Marketing of Olper s milk and Nestle Milkpak

Submitted by: Khadija Haider 210 Seemab Shoaib 131

Contents
y Engro Foods History y Vision and Core Values y Segmenting and Targeting y Positioning the brand y SWOT Analysis y PEST Analysis y 4Ps y Comparison 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

Vision
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."

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 Segmentation 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. ‡ Psychographic Segmentation 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. ‡ Behavioral Segmentation Olper 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.

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

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

‡

Weaknesses
SWOT Analysis
‡Olwell TVC. ‡ Packaging. ‡ Low quality milk. ‡ Milk collection distribution costs.

and

Threats
‡Competition ‡ Perceptions differentials. and price

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 Factors
unstable political conditions strikes and road blocking creates problem for delivery on time

Technological Factors Socio-Cultural Factors ‡ The perception that only loose milk is fresh. There is only 4% penetration of packaged milk.
‡ 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.

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-toopen, 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
‡ estle ‡ alee il pa
MILK PACK

38

OLPERS OTHER

22

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 Strategies
Nestle 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 Targeting
Segmentation 
Geographical

Targeting 
Urban areas of the country.  Upper and Middle Income Class

Target Market is major populated cities of Pakistan  Demographic for the users in higher upper or middle class families

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

Strengths 
Strong 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 Factors The 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 Factors
They 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.

PEST
Technological Factors Technological variables have positive effect on the business. Nestle uses latest technology and high quality machinery in the production of milk.

Social Factors People mostly prefer fresh and open milk and rely less on processing milk because they think that milk companies add chemicals in milk during process.

Product 
Quality product 

Product style and logo  Product life cycle.

Price
Competition based pricing

Placement and distribution Milkpak 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.

Promotion Advertisement Public 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