.
STRONG CONSUMER & PRODUCT RESEARCH
Olpers done a strong consumer & product research before and
after launching the product. This has provided them the perfect
launching pad to eventually emerge as aglobal player in the food
industry. To develop its future portfolios, EFL has hired
variousglobal research partners like AC Nielsen, Mindshare, JWT
Asiatic and MARS marketingand advertising agencies.
WEAKNESSES
OWNING RED COLOR The company has not owned the color red like
Nestle has a green Milkpak; Haleeb has a blue carton etc. This may
create problems because when a consumer enters a grocery shop, then
he/she might have problems in recalling the brand because there is
no color association attached to Olpers. The company may need to
find a suitable color in which to focus its upcoming marketing
strategies. LOW QUALITY MILK EFL is not having its own dairy farms;
it largely collects loose milk from farmers through its 40 milk
collection centers, which sometimes is of low quality and
impurebecause they add vegetable oil to milk to get higher prices.
PACKAGING
EFL is dependent upon Tetra Pak for the packaging of its entire
dairy products. Tetra Pak is the only option available to Olpers
for packaging because it is having monopoly in the packaging sector
in Pakistan. Due to this reason, Tetra Pak can charge them higher
and it could increase the production costs.
MILK COLLECTION & DISTRIBUTION COSTS
EFLs 34 out of 40 milk-collection centers are located in Punjab,
whereas its only milk processing facility is situated near Sukkhur
(Sindh). It increases the milk collection & distribution costs;
and also increases the chances of milk getting spoiled because of
increased travelling time.
NARROW BRAND PORTFOLIO
It has been more than a year now, when EFL launched its first
dairy product, Olpers Milk on March20, 2006. But EFLs brand
portfolio still consists of just 3 products i.e. Olpers Milk,
Olwell Milk and Olpers Cream. Whereas its competitors like Nestle
and Haleeb Foods have a much diversified line of dairy
products.
OPPORTUNITIES
INCREASED FUNDING BY GOVERNMENT
Government has decided to increase farmers funding. This is an
opportunity for ENGRO foods because previously due to weather
conditions and other reasons there was lots of wastage of milk but
now that can be reduced as farmers will be better able to store
milk for longer time periods.
INCREASED CONSUMPTION OF PLM Competition may create
opportunities for the company because each competitor in themilk
industry wants to increase penetration of processed liquid milk and
so they willcreate awareness for consumers through different
advertising media. This will ensurethe increase in the consumption
of processed milk instead of lose milk and so will in turnlead to
increase in sales for the company. Therefore there will be an
opportunity foraccelerated growth. AWARENESS
Growing dissatisfaction with loose milk and increasing awareness
about health and hygiene issues have led to increased processed
milk consumption.
THIRD LARGEST PRODUCER OF MILK Pakistan is the Third largest
producer of milk in the world with a total production of 32billion
liter of milk a year, whose value is more than that of the combined
value ofwheat and cotton, from a total herd size of 50 million
milch animals (buffaloes andcows). Livestock accounts for 46.8
percent of agricultural value added and about 10.8percent of the
GDP. Milk is the largest commodity from the livestock sector
accountingfor 51 percent of the total value of the sector. Due to
the steps taken by the government and private sector, countrys
annual milk production is expected to grow at an additional 3
billion liters in the next few years. This is quite an opportunity
for ENGRO foods as there is lot of growth in this part of the
sector.
THREATS
COMPETITION
Competition may pose a threat because the company will have to
maintain its leadership in an expanding market so that it doesnt
lose its market share to its competitors. For Olpers it might be
difficult to penetrate in a market where the loyalties exist for
such brands as Nestle and Haleeb. These brands have been in the
milk industry far too long and have left a mark in the minds of
consumers in terms of quality. Competition seems to be getting
tougher as a result of new players entering the dairy market.
PERCEPTIONS AND PRICE DIFFERENTIALS
Consumers perceptions and price differentials can cause a threat
for the company. It is important that Olpers comes up to the
expectations of the customers and fulfills its conformance quality
that is the company meets its promised specifications. Consumers
preferences change with time and prices might create certain
barriers in terms of the profit margins for Olpers. For example,
lose milk is still cheaper than packaged milk and that is also one
factor that people still prefer to buy lose milk.
RECOMMENDATIONS:
Before lunching Olpers Milk, Engro spent a lot of money on
advertisement but at that time Olpers is well known in the market.
So, my recommendation to Olpers is to reduce the advertisement
budget and this amount should be added to CSRs budget.They should
start to manufacture powder milk in order to meet the domestic
demand and so that it can be helpful in saving the foreign exchange
that is expensed in importing the powder milk from foreign
countries.
CONCLUSION:
Olpers stand committed to sustainable business growth and ensure
the safety of their people, assets and community in which they
operate. They repute as a local giant actively involved with
community welfare in remote areas has also been a positive add on
for Engro Foods. Their direction for the brand (Olpers) is
considered one of the fastest growing FMCG brands in Pakistan. So,
they acknowledge consumers for improving their product.