Marketing of Olper’s milk and Nestle Milkpak

Submitted by:Khadija Haider 210Seemab Shoaib 131

ContentsEngro Foods’ HistoryVision and Core ValuesSegmenting and TargetingPositioning the brandSWOT AnalysisPEST Analysis4 P’sComparison with Nestle Milkpak

Engro Foods’ History•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 wasn’t able to do so. Therefore, the organization decided to move into a new market.•Olper’s Milk, company’s first brand was launched in March 2006 in 20 cities of the country simultaneously

“Our vision is to become a fast expanding mega foods company. To achieve our vision, the company will initially focus on dairy by investing a substantial amount in plant, milk collection capability and marketing. We are making concrete efforts to expand in and beyond Pakistan; through strategic international alliances, to eventually become global."

Vision

Core Values

•Leadership• Innovation• Diversity and International Focus• Quality and continuous Improvement• Candid and Open Competition• Individual growth and development• Enthusiastic pursuit of profit• Ethics and integrity• Safety, Health and Environment

Segmenting and Targeting

The milk sector shows a market that has homogeneous preferences that is the consumers have similar preferences.• They want milk to be white.• It should be carefully processed• It should be good for health and bones.

•Demographic SegmentationOlper’s 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. • Psychographic SegmentationOlper’s 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.• Behavioral SegmentationOlper’s products have been segmented on the basis of benefits that consumers seek in the milk. People look for a brand that can be used for all purposes from drinking to, tea whiteners as well to feed the animals.

Positioning the brand

•Packaging of Olper’s Products color are quite different and distinctive .• The brand has been positioned as an all purpose milk especially those who live life to the fullest, hence its tag line, “jo dil khol kay jeetey hain unheen kay liyay hai Olper’s”• They used the benefit positioning for Olwell. • Olpers’s cream is positioned as good for a specific use or application.

SWOT Analysis

Strengths•Engro’s back• Positive relations with farmers.• Positive response from customers.• Strong customer or product research.• Third generation plant.

• Weaknesses•Olwell TVC.• Packaging.• Low quality milk.• Milk collection and distribution costs.

Threats•Competition• Perceptions and price differentials.

Opportunities•Increased government funding.• Increased consumption of processed milk.• Awareness.• Third largest producer of milk.

PEST Analysis

Economic Factors• Inflation Rate• Competition is increasing with the entrance of new domestic players• Major textiles groups are also diversifying into dairy and livestock business.

Political Factorsunstable political conditions strikes and road blocking creates problem for delivery on time

Technological Factors

 • Milk yields per animal have been increased through scientific feeding & breeding.• In year 2005, the Ministry of Industries and Production established Dairy Pakistan Company on the lines and model of Dairy Australia.

Socio-Cultural Factors

• The perception that only loose milk is fresh. There is only 4% penetration of packaged milk.

Products

Olper’s Milk

• Launched on 20 March 2006.• UHT (Ultra heat treated) milk with 3.5 % fat and 8.9 % solid non-fats.• available in easy-to-open, 6-layered Tetra Pak Brick Aseptic red packaging.• 3 months shelf life.

Placement and Distribution

• Engro Foods Limited has its own distribution network. EFL has divided Pakistan into five regions for milk distribution namely: Karachi, Lahore, Islamabad, Peshawar and Multan. • Due to an appealing color scheme, which stands out in the clutter and thanks to the EFL’s strong relationship building and special discounts to retail outlets, Olper’s has gained a proper shelf placement in the presence of competitors like Nestle and Haleeb .

Price

EFL is pursuing the competitive pricing strategy for its products. In competitive pricing the price of the product is determined considering the price of major competitors like Nestle, Haleeb etc.

Promotion and Advertisement

•aggressive marketing campaign.• TVCs, print ads, radio commercials, billboards and plenty of BTL (below the line) activities including direct consumer and shop branding activities.

Ramadan Campaign

TVC’S

Competitors

• Nestle Milkpak• Haleeb

40%

22%

38%MILK PACK

OLPERS

OTHER

Brief History Nestle Milkpak was first introduced in the

market in 1981 and originated the packaged milk category by which they pioneered Tetra pack milk in Pakistan. However Milkpak’s “Milk packs” were very well received and the brand soon received and the brand soon became synonymous with quality milk. Its first real competition came in the form of Haleeb.

Marketing StrategiesNestle is pursuing growth strategy. They have invested $10 billion at Kabirwala Plant and they are planning to invest $38 billion in the milk business.

Segmentation and TargetingSegmentation

Geographical Target Market is

major populated cities of Pakistan

Demographic for the users in

higher upper or middle class families

Targeting Urban areas of the

country. Upper and Middle

Income Class

Positioning and Differentiation Positioning

Nestle Milkpak has adopted the functional positioning strategy like:

“Khalis He Sub Kuch Hai”“Wohi Qudarti Maza”

“Jaan Banao”

Differentiation

“Addition of IRON and Vitamin A and C”

StrengthsStrong brand image. Quality Product Solid financial position. Conduct more training programs. Try to collect fresh and clean milk. Make shops for farmers. Strong supply chain networks. Qualified workforce. Commitment to high quality Focus on research and development

Weaknesses Does not give milk on credit. Spend less on advertising. High price.

Opportunities World’s 3th largest industry. Introduce value- added products. Innovations in product development, packaging and presentation. Opportunities for investors to invest in Pakistan. Increasing employment for the people.

Threats Low quality milk Poor profitability for farmers. Lack of contacts for farmers to market mechanism. Lack of education among the farmers. Difficult to meet future consumer demand. Load shedding.

Political FactorsThe company policies are affected and its budget is also affected. Nestle paid

15% sales tax ad 18% excise duty when they

import chillers from other countries.

Economic FactorsThey earn lot of profit and

uses its profit in social welfare through making

schools etc. They also give job opportunities to the

people of rural areas through giving them animals on

interest free installments.

Social FactorsPeople mostly prefer fresh and open milk and rely less on processing milk because

they think that milk companies add chemicals

in milk during process.

Technological FactorsTechnological variables

have positive effect on the business. Nestle uses

latest technology and high quality machinery in the

production of milk.

PEST

Product Quality product Product style and logo Product life cycle.

PriceCompetition based

pricing

Placement and distributionMilkpak is not sold directly to consumers. It uses indirect channel s for distribution.Color of the brand is green and white, which are the colors of Pakistan’s flag.

PromotionAdvertisementPublic relations

Nestle has been ruling the milk industry for nearly 2 decades. It was not spending much on advertisement and promotional programs. Nestle Milkpak had been like a sleeping giant. Evidently Olper’s has woken up the competition. Milkpak has responded with campaigns of its own to reaffirm the positive equity of its brand,

Branding experts could not imagine how Olper’s could

distance itself from its parent company’s incredibly

unappetizing, chemical-laden, and non-edible roots. Yet, by the end of

2008 the brand has a market share of close to 22% second only

to milkpak(40%).

Recommendations for Olper’s and Milkpak

•The immense competition is going in the market so Nestle Milkpak should penetrate more and more in the market.• Only 4 % milk is being processed and 96% people are using loose milk so Nestle Milkpak has the opportunity to capture a large share of the market through more creative advertising and other promotional activities.•Nestle Milkpak should invest more on research and development because customers using loose milk are getting a lot of contaminations especially in urban areas so Nestle Milkpak can provide awareness to people in this aspect.

•Olwell's advertising must conform to local values. •PR Activities; mother’s day special sponsorships.•Advertising at the right place; Olwell’s TVC can run during yoga shows in the morning. • Offer discounts in Ramadan.

Thank you