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.