Professional Documents
Culture Documents
Launching of
DairyKing Foods Ltd
Brand
Milk.King
Submitted to
Dr. Sikandar Khan
Submitted by
Milk is complete diet therefore it has a vital importance in our life as food. Currently
there are two modes of milk is available in Pakistani Market. Firstly, being loose milk
supply to house hold by milk man or bought from street milk shops. Other is Tetra
Pak. Both of these modes has short coming and disadvantages.
Loose milk is prone to impurities germs, bad hygiene conditions variable fat level and
adulteration. Buyers are never sure what they are getting what they are paying for , on
the other hand tetra pack milk is known for adulteration through chemicals and
different types of hazardous material which are injurious to human health. Secondly
tetra pack milks high prices keep it out of reach of vast majority of people.
Keeping in mind the above mention gaps in the milk industry we have decided to
launch a project of pure milk supply at door steps of customers at the low price and
better quality.
Background
Pakistan with current estimates is the 4th largest milk producing country in the world
with 33 Billion liters of milk produced annually. The potential is huge but the sector
operates mostly in the informal economy and needs a consistent effort to formalize
and be able to contribute better to the national economy. Out of the total milk
produced, 97% is in the informal sector (i.e. loose milk consumed in the villages and
or sold in the cities through "Gawallas" in unhygienic conditions and without any
quality standards). There are 8 Million farming households in Pakistan with a total
herd size of 50 million animals. 97% of these farmers are not linked to formal markets
and hence are not progressing in economic terms.
The potential is estimated on the basis of the fact that livestock and agriculture sector
contributes over 22% to the GDP, and a milk economy that in value terms is 27.7% of
the total agriculture sector. 3 % of the milk is being supplied by the companies after
processing in different ways. Showing lot of potential available in the market in this
sector. Currently there are four major milk suppliers of tetra packed milk in country
with market leader Nestle Pakistan and followers Engro Foods, Haleeb Foods, Noor
Pur and Good Milk in some areas of country. Milk is 10 % of Human diet on daily
basis, it is the necessity of life for a newly born baby to the old age people.
We have decided to launch the project with a dairy farm establishment leading to Milk
pasteurization and then supply to the customers at door step. We have decided to
launch this project to avail the opportunity of the gap available between the loose milk
and Tetra Packed milk as loose milk is available readily at cheaper rate but hygienic
problems along with adulteration issues involved in it. On the other hand Tetra packed
milk with High Cost along with some news of adulteration in milk.
Project formulation
Rationale to start this project lies in the fact that there is a huge gap in Pakistani dairy
market due to mistrust of customers in the quality and purity of loose milk and tetra
pack milk. Milk being a necessity have an evergreen high demand potential which can
yield into high profits if done correctly. Therefore by implementing proper technology
and management practices we can implement and run this project successfully and
profitably.
Delimitations
Our main focus in this project would be on project management aspect. However we
will be delivering brief details about the business and marketing aspect of the project.
However financial details will kept to minimum as per the instructions of the
instructor.
Resources required
There are a multitude of resources for the completion and running of his project. As
this project consists of three different units i.e. Dairy farm, Pasteurization plan and
sales/distribution network therefore all these units require different types of resources.
The resources required in dairy farm includes land, water sources (tube well,), tractor,
generator, fodder cutter, fodder distributor, trolley, loader, milking parlor, separate
sheds for cows and cubs, milk making machines for cubs etc. On the other hand
resources required for pasteurization plant include pasteurization plant machinery,
proper infrastructure for the installment of this machinery and the pipelines
constructed properly for the save movement of milk in and out the plant. Our sales and
distribution network requires packing machines, chilling vehicles, chillers, cold
storage and distribution vans.
Value creation
This project has great value for all the stakeholders involved. Our customer will get
pure and healthy dairy products every day. They will be able to get whatever quantity
they like at any time they want. On the other hand keeping in view that demand and
supply situation in the market and absence of quality dairy products indicates a great
potential for us to earn profits and fill this gap taking first mover advantage in the
pasteurized milk segment.
Stakeholders
Following are the major stakeholder who may have their interests and different aspects
of our project.
1. Investors
2. Customers
3. Employees
4. Government agencies
5. Suppliers
6. Distributors
7. Locals
Project board
Project board will involve the following key people
1. CEO
2. Head of Finance
3. Head of Technical (Pasteurization Plant)
4. Head of Production (Dairy Farm)
5. Head of Marketing & Sales
6. G.M Admin
Project team
Project team will include the following people along with their roles described.
1. Project Manager
2. Finance Manager
3. Plant Manager
4. Farm Incharge
5. Marketing Manager
6. MIS Manager
7. Procurement Officer
8. Quality Assurance Manager
Project organization chart
Project Board
CEO Head of Finance Head of Technical Head of Production
Project Manager
Procurement
Officer
2. PROJECT DESCRIPTION
Project Purpose
To establish pasteurized milk production and distribution company named MilkKing.
Background
Milk is complete diet therefore it has a vital importance in our life as food. Currently there are two
modes of milk is available in Pakistani Market. Firstly, being loose milk supply to house hold by
milk man or bought from street milk shops. Other is Tetra Pak. Both of these modes has short
coming and disadvantages.
Loose milk is prone to impurities germs, bad hygiene conditions variable fat level and adulteration.
Buyers are never sure what they are getting what they are paying for , on the other hand tetra pack
milk is known for adulteration through chemicals and different types of hazardous material which
are injurious to human health. Secondly tetra pack milks high prices keep it out of reach of vast
majority of people.
Keeping in mind the above mention gaps in the milk industry we have decided to launch a project
of pure milk supply at door steps of customers at the low price and better quality.
Objectives
1. Establish a dairy farm with imported cattle
2. Mechanize the dairy farm according to international standards
3. Use technology to get maximum yield
4. Setup a Pasteurization plant according to international health and safety standards
5. Setup and fast, efficient and secure distribution network for our products
6. Build a strong brand
7. Achieve high levels of product quality and service.
Project Scope
The following are within the scope of the project:
a. Business Plan
b. Company Registration
c. Legal Procedures
d. Brand Name registration
e. Hiring Staff
2. Dairy Farm
a. Land Acquisition
b. Building & infrastructure
c. Import of Animals
d. Import & installation of machinery
e. Breeding treatment of animals
f. Hiring of staff
3. Pasteurization Plant
a. Import of Machinery
b. Hiring staff
c. Installation of machinery
d. Quality assurance
e. Maintenance and service schedule
The total cost of the Phase I of Project i.e. dairy Farm Development is Rs.60, 000,000, out of which
the capital cost of the project is Rs. 50,000,000 for purchasing the animals and constructing the
building and the rest is used to meet the working capital requirement.
The proposed Project is based on the assumption of 60:40 debt equity ratio. However this
composition of debt and equity can be changed as per the requirement of the investor.
Assumptions
• Finances will be arranged successfully
• Land will be available
• There will be no bureaucratic hurdles in imports of machinery and animals
• Skilled labor and staff will be available
• Competitors will not react too soon
• Market will respond favorably
Constraints
• Unstable political system
• Unfavorable social and economic conditions
• High inflation
• Currency Fluctuations
• High mark-ups on bank loans
• Lack of experience
Project Organisation
Project sponsor – Milkin.King Dairy Limited
Project Manager – Ans Ali Ashraf
Finance Manager – M.Waqas Khan
Plant Manager – Mazhar Javed
Farm Incharge
Marketing Manager
MIS Manager
Procurement Officer
Quality Assurance Manager
Risk Register
The following are the most important identifiable risks to the Milk.King, to be discussed in the first
project board meeting:
8. FEASIBILITY STUDY
Introduction
Pakistan with current estimates is the 4th largest milk producing country in the world with 33
Billion litres of milk produced annually. The potential is huge but the sector operates mostly
in the informal economy and needs a consistent effort to formalize and be able to contribute
better to the national economy. Out of the total milk produced, 97% is in the informal sector
(i.e. loose milk consumed in the villages and or sold in the cities through"Gawallas" in
unhygienic conditions and without any qualitystandards). There are 8 Million farming
households in Pakistan with a total herd size of 50 million animals. 97% of these farmers are
not linked to formal markets and hence are not progressing in economic terms.
The potential is estimated on the basis of the fact that livestock and agriculture sector
contributes over 10% to the GDP, and a milk economy that in value terms is 27.7% of the
total agriculture sector.3 % of the milk is being supplied by the companies after processing in
different ways. Showing lot of potential available in the market in this sector. Currently there
are four major milk suppliers of tetra packed milk in country with market leader Nestle
Pakistan and followers Engro Foods,Haleeb Foods, Noor Pur and Good Milk in some areas of
country. Milk is 10 % of Human diet on daily basis, it is the necessisty of life for a newly
born baby to the old age people
We have decided to launch the project with a dairy farm establishment leading to Milk
pasteurization and then supply to the customers at door step. We have decided to launch this
project to avail the opportunity of the gap available between the loose milk and Tetra Packed
milk as loose milk is available readily at cheaper rate but hygenic problems along with
adulteration issues involved in it.and Tetra packed milk with High Cost along with some news
of adulteration in milk.
SWOT Analysis
Strengths
• Back bone and main stay of economy. Provides raw material for food & Leather industry.
• Major source of food, Milk
• Huge demand and supply gap in dairy sector
• Customers mistrust over loose and tetra pack milk
• Backward and forward integration will help to get maximum benefits
Weaknesses
• No proper Infrastructure available
• No local breeds available that will cause the problems for Animal Management.
• Due to Economic Instability Price of the finished products will effect.
• Lack of experience and knowledge
Opportunities
• Govt. of Pakistan & Sate Bank of Pakistan priority sector.
• Dairy products needs are 30% higher than supply.
• Commercially viable sector with great credit potential and absorption capacity.
• Vast range of area of operation, more needs and scope of development.
• Value added dairy products are in demand.
Threat:
• Sensitive sector as Food and Specially Milk is most sensitive to handle.
• International Prices of Powder Milk
• Competitors will respond aggressively
• Adaptability of imported animals In local environment
MARKET POTENTIAL
Livestock plays an important role in the economy of the country. Livestock sector contributed
approximately 51.8 percent of the agriculture value added and 11.3 percent to national GDP
during 2008-09.Gross value addition of livestock at current cost factor has increased form Rs.
1052 billion (2007-08) to Rs. 1287 billion (2008-09) showing an increase of 22.3 %. The
value of livestock is 6.1% more than the combined value of major and minor crops.
Government gives high priority to its development and is focused on private sector led
development of livestock. Underpinning the importance of livestock, the government has
placed livestock on national development agenda. It has formulated “Livestock Development
Policy” and “Poultry Development Policy”. Both policies are aimed at private sector led
development of livestock with Government providing enabling environment. The policies
would provide a frame work for accelerated development of livestock.
To spearhead the development efforts through private sector, fully autonomous private sector-
led, “Livestock and Dairy Development Board” and “Pakistan Dairy Development Company”
have been established. These companies are serving as platform for investment in livestock
sector. Apart form provincial Government programs, the federal government has substantially
increased public sector investment in livestock sector and has initiated mega projects to the
tune of Rs. 7.1 billion for strengthening livestock services for improved disease diagnosis &
control; milk and meat production; breed improvement; animal husbandry and management
practices in the country.
In view of the importance of livestock in the economy as well as in the life of a common man,
the Government is trying by all means to fix priorities to increase production of milk, to meet
rising domestic demand of ever increasing population and produce exportable surplus as well.
The major products of livestock are milk and meat.
Capacity
We have planned an initial herd size of 200 Cows, which is economical to justify the
overhead cost. The farm size will increase to approximately 1,000 cows within
10 years. Herd mix of 100% cows is recommended to get the maximum milk production
round the year.
Animal Selection
Holstein-Friesian Cow
Holstein cattle (also known as Holstein-Friesian cattle or Friesian cattle) is a breed of cattle
known today as the world's highest production dairy animal. Originating in Europe, Holsteins
were bred in what is now the Netherlands and more specifically in the two northern provinces
of North Holland and Friesland. The animals were the regional cattle of the Batavians and
Frisians, two tribes who settled in the coastal Rhine region around 2,000 years ago.
The Dutch breeders bred and oversaw the development of the breed with the aim of obtaining
animals which would make best use of grass, the area's most abundant resource. The result,
over the centuries, was an efficient, high-producing black-and-white dairy cow. It is black and
white due to artificial selection by the breeders.
Sahiwal COW
Sahiwal are a breed of zebu cattle, primarily used in dairy production, from the Sahiwal
district of Pakistan, a dry region of Punjab. They produce the most milk of all zebu breeds,
followed by the very similar Red Sindhi and Butana breeds. They were once kept in large
herds by professional herdsmen called "Junglies", but with the introduction of irrigation they
began to be kept in smaller numbers by the farmers of the region, who used them as draft and
dairy animals. They are claimed to be tick-resistant, heat-tolerant and noted for Their high
resistance to parasites, both internal and external. The cows average 2,270 kg. of milk during
a lactation, while suckling a calf, and much higher milk yields have been recorded. Their
color can range from reddish brown to the more predominant red, with varying amounts of
white on the neck, and the underline. In males the color darkens towards the extremities, such
as the head, legs and tails.
Among these three feasible breeds for dairy farming we decided to go for Holstein-Friesian
Cow and Australian Friesian Sahiwal breeds because of the reason that these breed are
considered to be the worlds largest milk producers and also are considered to be the cost
effective in the regarding to the feed and also resistent to the deceases and also heat resistent .
Heefers will be imported and will be breeded here in Pakistan so that in 10 Months they will
be familiar to the atmosphere of Pakistan and will be adjusted in the pakistani atmosphere and
will also produce amunity against germs and decises.
Project Investment
The total cost of the Phase I of Project i.e. dairy Farm Development is Rs.60, 000,000, out of
which the capital cost of the project is Rs. 50,000,000 for purchasing the animals and
constructing the building and the rest is used to meet the working capital requirement.
The proposed Project is based on the assumption of 60:40 debt equity ratio. However this
composition of debt and equity can be changed as per the requirement of the investor.
Viability Project
IRR (%) 51%
Pay Back Period (year) 3.40
Proposed Location
We have decided to establish a dairy farm of 200 animals( Imported Australian breed)
initially in Qasoor.As Geographically we can have all the Agri Inputs available there like
fodder,cheap labour,all the inputs required for dairy farm etc.also it is attached to lahore ,our
target market for finished goods causing lesser transport cost and easy access to market.
Initially we will aquire 25 Acres of Land with 5 Acre for Animal Shed and Remaining 20
Acres for Agriculture and other Inputs for Dairy Farm also Establish ment of Pasturization
Plant for Milk Processing.
Major Players
Dairy farming is not an organized sector in Pakistan. More than 90% of farming is done on
subsistence level. There are very few progressive farmers, which are running the business of
dairy farming in a professional manner. Milk processing was started in late1970s, which is
still facing challenges due to competition with the unprocessed milk. The processed milk has
captured only 3% of the total milk market. Processed milk is not the consumer's preference
due to high price differential. There are 28 milk-processing plants in the country, which were
installed in mid 1980s to promote usage of processed milk. Most of these milk plants are
closed due to lack of professional management, inadequate milk supply and poor marketing
campaign of the processed milk.
MARKET INFORMATION
Sector Characteristics
The size of this sector is still growing. Commercial Dairy farms have been set up in peri urban
areas. Few of the commercial dairy farms are:
1. Sar Sabz Dairy Farm, Okara
2. Wahdath Dairies, Bhagtawal, Sargodha
3. Dairy Land, Dhab-e- Je- Karachi
4. Ever Fresh – Bhera, Motorway
5. Nestle, Dairy Farm, Skheki- Motorway
6. J.K Dairies, Rahim yar khan
7. Sweet water Dairy
8. CSK Dairies Kasur
9. Engro Dairies, Sukhur
10. Sapphire Dairies, Raiwaind , Lahore
FARM INPUTS
Land Requirement
About 5.0 acres of land will be purchased for building a dairy farm project of animals starting
from 200 animals and at a target herd size of 1,000 animals in a period of 10 years. Majority
of this land would be used for building sheds for the animals to protect them from severity of
the weather. The area for fodder production can be acquired on lease, however we have
planned 20 acres to be bought for fodder purpose later will help in expension plans the fodder
will be purchased and stored when it is available in abundance at low price. However,
agriculture land for fodder production can be acquired with an annual rent payments. It is
assumed that around 0.33 acres of land would be required per animal for fodder production.
Dairy Farm Development
Dairy Farm will be developed on scientific basis with the help of dairy development
board
During planning a dairy we pay attention to:
FARM OUTPUT
Lactation Period
The lactation period is the period during which the animals yield milk. These animals
are called wet animals. Generally the lactation period of cows is 305 days. For
calculation, the feasibility has taken 80% of the total number of cows as wet cows.
The calving interval in cow has 13 months. The average milk yield of cow is estimated
at 20 x 305 = 6100 liters per lactation.
Phase II
Proper Dairy economics will be used to maximize the milking also advanced
technologies will be used that will be advanced mechanized process of milking
through milking parlour to reduce the bacteria load in milk further milk chillers will be
attached to the milking lines to chill the milk and then it will shifted to the cylos
attached to the pasteurization plant .
We have planned to collect milk of best quality from near by villages of our
operational area to increase the productivity and also the meat the operational costs of
the farm as well as the pasteurization and delivery to customers .A vehicle fleat will be
managed by us to collect the milk and also a quality department will be established to
make sure the quality of milk collected from the collection points. A Proper Supply
chain will be managed to collect the milk and to enable the cost effectiveness of the
milk purchased from ramers and later to supply the consumers.
Pasteurization:
Pasteurization aims to reduce the number of viable pathogens so they are unlikely to cause
disease (assuming the pasteurized product is stored as indicated and consumed before its
expiration date). Commercial-scale sterilization of food is not common because it adversely
affects the taste and quality of the product. Certain food products, like dairy products, are
superheated to ensure pathogenic microbes are destroyed.
The ultimate goal in heat treating milk is the destruction of all pathogenic or disease-causing
microbes. Usually (but not always), assuming the machinery is functioning properly, the
process accomplishes this task effectively.
Numerous studies have shown, however, that bad bugs are not the only thing destroyed by the
heat: delicate proteins, enzymes, immune factors, hormones, vitamins, mineral availability- all
undergo definite changes during the heating process. No one seriously disputes this fact.
What is not clear though, due to conflicting science and belief systems, is to what extent the
food value of the milk is actually impacted. When man-made nutrients (often inferior to their
natural form) must be added back in to replace those destroyed by heat, there is no argument.
The quality of the milk has suffered.
Marketing Plan
Company Mission
Company’s Vision
“Become the Most Innovative and fastest growing food company offering safe and
healthy products enjoyed in every home every day"
Company location
The Head Office of DAIRY KING is located in the evergreen city of Lahore at 111-Green
Road. DAIRY KING is producing a number of food products both for consumers and
industrial users.
DAIRY KING will be striving to become market leader in the dairy milk industry.
It is the managerial process of developing and maintaining a viable fit between organization’s
objectives, skills and resources and its changing market opportunities. The aim of strategic
planning is to shape the company’s businesses ‘and products so that they yield target profits
and growth.
Milk.King is pasteurized Milk with 3.5% fat and 8.9% solid non fats. At an affordable price it
will win the hearts of consumers everywhere. It will be available in a fine glass bottled
Packaging, introduced for the first time in Pakistan and will have 2 months shelf life.
Shipping Units: 250 ml: 8 bottles per carton, 500 ml: 6 bottles per carton and 1000 ml: 4
bottles per carton.
DAIRY KING will be striving to be the dairy milk industry of Pakistan. There host of product
/ brand portfolio in the packaged food category will have a significant role in the quality and
innovation of distinct styles and quality of package as well as nutritional contents.
1. Team work
2. Empowerment
3. Trust
4. Accountability
5. Enterprise
Vertical scope
Company has its own farms and cattle so it is self-sufficient and doesn’t purchase raw
materials. It has its own network of vans, which deliver the milk to all towns and city. DAIRY
KING products reach to final consumers through retail stores and sales promotion officer.
Company uses multi-channel distribution. The channel levels from raw material to final
product and distribution of DAIRY KING is as follows:
Geographical Scope
DAIRY KING is providing its innovative and hygienic products initially to Lahore. It’s not
exporting any of the milk products. But in near future it will be expanding its distribution
network to all over the Pakistan.
Situational Analysis
Product Situation
Milk.King is the brand name of DAIRY KING's UHT milk. Milk.King is Pasteurized,
Standardized, and homogenized and Ultra Heat Treated milk of the highest standards.
Pakistan Pure Food Laws standardize Milk.King to 3.5% butterfat and 8.9% SNF (Solids Non
Fat) as prescribed Safe, Economical and nourishing.
Key Benefits
1. Guaranteed Clean/Bacteria Free
2. Homogenized
3. Standardized
4. Economical
5. Pasteurized
Market Objective
Market Situation
Pakistan's dairy industry produces UHT, pasteurized, powdered and condensed milk, butter,
yogurt, cheese, cream and some butter oil. Of a total of 38 dairy plants with a total daily rated
capacity of 2,180,000 liters per day, 11 with a rated capacity of 948,000 liters per day have
been in operation. The total milk consumption in Karachi is 3.8 million liters per day and the
consumption of packed milk is 10% of 3.8 Million. Pakistan now produces an estimated 27.5
billion liters (or27.5 million metric tons) of milk annually, of which only one million liters is
processed daily. Approximately half of this amount is processed into UHT milk, 40 percent
into powdered milk, and the remaining 10 percent into pasteurized milk, yogurt, cheese and
butter. The seasonal nature of supply as well as demand for milk powder from the bakeries
and confectioneries, as well as dairy plants themselves, has necessitated the import of
powdered milk.
Competitive analysis
Currently milk is sold either directly through milkmen or in tetra packs. The main problem
with milkmen is that they mix substantial amount of water in the milk, which dilutes it, on the
other hand tetra pack milk is contaminated with chemicals and preservatives making it
vulnerable for the health thus affecting purity. Milk.King is launched to compete with loose
milk and tetra pack as its priced at 18 RS per 250ml pack. The price is very competitive and
there are no competitors in the market as no other milk is sold in glass bottled packing.
Currently the Milk.King has three major competitors in the dairy industry:
1. Milk pack (Nestle Milk pack Limited)
2. Milk Flow
3. Loose Milk Shops
4. Powdered Milk (Various Brands)
The price of Milk.King is relatively lower than both the competitor brands but higher than the
price of loose milk. Powder milk is also consumed heavily and all the companies are facing
stiff competition with each other. The concept of purchasing milk from milkmen in our
country is high because people prefer to buy because they think that tetra packs cost is
relatively high and the quality of milk in tetra pack is not as fresh as milkmen milk.
Distribution Situation
Company is using 2 channels for distribution of Milk.King
Financial Analysis
Milk.King is charged at 18Rs to the final consumer. Company has a trade margin of 6.84 %.
Company to retailer trade margin is 4 percent.
Positioning
Milk.King is positioned as “Fresh and hygienic drinking milk at a very reasonable price with
new convenient packaging”.
Product Line
Milk.King will be launched in 1/4th liter pack after one year of operation in the
market.
Price
Milk.King‘s price is below the competitor’s prices.
Distribution Outlets
To increase the distribution of milk in the 1000 untapped retail outlets.
Sales Force
Initial operational with 15 sales promotional officer who are responsible for the
direct sales to institutions, marriage halls, caters , offices ,schools, households and tea-shops.
Sales Promotion
Milk.King has developed a new advertising campaign that supports the positioning strategies
and has set the advertising budget by 10 percent.
Industry competition:
Industry is a group of firms that offer a product or class of products that are close substitutes
for each other. Industries are classified according to the number of sellers, degree of product
differentiation, presence or absence of entry, mobility and exit barriers, cost structure, degree
of vertical integration and degree of globalization.
The industry competition for Milk.King includes Tetra packed milk; loose milk offered by
milk shops and powdered milk. All of these are close substitutes for each other. Dairy
industry is monopolistic competition as there are many companies like Nestle, Milk flow
some foreign brands who are offering milk in various forms and packaging and are able to
differentiate their offerings on the basis of price and positioning. All these companies are
focusing on market segments where they can meet customer’s needs in superior way and
command a price premium.
Competitor’s profile
Reaction Pattern:
Nestle is one of the tigers in the Dairy industry in Pakistan. It will react swiftly and
strongly to any assault or move of DAIRY KING.
Market Segmentation:
Milk.King has identified large group within the dairy market with similar wants, geographical
location and buying attitudes and has segmented the market on the basis of geographic,
demographics and psychographics of the consumers.
Geographic:
Milk.King is targeting Lahore City initially.
Demographics:
Milk.King has segmented the market on the basis of their income level, social class and age
group.
Social Class:
Upper lower class, working class, middle class and upper class with particular
emphasis on bread earners of the family (males) and decision makers of household
purchases (housewives)
Income level:
5000-10,000Rs
11,000-25000Rs
26,000Rs and up
Age groups:
10-20 years
21 –30 years
31-60 years
65 and up
Psychographics segmentation:
Milk.King has used value segmentation scheme. Milk.King is providing best quality hygienic
milk at an affordable price. Milk.King is providing value to its consumers by delivering the
best at a lowest price.
Milk.King has positioned itself in the largest market segment, concentrated market for
drinking purposes.
MARKET TARGETING:
Cost:
cost is most effective difference to promote Milk.King Milk consumer market is very price
sensitive while. There are various brands available in the markets which are higher in price.
DAIRY KING decided to promote Milk.King Milk on cost basis and has kept its costs
competitive with loose milk available in the market.
Quality:
In this competitive era customers are quality conscious Milk.King Milk is premium quality
milk with fresh taste. Communicating the Company’s Positioning For communicating its
differences DAIRY KING Foods Limited chooses effective media like radio, television,
billboards, buses etc to target its customers.
PRICING:
Mark Up Pricing
The most elementary pricing method is to add a standard markup to the product’s cost.
DAIRY KING has a markup pricing of 20 % on their cost of good manufacturing.
Value Pricing:
DAIRY KING have adopted value pricing, and is charging fairly low price for a high
offering. It’s offering high value to its customers. Value pricing is not a matter of simply
setting lower prices on one’s products compared to competitors it is a matter of reengineering
the company’s operations to become a low- cost producer without sacrificing quality, and
lowering prices significantly to attract a large number of value-conscious customers. An
important type of value pricing is Everyday Low Pricing (EDLP), which takes place at the
retail level. Milk.King is sold at Everyday low pricing as the price is kept low throughout the
year.
Price Discounts and Allowance
DAIRY KING has used Quantity Discounts that is a price reduction to those buyers who
buy larger volume; it is offered on a non cumulative basis (on each order place)
DISTRIBUTION CHANNEL:
Marketing Channels
These are the sets of the interdependent organizations involved in the process of making a
product or service available for the use of consumption.
1. They gathering information about potential and current customer, competitors, and
other actors and forces in the marketing environment.
2. They develop and disseminate persuasive communication to stimulate purchasing
3. They place an order to the company
4. They provide for the successive storage and movement of the physical products.
Channel Level
It is a two-level channel, DAIRY KING has its own distributors which are suppose to deliver
the Milk.King milk to the wholesaler as well as to the retailer, through which it reach to the
final buyer or consumer. Secondly and most importantly Milk.King will be delivered to
consumers right at their doorstep through our home delivery service.
Indirect channel:
Company has a network of distributors and retailers who sell the milk to the final consumers.
Milk.King has many authorized distributors throughout the city which distribute the milk to
1000 retail outlets in Lahore. Indirect channel constitutes 50% of total sales of Milk.King
Milk.
Direct channel:
DAIRY KING has several sales promotion officers in Lahore which are involved in direct
sales of the milk. Direct channel can be further divided into:
Direct:
The sales force distributes Milk.King to government offices and institutions.
Indirect:
Milk.King Milk is distributed to teashops, offices, schools, caters, marriage Halls and
households etc by the direct sales distribution network of DAIRY KING. Direct channel
constitutes of 50 % of the total sales of the Milk. In the future DAIRY KING has plans to
expand the direct channel.
ADVERTISING:
Ads are cost effective way to disseminate message, build brand preference or to educate
people. Most companies use an outside agency to help create advertising campaigns and
select and purchase media. DAIRY KING Food Limited has contract with the agencies to
develop advertising campaign. DAIRY KING Food Limited has three advertising agencies
which guides the company what should be the next move and also give feedback regarding
the market and competitors. DAIRY KING has three agencies:
1. Orient McCann
2. MPL
3. Asiatic Advertising
Informative Advertising:
In the introduction stage DAIRY KING will give detailed informative advertising about
Milk.King Milk. At this stage the advertising duration in television will be of 45
seconds.
Persuasive advertising:
After getting awareness in the market, DAIRY KING will emphasize on persuasive and
comparative advertising to present additional and competitive features of Milk.King. At this
stage the media channels will remain same, but tenure in television will be shorter than
before.
Reminder Advertising:
At the maturity stage of Milk.King, DAIRY KING will give only reminder advertising to its
customers that Milk.King exists in the market. At this stage the DAIRY KING will reduce the
frequency of its ads in television and in radio and will shortlist the billboards and advertise
only at rush and potential areas.
Stages in the Product Life Cycle: The advertising budget should be appropriate according to
the product life cycle; it varies with the different stages i.e. introductory, growth, maturity and
decline. Milk.King is newly launched product it will require huge advertising budget to build
awareness and to gain consumer attention.
Market Share and Consumer Base: High market share brands like Haleeb require less
advertising to maintain market share. Usually it is perceived that higher the advertising
frequency higher would be the consumer’s reaction and higher the sales. Milk.King will be
advertised heavily by using radio, print media, televisions, billboard, metro buses etc to attract
a large market.
Advertising Frequency:
At initial stage of Milk.King in the market, repetitive advertising will be persuaded and ad
will run three times in a day for 5 days a week in first three months of the re launch .
Promotional Budget
Estimated promotional budget of DAIRY KING for Milk.King Milk:
Message Generation:
The product benefit message should be decided as part of developing the product concept. As
Milk.King is milk product, it will give the nutritional, rational, sensory message to its
customers, which will appeal them to buy it.
Message Execution
The message impact depends not only upon what is said but also on how it is said. For
executing the message there are different cohesive styles, tone, words and format.
A. Execution Style:
The advertisement of Milk.King Milk will be executed with striking musical jingle, famous
personality (pretty models), showing cows, buffaloes and farm houses to give a natural image.
B. Execution Tone:
The executed tone of the ad will be positive and inkling towards Milk.King, humor will be
avoided as it takes attention away from the message.
C. Execution Words:
The memorable and attention-getting words will be used in the advertising of Milk.King
Milk, (HAR DAM TAZA, BEHTREEN ZAIQA, MUNASIB QEEMAT DOODH
BEHTREEN, MILK.KING……….) so that the consumers could remember the ad.
D. Execution Format:
TV advertisements will use attractive color combinations (the background and presentation)
with appealing musical jingle. Print ads will be using colorful pictures (Dairy Farm) with
product packaging and its information.
Electronic Media:
The electronic media will be only Radio and Television. DAIRY KING has decided to
advertise in FM 100, FM 101, and Radio Pakistan Lahore, Ads will be aired on PTV, PTV
World, Geo Television (Cable), and at ARY Gold (Cable).
Print Media:
The print media used will be Newspapers (Front Quarter page), i.e. Jang, The News, Dawn,
and Magazines (Quarter page) i.e. Akhbar-e-Jehan, Family magazine, Khwateen Digest,
Sunday magazine.
Billboards:
DAIRY KING had decided to advertise “Milk.King “milk on several billboards at
various locations covering the whole city.
REFERENCES
ANNEXES