Engro Foods Industry Report 1

8/6/2019 Engro Foods Industry Report 1

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ENGRO FOODS INDUSTRY

Engro Foods (Pvt.) Limited (EFL) was been established in 2005 as part of a

diversification process at the Engro Group. ENGRO wanted to setup a new

fertilization plant but due to certain constraints from the government wasnt able to

do so. Therefore, the organization decided to move into a new market. They came

up with several options including telecommunications and power plant but they

found out that the food industry held the greatest promise. Engro Foods has already

set up two processing plants at Sukkur and Sahiwal.

Engro Foods entered the Food business through milk processing and sale with the

companys vision to pursue growth opportunities based on country fundamentals

and own strength. It also positions the company to leverage its corporate social

responsibility initiatives and work closely with rural communities to promote

integrated farming and livestock development. This effort is expected to play a

pivotal role in poverty alleviation and improving livelihoods of the poor in the milk

collection areas.

Olpers Milk, Companys first brand was launched in March 2006 in 20 cities of

the country simultaneously.


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OLPERS MILK

The milk sector in Pakistan is Huge and that is putting it lightly. According to

SMEDA we produce about 28 billion liters a year and Packaged Milk is just a dent

on this number. 92% to 93% of milk is open milk. Because of various socio

economic factors Packaged Milk is still not that popular here. It is the potential to

see a need in the market and the drive to turn that need into profit that defines the

success of a Good Business and Olpers saw that need.

Before them there was Nestle MILKPAK, which was the king of the castle and

Haleeb who was happy to be second best. Businesses sometimes forget and

become too comfortable with given scenarios, they forget strategic vision andanalyzing the market and that is exactly what happened. Companies sometimes

become used to their situation they develop what this writer would put as couch

potato syndrome. A simple example of this would be a household scenario where

the wife is shouting at the husband that you need to mow the lawn and the husband

is all comfy on a couch saying ILL DO IT TOMORROW!

Olpers with huge financials behind them (thanks to ENGRO Foods) came in and

mowed that grass from under the feet of Nestle and Haleeb. In doing so they did

something else that was wonderful; they enticed, they invigorated and delighted

their customers into becoming more health conscious and purchase savvy.

Olpers swept the rug right out from under Haleebs feet and they lost their market


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share and their place as second best. It was an all out war of the worlds and Olpers

came prepared. A barrage of line extensions and big budget spending saw them

become one of the most recognizable brands in Pakistan, and that too in just two

years. Their presence was everywhere on shelves, on billboards you name it!

Olpers was everywhere!

Marketing research

Before the inception of the brand Olpers, AC. Neilson carried out a marketing

research for Engro Foods to determine the viability of the brand name Olpers and

the market readiness through surveys, interviews and focus groups.1200 names

were reviewed and analyzed before Olpers was decided. Olpers is promoted as

the milk for all-purposes. The reason for this is that while conducting research,

they found out that people want milk that could be used for all purposes such as

drinking, tea whiteners etc.

Once the brand was introduced the organization wanted to add more product lines

to it. Therefore they conducted another marketing research to find out the success

of Olpers. The researchers started off with secondary data that was available.

They tried to uncover the level of complexity involved in such a decision and the

magnitude of success. But that wasnt enough so they started to collect primary

data through the use of different techniques.

They first started with survey research to understand the peoples beliefs,

preferences and core needs that can be satisfied by introducing additional products.

The researchers also conducted observational research to observe the people in

different settings. They used it to find out which brand the people really bought,

where did they take more time in purchase process and where did they look when

they were shopping for grocery. This helped them to see the shelf-space that can be


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used. They used the method of shadowing that is they observed people while using

the product. They also conducted unfocused groups where they interviewed a

diverse set of people to explore ideas about the brand and what more they want in

the food sector to be available to people.

The researchers conducted questionnaires to find the responses of consumers about

Olpers. They got a positive feedback from the customers who also encouraged

them to invest further and to setup a new plant in Sahiwal. Through different

research methods the organization was also able to find out the number of

competitors brands.

After the analysis of data researchers present the findings to the decision makers

who pass the final verdict. Due to the positive responses of consumers, the decision

makers decided to go ahead with the idea of introducing more product lines to the

food Olpers brand.

It can be said that successful marketing research helps the marketers to understand

the costumers needs that are still unfulfilled. The four new products of Olpers in

the market are..................Olwell diet milk

Olpers cream

Tarang

Omore

Olpers milk

The organization has further plans to expand more in this sector and introduce

more products related to milk.


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SEGMENTING AND TARGETING THE MARKET FOR

OLPERS Milk

The milk sector shows a market that has homogeneous preferences that is the

consumers have similar preferences.

They want milk to be clear and free from any impurities.

It should be carefully processed

It should be 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 themarket for their products.

Demographic Segmentation

Olpers products are not bounded to any particular age, gender or lifecycle stage.

The brand is meant for all the users in 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.


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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 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 variety seekers

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

from drinking to tea whiteners as well to feed the animals. The ads also show thatconsumers should 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.


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jo dil khol kay jeetey hain unheen kay liyay hai Olpers

PLACEMENT AND DISTRIBUTION

According to Mr. Ali Akbar, Director Marketing EFL,

In order to succeed, you should always capitalize on your strengths and never on

your competitors weaknesses

Engro Foods 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. Engro Foods Limited has its own distribution network. EFL

has divided Pakistan into five regions for milk distribution namely:

y Karachi


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y Lahore

y Islamabad

y Peshawar

y Multan

Due to an appealing color scheme, which stands out in the clutter and thanks to the

EFLs strong relationship building and special discounts to retail outlets, Olpers

has gained a proper shelf placement in the presence of competitors like Nestle and

Haleeb.

PROMOTION AND ADVERTISING

Promotional strategy

Olpers have used several promotional strategies like.

Stalls in BAZAAR

The company also introducing stalls in Sunday Bazaar, Tuesday Bazaar and Friday

Bazaar at different location of pakistan and especially to those areas where the

sales volume of the Olpers would be low in order to encourage the consumer.


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Integrated marketing communication:

Company have a complete imc plan in which they that how can the company will

inform their consumer about the new, upcoming product and value added services

to the existing product. The sources which can use by the company to inform their

consumers are print, electronic as well as through their websites.

Unique selling proposition:

Olpers is a trend setter in market.The usp of Olpers is wo log jo khul k jete hai.

They provided their consumer pure milk and this the usp of nestle milkpak.

Advertisements

Olpers launch was, perhaps one of the most aggressive as far as processed liquid

milk (PLM) is concerned, with TVCs, print ads, radio commercials, billboards and

plenty of BTL (below theline) activities including direct consumer and shop

branding activities. Due to this aggressive marketing campaign, the competition

seems to be getting tougher. This can be gauged from the fact that Nestle re-

launched its product packaging and marketing campaign just before Olpers

launch.


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96%

7%

38%

15% 15%

6%12%

0%

0%

20%

30%

40%

50%60%

70%

80%

90%

00%

T.V. Radio Billboards Posters New s paper Peer group Float Vehicles

Medium of Advertising


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Ramadan Campaign

Olpers always had a unique campaign; and it has been 3 years since Olpers

celebrates the spirit of Ramadan. Olpers advert launched in Ramadan 2009 is the

latest example for it. This Ramadan they have has come up with another nice

promotional campaign. They are promoting the Muslim patriotic spirit all around

the world through the most popular Hum Mustafavi Hein song and a message of

Peace for the whole world. The advert features Atif Aslam and DawoodAli. It is

directed by Asim Raza and he has worked fabulously. This ad has been shot in

5different countries I-e Pakistan, Dubai, Morocco, Brunei and Turkey. They have

shown the Muslim rich culture, heritage and beautiful mosques.

Olpers association with religion and cultural heritage grows stronger each Ramzan

as their worth talking about Ramzan Campaign penetrates through the industry

setting a bench mark of gleeful trail for competitors to witness. Their rich hues of

corporate colour and emphasis on cultures across the globe give more meaning and

depth to the brand as a whole. What we see today is a great project execution by

TNBT (The Next Big Thing) to take the Olper's digital campaign to the next level

by going beyond traditional online banners and simple Facebook page

management.

Such unique advertising makes Olpers stand out from the rest of the competition


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thus making it the market challenger in this regard while there seems to be no

direct response or competing campaigns from other brands in the industry of

similar quality. The religious festivities and cultural aspect highlighted generate a

brand rub in terms of the portrayed attributes which eventually have become a

basis of Olpers positioning and therefore much appreciated by consumers.

Therefore, the brand has been very successful in showing Islamic nations as a

united faction where religion builds a strong bond of togetherness and family

values which are significantly highlighted. Their user friendly website opens up

unfurling the corporate colours and takes the user for a journey of engaging

features and advertisement downloads that could be cherished as collectibles.

Similarly, the display of Sehri and Iftar timings and the integration of digital and


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traditional media are worth noticing where Olpers has linked recipes on a local

TV channel and the brand enjoys good product placement.

This Islamic theme integrate in Olpers Ramzan campaign and the digitalized

aspect in its entirety have made the viral impact and positive word of mouth

inevitable and thus more of related campaigns are expected in years to come.

Recently, there has been a growing trend of targeting Muslim consumers around

the globe where brands focus on manufacturing and marketing Halal food and thus

there is a huge Muslim market being talked about these days and how brands are

playing their part in benefitting from it, Islamic Marketing is the term in use and

thus relevant activities increase for this particular month. NewYork Times in its

section Media and Advertising has highlighted various international brands

focusing on the Muslim market and mentioned how Olpers has been doing its

part in terms of Ramzan and how it helps in competing against Nestle.


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COMPETITORS

When Engro Foods launched Olpers Packaged Milk in 2006, many in Pakistans

food and beverage industry thought the brand would flounder and ultimately fail,

being unable to challenge established category leaders.

The milk sector in Pakistan is Huge and that is putting it lightly. According to

SMEDA we produce about 28 billion liters a year and Packaged Milk is just a dent

on this number. 92% to93% of milk is open milk. Because of various socio

economic factors Packaged Milk is still not that popular here. There is only 4%

penetration of packaged milk in the market.Nestle Milkpak is the king of the market having 40% market share. Haleeb was

second in place.Olpers swept the rug right out from under Haleebs feet and they

lost their market share and their place as second best. Now Olpers market share is

22%.

Engro Foods Industry Report 1

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