CORPORATE PROFILE OF CDL CDL (Chaudhry Dairy Limited) is one of the reputable and renowned company in Pakistan. CDL was established in 1984 as a private limited company. The company came up with its first doing product “Haleeb Milk” and later on it continued to expand its product line. In 1988, CDL introduced “Haleeb Cream” which was not only launched directly for consumer market but also supplied to many ice cream factories where it was used as a core ingredient. The company has its head office in Lahore and a plant is located 65- km from Lahore in Bhai Pheru. The plant is equipped with latest equipment and technology, specialized workers scientists and professionals 1
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Marketing project on Candia milk Pakistan as a failed product
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CORPORATE PROFILE OF CDL
CDL (Chaudhry Dairy Limited) is one of the reputable and renowned
company in Pakistan. CDL was established in 1984 as a private limited
company. The company came up with its first doing product “Haleeb
Milk” and later on it continued to expand its product line. In 1988, CDL
introduced “Haleeb Cream” which was not only launched directly for
consumer market but also supplied to many ice cream factories where it
was used as a core ingredient. The company has its head office in Lahore
and a plant is located 65-km from Lahore in Bhai Pheru. The plant is
equipped with latest equipment and technology, specialized workers
scientists and professionals who assures quality at every level of
production process.
The dairy industry in Pakistan is very competitive. There are large
number of players including multinational and local companies which
potrays an oligoplistic market structure without product differentiation.
In such an cumulative and challenging marketing environment the
strategic management of CDL has been able to maintain its dominant
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image in the market. The company has already awarded ISO-9000 in
1997 for its strict quality control operational systems. Currently, the
plant is running with the capacity utilization rate of 90%.
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CORPORATE MISSION
CDL has the prime corporate mission of achieving and maintaining high
quality. But in broader term its mission statement states the following;
Providing nutrition’s and hygienically processed food products to
our customers at competitive price.
Enhancing our reputation for quality in all our operations.
Promoting mutual trust with customers, suppliers, employees and
shareholders.
Providing a safe and healthy environment to our community.
PRODUCT LINE
The product line of CDL includes the following products;
Haleeb standardized milk
Haleeb cream
Asli Desi Ghee
Candia milk
Skimz liquid skimmed milk
Skimz – skimmed milk powder
Candia drinking yogurt
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CANDIA MILK
Candia is a product of CDL which was launched first time on April 12,
1999. Candia is basically a French brand and it is processed and packed
under licensed by CDL. Candia is already a very popular brand in
Europe and other 52 countries.
Now it is available across Pakistan including all the major cities through
CDL distribution channels. It is very unique in its packing and features.
It is packed in plastic bottles of two different sizes, 0.5 litre and 1 litre.
The plastic it contains consists of three layers. The outer and inner layer
is white in color and compose of same formulation of high density
polyethylene. The middle layer is black in color which protects the milk
from heat and light. As far as the packaging is concern, Candia has no
competitor in local market.
CDL invested around 200 million rupees to launch Candia in Pakistan.
Out of which 10 – 15 million was only spent on the massive advertising
campaign carried out in world cup season at the time of launch.
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PROCESSING
The method of collection of milk for Candia is through the approved
suppliers who maintain cattle in accordance to the prescribed standards.
Then the milk is tested in laboratory by conducting 8 different tests. The
milk is received in the chiller containers and heated upto 8%. After that
the milk is transported to the factory for processing.
The processing of Candia milk undergoes through 6 different stages.
Firstly, fresh milk is pasteurized. Then it goes from the stage where it is
standardized and homogenized. After homogenization the milk is heated
at 140 oC, ultra high temperature (UHT) for about 4 seconds and then its
goes for aseptic packaging. After packaging milk is sterilized and send
to the channels of distribution. One bottle of Candia contains 3.5% of fat
and 8.9 SNF.
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MARKETING STRATEGIES UNDERTAKEN FOR LAUNCHING “CANDIA”
Marketing orientation strategy was adopted by CDL towards launching
Candia. In the marketing orientation stage company identify what
customers want and tailor all of the activities of the firm to satisfy those
needs as efficiently as possible.
Lease features of marketing orientation strategy adopted by CDL
includes:
The product launch was preceded by market research and need
identification.
Pull strategy was adopted because market potential was already
identified since UHT (Ultra High Temp) sales were increasing.
The product was made by keeping in view the customers need,
rather than producing it and then trying and push sales, as in a
selling strategy.
For the want satisfying ability of the product, the company specifically
aims at image utility which is the emotional or psychological value that a
person attached to the product or brand because of its reputation or
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social standing. However, the image utility of Candia varies
considerably depending on different consumer’s perception.
THE DYNAMIC MARKETING ENVIRONMENT FOR CANDIA
As we know that the successful marketing depends largely on company’s
ability to manage its marketing programs with in its environment. The
following macro and micro environmental factors played a considerable
role on CDL marketing opportunities and activities. The external macro
environmental factors which can influence on Candia’s sales are:
1. Demographics
Demographics refers to the characteristics of human population,
size, its distribution and growth. The total population of Pakistan
is 140 million and it is growing at the rate of 2.5%.
There is more potential for Candia’s sales because the population
growth rate is favorable and increasing.
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Changing gender roles is another demographic factor which refers
to the changing roles of males and females related to families,
buying patterns etc. The females in Pakistani society are now more
aware of brands. Their attitudes forward careers, shopping, and
products have entirely changed. If more and more women are
educated in the society. There is a likelihood that they become
more skeptical towards. Shopping especially for house hold items.
In addition to this more people are migrating from rural to urban
areas, which also favour Candia’s sales because Candia is not
much distributed in rural areas. Similarly the people’s attitude
towards fitness is perception gradually increasing which enhances
their to switch on milk consumption.
2. Economic Conditions
The following economic conditions which can effect the marketing
activities for Candia are:
Business Cycle
The business cycle consists of four stages, prosperity, recession,
depression and recovery. Currently, the overall business industry
in Pakistan is passing through a stage of recession but it is hoped
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that it will enter the recovery stage soon, which will be favorable
for company’s long term pricing objectives.
Inflation
When Candia was launched, the inflation rte in the country was,
6.5% officially as compared to the last years inflation rate of 8.3%.
Competition
As far as the battled milk is concerned Candia has no competition
in the local market. But as the core product is concerned, there is a
substitute threat. Many other companies including multinational
are also fulfilling the demand for UHT milk.
3. Socio / Culture Changes
Todays society is becoming more complex because our Socio
cultural patterns, life styles, values, beliefs are changing much
more quickly. Here are few changes in social and cultural forces
that have significant marketing implications for Candia.
Consumers awareness about UHT milk has increased so much as
result of massive advertising campaign carried out by Tetra Pak
association of Pakistan. People have changed their views about
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fresh milk. They feel that fresh dairy milk is impure and
unhygienic, and it contains bacterias which causes infectious
diseases. Moreover, there is a popular notion among the mass
consumers that dairy milk contains high percentage of water as
compared to milk itself, which is a routine practice being
undertaken by the “Ghawalas”. So mostly the consumers
especially in urban areas are switching towards tetra Pak UHT
milk which is more hygienic and durable in use.
4. Political / Legal Forces
The political and legal forces which effected CDL marketing
efforts for the launch of Candia were the environmental anti
pollution laws, according to which a company is prohibited to use
that plastic packaging which is not recyclable. Candia has a
special “USP” Packaging which is recyclable and environmental
friendly. Also the milk processing plant of Candia is located 65
kilometers out side the main city of Lahore near Bhai Pheru which
is a desirable step according to the requirements of the law to
avoid air pollution.
5. Technology
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Technological break through have a tremendous effect on the life
style, consumption patterns and behavior patterns of the people.
The technology introduced by CDL for Candia is plastic bottle
packaging which is also unique selling point because there is no
other local company providing such packaging. More over the
plastic which CDL is using is USP, packaging which is
internationally recognized frequently used by competing brands all
over the world.
communication of decision oriented information to be used in all phases
of the marketing process.
Candia also carried out a comprehensive marketing research program to
deal with the competitive pressure already exists in the market. The
sources of information used to conduct this market research includes the
following:
Internal company information
Dealers information
As regards the customers needs are concerned, both formal and informal
investigation methods were used. Regarding formal method, a
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comprehensive market survey was conducted in which people from
different walks of life were interviewed personally and their responses
were collectively evaluated.
Telephonic and direct mail survey systems were totally ignored to get
feed back of consumer’s response.
TARGET MARKET FOR CANDIA
The market is a group of customers (people or organizations) for whom a
seller designs a particular marketing mix. The primary market which
CDL targeted before launching was specifically urban sector. Their was
no ultimate consumer as no age limitations were specified for the
product.
CONSUMER MARKET SEGMENTATION
CDL divided the total market into smaller segments with a prospect to
enhance effective acceptance and sales of the Candia. The following
segmentation basis were applied.
1. Geographic Segmentation
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As concerns a geographic segmentation, CDL has segmented its
potential market in all the four provinces simultaneously which is
further subdivided in key business centers located in these areas.
As far as the residing areas are concern CDL has specifically
segment its market in the urban sector.
2. Demographic Segmentation
In terms of demographic segmentation, CDL has divided the
market. On the basis of income, family size and style:
The target consumers of Candia core high income people
with income regarding from Rs. 10,000 and above.
In terms of age, there is no segmentation undertaken by
CDL. As a product appeals all the age groups.
The segmentation basis by gender includes both male and
female for Candia’s target market.
On the basis of social class, Candia has segmented the
market considering only upper and upper middle class.
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Candia has also segmented the market on the basis of family
life cycle, with a distinction between single and married
class.
As regards education, there is not segmentation basis applies
as it appeals to bit of common sense.
3. Behavioral Segmentation
In terms of behavioral segmentation, CDL has divided the market
on the basis of benefit desires from the product and its usage rate.
As regards the benefits desired from the product, CDL has
segmented the market on the basis of quality and taste.
There is not segmentation basis undertaken by CDL as
regards the usage rate of the product, which ranges from non
user to heavy user.
BUSINESS MARKET SEGMENTATION
CDL has segmented the business market on the basis of customer
location and type. The Co has selected both single and multiple buying
sites.
As a segmentation basis by location
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The Avg. business order unprocessed milk is considerable large in
size therefore, the company has segmented. The order size on the
basis of sales volume.
The company orders the unprocessed milk from the unorganized
dairy industry.
Co’s can approach buy in different ways. Some companies have
their own purchasing department. In CDL, the decision of
purchase are normally undertaken by consulting all the purchase
staff members.
The purchase criteria is segmented strictly on the basis of quality.
TARGET MARKET STRATEGY
The target markets should be compatible with the organization’s goals
and image and also consistent with definition of strategic planning.
CDL has adopted market aggregation strategy as a single segment. The
strategy used can also be called mass market strategy.
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The management of CDL has developed on marketing mix and reach
most of the customer in the entire market. Candia is offered as a single
product for the mass audience. It has one pricing structure, one
distribution system and it uses single promotional program which also
aimed for the entire market.
.
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MARKETING MIX DESIGNED FOR CANDIA
CDL designed a complete marketing mix for Candia which includes it
price, promotion, placement and product management.
1. PRODUCT
A product may be a good, service, person or any idea. Candia is a
commodity which is offered to the consumers to fulfill their needs.
It is a processed milk which is treated with UHT technology. It is a
in liquid form, whit in color and packed in plastic bottles which
are available in two sizes.
Core Part
The core part of Candia milk is that, it is a complete food
supplement which includes all the vitamins, proteins and lactic
acid, which are needed for good health and vitality.
Classification
Candia milk is classified as a “Convenience Good” because
consumer can buy it any time with a minimum effort. The category
in which Candia falls in the “Replacement Product” because it is
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significantly different from the Tetra Pak milk already available in
the market. Candia is the only milk which is sterilized after
packing.
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2. BUSINESS ANALYSIS
In business analysis, CDL had gone into the details of terms and
conditions of franchising. After one year negotiations, CDL was
permitted to produce Candia in Pakistan as a subsidiary company
of French Candia. The finances were arranged and the feasibility
reports were made which estimated the cost of the whole project
including manufacturing plant, patent, distributions etc. So the
whole program to develop the product in home country was
designed and analyzed.
3. MARKET TESTS
Ad discussed in the earlier part of the report market tests for
Candia milk were being carried out in Lahore do test whether
people will actually going to buy it or not. In these tests, sale and
repeat buying behavior of the consumers was monitored.
4. COMMERCIALIZATION
After having the successful results of test marketing, CDL finally
decided to start full scale production and developing market plans
for Candia. Candia was produced and first launched on 12 th April
1999 with a massive advertising campaign.
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POSITIONING OF CANDIA
. The positioning strategy chosen for Candia milk was
“Positioning is relative to a product class or attribute”. The attribute on
which CDL has positioned Candia “taste’. Candia has a very different
taste among all the available branches in the market, that is whey it is
primarily positioned on its distinctive taste is the result of the process of
“sterilization”.
PRODUCT LIFE CYCLE
Management of CDL is aware of the fact that every product has its own
life cycle and product is to be treated accordingly, depending on the
particular life cycle stage. The product life cycle goes through four
different stages. There are introduction stage, growth stage, maturity
stage and decline stage.
Candia was introduced 8 months back. It has successfully crossed its
introduction stage and according to the management of CDL, Candia has
now entered into growth stage where it experiences the target of market
acceptance, higher sales and higher profits. The company is managing
the growth stage by using the strategy of market penetration.
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BRANDING OF PACKAGING STRATEGIES
Branding and packaging are the two actual parts of the product. Brand
name identifies the product,, it makes shopping easier and ensure the
quality to differentiate the product from competitors. The brand name of
the product here is “Candia”. It is the separate name used for the product
without using the corporate name which is CDL. Although the branding
is under corporate name (CDL) but CDL is not used combined with
brand name. Among the five levels of brand familiarity, Candia is at the
“Brand Recognition” level. People recognizes the brand and every body
knows about its existence.
As far as the packaging is concerned, CDL is following “family
packaging strategy’, in which the bottles of Candia are placed in one
container. Packaging includes all the details about the product. In
Candia’s case, the primary packaging is the plastic bottle of white color
with a lid on its opening. This primary packaging is used to protect the
milk from heat and light. This plastic bottle is the USP Packaging which
is save and environmental friendly. The secondary packaging for Candia
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consists of 12 bottle pack which is wrapped in a card board box covered
with plastic sheet.
LABELING
Labeling consists of all the information about brand, brand mark, name
of company ingredients, expiry date an instructions. Labeling is
considered as a part of packaging to give full details regarding the
product. Labeling of Candia includes a picture which shows, a morning
time at a form and “milk” in written also in a very attractive manner.
PRICING STRATEGIES AND OBJECTIVES
The pricing objective which CDL selected for Candia was purely “profit
oriented”. And the rationale was to achieve the target return. The target
return could be away specified percentage return on the sales on Candia
milk. The company has concealed all its profit and sales figures because
it is a private limited company and do not disclose its annual reports to