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This report is about the marketing of Olper¶s and Nestle Milkpak. We start by giving a brief
history about Olper¶s and how it came into existence. Then we talk about its vision, core values
and its marketing department. We discuss the research conducted by the company before
introducing it to the market and how they have segmented its target market and positioned the
product in the minds of the consumers. We then discuss the SWOT and PEST analysis. Then we
discuss the 4 P¶s of Olper¶s milk. Two products are then discussed of Olper¶s. Nestle Milkpak is
then discussed starting from its history. We discuss its segmentation, targeting, positioning,
differentiation. SWOT analysis, PEST analysis, 4 P¶s. Then we discussed how the introduction
of Olper¶s as has affected the Milk industry. Recommendations are given in the end for both
Olper¶s and Nestle Milkpak.

 

 
 
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. 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 company¶s
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.

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."

 
 
  

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—.VLeadership
2.VInnovation
3.VQuality and continuous Improvement
4.VCandid and open communications
5.VIndividual growth and development
6.VEnthusiastic pursuit of profit
7.VEthics and integrity
8.VSafety, Health and Environment

 
 
  

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Consisting of leading marketing professionals of the industry, who are graduates of top business
schools of Pakistan, the Marketing Department ensures that from product need identification to
product development, launch and post-launch, all strategic decisions are made based on authentic
information and research. Identifying the target markets, effectively communicating to them and
building the image of the brands as well as the Companies, is the job of the professionals running
the marketing at Engro Foods.

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Before the inception of the brand Olper¶s, AC. Neilson carried out a marketing research for
Engro Foods to determine the viability of the brand name Olper¶s¶ and the market readiness
through surveys, interviews and focus groups. —200 names were reviewed and analyzed before
Olper¶s was decided. Olper¶s 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 Olper¶s. 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 wasn¶t enough so
they started to collect primary data through the use of different techniques. The first started with
survey research to understand the people¶s 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 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 Olper¶s.
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 loyal 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 Olper¶s brand.

 
 
  

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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 Olper¶s in the market are
Olwell diet milk, Olper¶s cream, Tarang and Omore. The organization has further plans to
expand more in this sector and introduce more products related to milk.


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The milk sector shows a market that has homogeneous preferences that is the consumers have
similar preferences.

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

RV It should be carefully processed
RV It should be good for health and bones.

Keeping these things in mind, Olper¶s market has been segmented. The marketers at Olper¶s
have had a number of options available to them when segmenting the market for their products.


  

Olper¶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. Even though the brand calls for a
small percentage of an individual¶s income but lower class wouldn¶t 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 Olper¶s has been positioned as a brand for high income earners. Due to the
income factor involved it can be said that Olper¶s milk target a specific social class who are
health conscious and concerned about their weight.

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On the basis of psychographics, factors such as personality traits, lifestyles and values, the
marketers at Olper¶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. 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 Olper¶s 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. Olper¶s ads also target believers,
traditional conservative people with concrete beliefs. The ads for Olper¶s show the beliefs of
healthy life with processed milk and plays on the emotional aspect more.

 
 
  

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Olper¶s 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 that consumers should increase their
milk consumption for example with every tea they should use Olper¶s, every morning they
should drink Olper¶s and everyday they should feed their pets with Olper¶s milk.


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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 Olper¶s 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:

RV Packaging of Olper¶s Milk and Olwell in red color and Olper¶s cream packed in purple
color are quite different and distinctive from the typical green and blue packing used by
other competitors.
RV The brand has been positioned as an all purpose milk that is meant for everyone,
especially those who live life to the fullest, hence its tag line, ³jo dil khol kay jeetey hain
unheen kay liyay hai Olper¶s´

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RV They have used the attribute positioning for Olper¶s milk. The main theme of the product
is that it is meant for purposes without any user imagery. Olper¶s ad also show attributes
of milk such as good for health.
RV They used the benefit positioning for Olwell. The product is positioned as delivering the
benefit of helping to reduce weight and for healthy bones.
RV Olper¶s 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 good.

 
 
  

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Olper¶s is a brand of ENGRO foods. This means that consumers can relate their former image of
ENGRO foods to Olper¶s. 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 Olper¶s 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.

ENGRO foods can easily afford research and development costs for Olper¶s have in order to
introduce new products. It can also distribute the brand through better channels because of its
long term relationship with distributors in the agriculture sector.

RV , (!
ENGRO has been interacting with the farmers for fertilizers and has gained quite a good
reputation over the years. It has led to a strong bond and long term relationship with the farmers
who are willing to supply milk to the company. This is an added advantage and strength for the

 
 
  

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company because it will never be short of milk production. The farmers also won¶t have to look
elsewhere to sell their milk.

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In first year, EFL crossed —.4 billion sales figure which shows customers¶ satisfaction upon
EFL¶s products.

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Olper¶s done a strong consumer & product research before and after launching the product. This
has provided them the perfect launching pad to eventually emerge as a global player in the food
industry. To develop its future portfolios, EFL has hired various global research partners like AC
Nielsen, Mindshare, JWT Asiatic and MARS marketing and advertising agencies.

RV ' $
EFL only, has the third-generation UHT milk plant in the country. EFL plant is the only plant in
Pakistan that uses Bactofuge technology to virtually eliminate bacteria and ensure premium
quality and hygiene. Moreover, it is also setting up another milk processing plant in Central
Punjab (Sahiwal) with an investment of Rs. 2 billion (US $ 33 million).

*%!!!

RV $,$$
Olwell ad which is based on Western life style, ENGRO foods brand management showed a man
who put off his clothes & remain just in his undergarments, or half nude lady in a cat walk or
men admiring the figures of a lady in mix gender health club.

In this ad they are creating associations with the brand through the stripes, which is a highlight of
Olwell packaging. Half naked people have been shown with tattoos of the same stripes in order
to show that they are loyal consumers of Olwell. Also, the talent, situations and locations
connects well with the ad to give Olwell a premium positioning.

The brilliant marketing people at ENGRO Foods failed to analyze is that the market they are
targeted the ad on, is Pakistan, where practicing Muslims reside, who have strong religious
beliefs. When making the ad, the brand managers were focused on, making an ad that should
give the brand the most premium look and feel amongst the target consumers but on the other
hand they were least bothered about the ethics, religious beliefs and cultural values.

 
 
  

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EFL is dependent upon Tetra Pak for the packaging of its entire dairy products. Tetra Pak is the
only option available to Olper¶s 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 would increase
the production cost.

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EFL is dependent upon Tetra Pak for the packaging of its entire dairy products. Tetra Pak is the
only option available to Olper¶s 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.

RV c$%$$ ''! +& ! !

EFL¶s 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.

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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.

RV !'!& (!!'2&'c$%

 
 
   

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Competition may create opportunities for the company because each competitor in the milk
industry wants to increase penetration of processed liquid milk and so they will create awareness
for consumers through different advertising media. This will ensure the increase in the
consumption of processed milk instead of lose milk and so will in turn lead to increase in sales
for the company. Therefore there will be an opportunity for accelerated growth.

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Growing dissatisfaction with loose milk and increasing awareness about health and hygiene
issues have led to increased processed milk consumption.

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Pakistan is the Third largest producer of milk in the world with a total production of 32 billion
liter of milk a year, whose value is more than that of the combined value of wheat and cotton,
from a total herd size of 50 million milch animals (buffaloes and cows). Livestock accounts for
46.8 percent of agricultural value added and about —0.8 percent of the GDP. Milk is the largest
commodity from the livestock sector accounting for 5— percent of the total value of the sector.
Due to the steps taken by the government and private sector, country¶s 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.

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Competition may pose a threat because the company will have to maintain its leadership in an
expanding market so that it doesn¶t lose its market share to its competitors. For Olper¶s 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.

RV  !'(( $!

Consumers¶ perceptions and price differentials can cause a threat for the company. It is
important that Olper¶s comes up to the expectations of the customers and fulfills its conformance
quality that is the company meets its promised specifications.

Consumer¶s preferences change with time and prices might create certain barriers in terms of the
profit margins for Olper¶s. For example, lose milk is still cheaper than packaged milk and that is
also one factor that people still prefer to buy lose milk.

 
 
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Inflation rate of Pakistan for the current fiscal year has grown to 7 percent. This thing is really
hurting the purchasing power of Pakistani consumers. PLM which is already considered as more
costly compared to open milk is becoming out of reach of general public. As a result, there is an
increased pressure on PLM companies to either decrease their prices or at least keep prices
stable. Moreover, packaged milk industry which each year pays millions of taxes is not being
given any relief in terms of taxes by the government.

Competition is also increasing with the entrance of new domestic players in the dairy and food
sector and plans to increase investments by the already established companies. Nirala, good milk,
Pakola are the few names which have recently introduced their dairy product lines in the market.
Major textile groups are also diversifying into dairy and livestock business and some of them
have even acquired lands to start their business. Leading industrial groups such as Jamal Din
Wali Sugar Mills, Dewan Group of Industries and Shakar Ganj Sugar Mills have already made
substantial investments in dairy & livestock sectors. In March this year, Nestle Pakistan opened a
state-of-the-art milk processing facility in Kabirwala, Punjab. The plant, Nestlé¶s largest milk
reception facility in the world has a processing capacity of 2 million liters of milk per day.

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In order to make a noticeable increase in penetration, many challenges and perceptions still have
to be overcome by the PLMCs.

The least important one, perhaps, is tradition. Milk, even amongst the most urbanized consumers,
is synonymous with the early arrival of the ÔooÔ
ala (milkman) at their home on his trusty
bicycle (now replaced by a motorbike), reinforcing the impression that the milk is fresh, natural
and straight from the cow. And it is this perception that only loose milk is fresh, and therefore
healthy and preservative-free, that has to be overcome, if increased penetration is to occur at a
substantial rate.

Over the years, all PLMCs, but especially the two older players, Nestle and Haleeb, as well as
Tetra Pak (the company that packages the processed milk) have been making active efforts to
convince loose milk users to switch to processed milk. In the last six years, Tetra Pak has
launched three major campaigns aimed at changing consumer perceptions. Last year, Tetra Pak¶s
third campaign, Wo  D ooÔ Aur Kya? (Milk, what else?), addressed the misconception that
processed that packaged milk has preservatives. The campaign talked about the benefits of Tetra
Pak¶s six-layered packaging material and innovative technology that keeps milk safe for a long
time. The highlight of the campaign was the introduction of a buffalo character called, Moomoo,
who explained why UHT milk stays safe and hygiene for a long time in a Tetra Pak carton.

 
 
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Despite these marketing endeavors, perceptions cannot change overnight; this requires patience
and continuous investment to educate consumers on the benefits of packaged milk. Every
product¶s lifecycle consists of an introductory phase, growth phase and maturity phase. It takes
time to change attitudes, especially in a culture where the concept of fresh milk is healthier
option. Another hurdle in converting loose milk users to processed liquid milk is price. In
Punjab, because most dairy farms are based there, loose milk is cheap at approximately Rs 20 per
liter, while processed milk is priced at approximately Rs 38 per liter. In Sindh, however, the
price differential between loose (Rs 28) and processed milk (Rs 38) is only Rs —0. As a result of
price considerations, most PLMCs have not increased prices in the last 5 years. Moreover, Nestle
and Haleeb have introduced smaller packages to cater to consumers with limited cash flows,
although there is a convenience factor at play here as well.

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RV 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. The main objectives of the company are as under:

RV To promote milk and other value added dairy products in the domestic as well as
international markets.
RV To promote development and up-gradation of dairy supply chain in Pakistan by
supporting and facilitating the farmers, processors and other stakeholders across
RV To support dairy sector growth by way of supporting and facilitating business
development services for the enterprises across the dairy value chain.
RV To initiate and support interventions across the dairy value chain to enhance sector
competitiveness through innovations and research.
RV To promote technology development, transfer, assimilation, streamlining, acquiring
and/or up-gradation across dairy value chain by undertaking new initiatives.
RV To help introduce international best management practices for better productivity and
operational efficiencies.
RV To promote training and skills development of human resources associated with the dairy
sector.







 
 
  

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Launched on 20 March 2006, Olper¶s milk is EFL¶s standardized and homogenized pure UHT
(Ultra heat treated) milk with 3.5 % fat and 8.9 % solid non-fats. It is EFL¶s premier brand, and
the choice of quality-conscious consumers who only go for the best. It is available in easy-to-
open, 6-layered Tetra Pak Brick Aseptic red packaging and comes with a 3 months shelf life.

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According to Mr. Ali Akbar, Director Marketing EFL, ³In order to succeed, you should
ALWAYS capitalize on your STRENGHTS and NEVER on your COMPETITOR¶S
WEAKNESS!´

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 Olper¶s is available in 80 cities across Pakistan. It reflects the company¶s 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: 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 .


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.

 
 
  

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Olper¶s 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 the
line) 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 Olper¶s
launch. One can also a far greater number of milk advertising billboards in Multan city than seen
earlier like of Nirala, good milk and Nestle.

'
Olper¶s always had a unique campaign; and it has been 3 years since Olper¶s celebrates the spirit
of Ramadan. Olper¶s 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 ³Hum Mustafavi Hein´
song and a message of Peace for the whole world. The advert features Atif Aslam and Dawood
Ali. It is directed by Asim Raza and he has worked fabulously. This ad has been shot in 5
different countries I-e Pakistan, Dubai, Morocco, Brunei and Turkey. They have shown the
Muslim rich culture, heritage and beautiful mosques.


 
 
  
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Engro foods have 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. Omore
has initiated heavy marketing campaign.

By the end of March, every eye of Lahore was attracted towards the catchy decoration of Lahore
done by Omore. Other then the colorful advertising streamers, they had sponsored PHA in
decorating Lahore with artificial and colorful flowers etc. Clearly, as they boasted off, Lahore
really seemed to be in bloom. Believing in the fact that a marketer believes that advertisement is
not an expense, it¶s an investment, and they have invested a lot.
Their advertising campaign includes:
—.V Streamers
2.V Decoration of City in collaboration with PHA
3.V TV Ads
4.V Sponsoring cooking shows
5.V TV Bloopers, Art of Happiness
6.V Search planes Confetti

They had placed their streamers across Lahore and other cities. The city of Lahore was decorated
with artificial flowers and decoration material. Their TV ad is consisted on a cool, attractive and
catchy jingle which is sung by everyone these days.

 
 
  

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Launched on December —5, 2006, Olwell is a low-fat, high-calcium milk with the richness of
pure milk. It is an ideal choice for weight-watchers and heart patients. It is also high in calcium
content, which prevents osteoporosis. Packed in 6-layered Tetra Pak Brick Aseptic red packaging
with easy-to-open plastic cap, it comes with a 3 months shelf life.

The brand is positioned rather too narrowly towards SEC A. Nestlé¶s NesVita and Calcilock
campaign was closer to a normal Pakistani consumer. Secondly, there are certain boundaries and
cultural values that should be respected. Olwell ad is too much for me to digest and I have no
options but to switch the channel. Engro has over done it and to make things worse it¶s not as
clear and well communicated as NesVita was.


 
 
  
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When Engro Foods launched Olper¶s Packaged Milk in 2006, many in Pakistan¶s 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% to
93% 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.
Olper¶s swept the rug right out from under Haleeb¶s feet and they lost their market share and
their place as second best. Now Olper¶s market share is 22%.

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Milkpak was first introduced in the market by Milkpak Ltd. In —98— and originated the packaged
milk category by which they 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 to prolong the milk¶s quality.

It was a simple solution, but difficult in practice: importing the stainless steel chilled containers
required was prohibitively expensive. By —988, the company purchased —20 tons of milk a day
from 26,000 farmers.

However Milkpak¶s ³Milk Packs´ were very well-received and the brand soon became
synonymous with quality milk. Its first real competition came in the form of Haleeb, which
introduced distinctively blue tetra packs to the market in —986.

Then in —988, Switzerland-based Nestlé SA, acquired a share in Milkpak Ltd and immediately
began investing in milk cooling tanks. Between —988 and —992, —00 milk tanks were installed.

 
 
  

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—992 onwards, with full support from the Nestlé headquarters in Switzerland, reorganization of
the milk collection operation and the provision of agricultural technical assistance became top
priorities.

The investment paid off. Within a decade, Nestlé's purchase of fresh milk had quadrupled, and
the number of small farmers selling milk to Nestlé tripled.

In 2008 the market share of Nestlé Pakistan in the dairy milk category has been estimated at 40
percent.

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Nestle is pursing growth strategy. They have invested $ 70 billion at Kabirwala Plant and they
are planning to invest $ 38— billion in the milk business.

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RV Urban areas of the country

RV Upper and Middle income class

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Nestle Milkpak has adopted the functional positioning strategy like:

³Khaalis He Sab Kuch Hai´

³Wohi Qudarti Maza´

³Jaan Banaoo´

 
 
   

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Addition of IRON and Vitamin ³A & C´

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Nestle has been serving the Pakistani consumers since —988, and it has built a strong brand
image due to its quality products.

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Nestle Milkpak is known as the best UHT milk in Pakistan due to consistency in quality.

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Nestle Milkpak¶s annual turnover is Rs.30 Billion which provides it a financial edge over its
competitors.

RV '&  !)

Conduct more training programs to educate their employees like conduct a program of their
drivers with motorway police.

RV " $$ (!'$$%)

For this purpose Nestle Milkpak Company make a team of doctors who go to those places from
where they collect milk. Doctors check the supplier¶s animals and give them the information
about the safety and eating program of the animals.

RV c%!!((!)
Nestle Milkpak make one stop shop for their supplier¶s farmer .From there they purchase clean
crops, medicine or other material on reasonable price.

RV
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Nestle collects Milk directly from the farmers instead of relying on the contractors. And its
distribution is also very strong. In this way it has a complete control over its supply chain.

RV 5&$(',%(
Nestle believe in expert workforce because it is necessary to remain his name at top companies.

RV     5&$ "'& !?

For this purpose they make customer service management who receive the complaints or
suggestion of customer and take quick action.

 
 
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Nestle Milkpak give the value to the customer through new innovation. For this purpose they add
iron quality in milk and Nesvita for strong bones.

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RV Nestle Milkpak does not give milk to the shopkeeper on credit. This thing has affected on
the annual sale of the milk because their competitors give milk on credit.
RV Nestle Milkpak company does not spend its lot of money on advertising or other
promotion programs.
RV Price is also weakness of Milkpak because sometime its price is high than other
competitors.
RV Nestle has not been able to retain talented workers. People at the centers are sometimes
treated in an insulting manner. There is a lack of job surety in nestle Milkpak because
they give job most to their employees on contract basis.

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RV Pakistan dairy industry is the World¶s fifth largest industry with annual production over
40 million tones.
RV There is an opportunity for companies to introduce value-added products like  r anÔ,
ice creams, aneer,  oya, flavored milk, dairy sweets, etc.
RV There is a phenomenal scope for innovations in product development, packaging and
presentation.
RV There is an opportunity for companies to increase productivity through UNDP&PDDC
supporting projects.
RV Farmers are engaged in agriculture and dairy at the same time.
RV More people are coming towards processed milk because loose milk is dangerous for
health due to a lot of contamination.
RV There is an opportunity for investors to invest in Pakistan dairy industry.
RV There is an opportunity of the increasing employment for the people after starting
UNDP&PDDC projects.

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RV Very low quality milk is provided by the milkmen to dairy farms which is a very big
threat for the entire market.
RV The shortage of milk providing animals is also a threat for entire milk industry.
RV Poor profitability for farmers
RV Lack of contact for farmers to the market mechanism.

 
 
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RV Lack of education among the farmers is making it difficult to change farm and dairy
management systems.
RV Despite the huge volume of milk produced in Pakistan, processors find it hard to procure
sufficient milk to meet future consumer demand.
RV Load shedding is a major problem of all companies because they purchase generator for
the running of their chiller, due to this the company¶s budget and price of milk increase.


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The rules of government of Pakistan do affect the company and its brand. The company policies
are affected and its budget is also affected .Nestle paid —5% sales tax and —8% excise duty when
they direct import chiller from the other country but mostly they purchase chillers inside the
country .Increases the prices of light and petrol effect transportation and other cost.

On the other hand, Government gives chiller to the Nestle Milkpak at interest free installment
through UNDP and PDDP projects. This process reduces the pressure on milk industry and
increase the productivity.

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If we disintegrate our milk supply chain and re-evaluate its each component in detail, it will be
safe to say that there are fair enough chances of such lethal contaminations. The first and
probably the most crucial problem arise from the on-field farm practices of our rural farmers.
Pakistan is blessed with good genetic potential for dairy development, buffalo being the principal
source of milk. But due to problems such as poor nutrition, mismanagement, failure to control
disease, unavailability of veterinary and poor animal husbandry, only 5% milk is used for
processing.
Nestle Milkpak is playing an important role in the economic growth of Pakistan .They earn lot of
profit and also trust its profit in social welfare through making schools etc. They also give job
opportunities to the people of rural areas through giving them animal on interest free
installments. Now a days, our economy is on recession due to this the prices of processing milk
is increasing day by day.

$( !)

Social factors include the demographic and culture aspect of the external micro environment.
These factors affect customer needs and the size of potential market. People mostly prefer fresh
and open milk & rely less on processing milk because they understand processing milk
companies add chemical in milk during process. But Nestle Milkpak try to change this trend

 
 
  

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through advertisement and awareness programs. Processing milk is mostly used in large cities or
towns. Companies try to win large number of customers giving quality or values.

$$( !)

Technological variables have an overall positive effect on the business. As rate of innovation and
production technology is always in the favor of company. Technology is particular importance
because it has always been the main source of increase in productivity. Nestle uses latest
technology and high quality machinery in the production of milk. For example Nestle recently
open Asia¶s largest factory in Kabirwala. Nestle Milkpak used machinery which produced —800
to 2000 tones milk daily.

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RV 5&$ "'& 
Nestle Milkpak has the largest market share due to its consistent quality.

RV '& 
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Nestle Milkpak is available in different product range and stylish packaging.

RV '& ("$
Nestle Milkpak has been in the market for a very long time and it is at maturity stage.

)

RV    !'

Milkpak is holding a large share in the market due to its quality at same price as compared to
competitors.

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Milkpak is not sold directly to consumers and the complete distribution process is followed. It
uses indirect channels for distribution like: 

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RV Focusing on health conscious people in their advertisement.

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RV Advertisement
RV Public relations

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Brands like Milk Pak (owned by Nestle) had led the dairy market in the world¶s fourth largest
milk producing country for nearly two decades without any real sustained competition. Engro
Foods, in contrast, had only recently been established by Engro a traditional giant in Pakistan's
chemical and fertilizer industry.

Evidently, Olper¶s has woken up the competition. Milk Pak responded with campaigns of its own
to reaffirm the positive equity of its brand and has largely focused on a message of health,
vitality, and strength through quality milk. Despite dwindling market share ³Olper¶s is very
strong in terms of consumer quality perception. Our monthly blind taste tests show that
consumers rate Olper¶s significantly higher than Milk Pak´.

Olper's continues to understand its consumers and follow through on that knowledge. Engro
Foods aims to become the only company to utilize all of the milk collecting areas in Pakistan and
also plans on developing the biggest dairy farm in the country. The company¶s reputation as a
local giant actively involved with community welfare in remote areas has also been a positive
add-on for Engro Foods.

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 2006, sales for
Olper¶s Milk had reached Rs.— billion (approximately US$ —5 million) and in 2008, the brand
has a market share of close to 22 percent second only to Milk Pak (estimated at 40 percent). The
critics had to grudgingly accept that the new entrant to the multi-billion rupee packaged milk
category meant business.

 
 
  

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RV Olwell¶s advertising must conform to local values.

RV PR Activities; mother¶s day special sponsorships.
RV Advertising at the right place; Olwell¶s TVC can run during yoga shows in the morning.
RV Offer discounts in Ramadan.

! $

RV The immense competition is going in the market so Nestle Milkpak should penetrate
more and more in the market.
RV 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.
RV 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.




 
 
  

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