Hamdard Institute of Management

Sciences

Principles of marketing

Term Assignment

Hamdard Institute of Management Sciences Hamdard

 university KarachI
Principles of Marketing Term Report

PREPARED BY: ABDUL WAHAB AFRIDI

GR #: 282018

CLASS: BBA-4

SUBMITTED TO: PROF. LUQMAN HAKEEM

TOPIC: MARKETING STRATEGY OF OLPER’S

SUBMISSION DATE: 29-10-2010

OLPER’S MILK
Engro Food’s History:
Engro Foods (Pvt.) Limited (EFL) has been established in 2005 as part of a diversification
process at the Engro Group. The plant located at Sukkur on 23 acre land, has the raw
milk reception capability of 300,000 liters per day and UHT milk capacity of 200,000
liters per day. The plant has been established at a cost of Rs. 1 billion which provides
direct employment to 750 people.
Engro Foods has 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.
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:
1. Leadership.
2. Innovation.
3. Diversity and International focus.
4. Quality and continuous Improvement.
5. Candid and open communications.
6. Individual growth and development.
7. Enthusiastic pursuit of profit.
8. Ethics and integrity.
9. Safety, Health and Environment.

Olper’s Milk - Product:

Launched on March 20, 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.

Shipping Units:

1 Litre (1000 ml ) : 12 packs per carton.

½ Litre (500 ml) : 12 packs per shrink-wrapped tray.
¼ Litre (250 ml) : 27 packs per shrink-wrapped tray.

Packaging:
Packaging of Olper’s milk is supreme. Its rich red color and brand name written white looks
wonderful. It follows all the basic aspects as well. Its packaging is informative of product
precautions, information regarding feedback.

Milk consumers in Pakistan today are becoming more and more aware of the diseases
associated with the use of open milk. Olper’s packaged milk has been regarded as one of
science’s most useful techniques as it assures fresh, high-quality milk to the consumer without
the hassle of refrigeration. It has also become easier to transport thus people living in remote
areas can also benefit from it now.

UHT Processed milk is cooler rapidly to atleast seven degrees celcius and packaged into
pre-sterilized containers and aseptically sealed. Since bacteria cannot enter the UHT milk,
it can stored at room temperature for atleast three months.

Olper’s milk has clearly surpassed open milk in its advantages and should be encouraged
more so that people realize its benefits and switch to a healthier lifestyle.

Segmenting and targeting the market for Olper’s:

It is difficult for any one company to engage in mass production, mass distribution and
mass promotion for its product. The complexities arise from the proliferation of
advertising and distribution channels and the high costs associated with reaching a mass
audience. Therefore, companies segment the market so that they can target the group
of customers who share similar needs and wants.
The milk sector shows a market that has homogeneous preferences that is the
consumers have similar preferences. They want milk to be white, carefully processed,
and 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. So far company has introduced three
new products: Olper’s milk, Olwell diet milk and Olper’s cream.

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. 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.

Psychographic segmentation:
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 experiencers those who are seeking
variety in the milk sector.

For example the ads for Olper’s 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 their buyers 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.

Behavioral segmentation:

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.

There may be some hard core loyal in the milk sector. Loyalty maybe towards such
established brands as Nestle and Haleeb. There might even be switchers and shifting
loyal in the milk sectors that are either price sensitive or want variety. As a result, the
marketers need to find ways to make the hard core loyal attracted to the Olper’s brand
and shifting loyal and switchers to convert into hard core loyal as well.

Placement & Distribution:

According to Mr. Ali Akbar, Director Marketing EFL, “In order to succeed, you should
ALWAYS capitalize on your STRENGHTS and NEVER on your COMPETITOR’S
WEAKNESSES!”

Engro Foods did exactly that. They used their decades of PR with farmers and used it to provide
world-class supply-chain management for delivering the ultimate quality milk in Pakistan.

Having kicked off simultaneously in 20 cities across Pakistan, the launch has been
ambitious and currently 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 dales and 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.

Now they have extended their range from cities to rural areas as well. They were always a
leading brand in chemical fertilizers. So they have that influence in the villages and other
rural areas around the cities. They are making good efforts there as well to promote their product.

Marketing & Positioning the brand:

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:

1. Packaging of Olper’s milk and Olwell (Low-fat condensed milk) 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.

2. The brand has been positioned as an all purpose milk that is meant for everyone,
especially for those who live life to the fullest, hence its tag line, “jo dil khol kay
jeetay hain unheen kay liyay hai Olper’s”

Olper’s always tries to create customer intimacy that is it focuses on satisfying the
customers’ unmet needs. Processed milk is seen as less lacking all the nutritions that are
part of milk due to passing through so many processes. But Olper’s positions itself as
milk that has not lost its nutrients.

The unique selling proposition for Olper’s is: Subah Bakhair Zindagi, but recently the
company changed the USP to: Jo dil khol kay jeetay hain unheen kay liyay hai Olper’s.
Both the tag lines have a very positive impact on Olper’s image because of the emotions
involved in both the lines.
The marketers have used different positioning for Olper’s products:

a. They have used the attribute positioning for Olper’s milk. The main theme of the
product is that it is meant for all purposes without any user imagery. Olper’s ads
also show attributes of milk such as good for health.

b. They used the benefit positioning for Olwell (Low-fat condensed milk). The product is
positioned
as delivering the benefit of helping to reduce weight and for healthy bones.

c. 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 great.
It can be said that all the different stages have been performed by the marketers with
extreme care and research.

They also did a lot of one-to-one marketing:

Float Activities:
One way that Engro food and Olper’s have chosen to interact with their customers is Float
Activities. Olper’s have been launching promotional activities all the time and according to them
these float
activities proved to be very effective to keep in touch with their customers.

Rural Melas:
Since Pakistan is a country with most of its population living in rural areas. Olper’s decided to
reach those potential customers with a different approach and they arranged different rural
side melas in which they can easily state their point and make the potential customers a group
of loyal customers.

Bachat Bazaars:
Bachat bazaars are very common in Pakistan & since this is a trend in the market, Engro foods
used this way to reach to its existing customers and also targeted new cutomers in this 1-2-1
marketing way.

Free Sampling:
To promote and let the people who have not yet tested the product, companies use the technique
called Free Sampling. Engro foods has done free sampling to make sure that people are aware of
the product and also to get the feedback out of the customers to make sure if there are any lags
in the product.

During Ramadan, Olper’s outsold its competitors like Good Milk or Haleeb. The reason is that
they did free sampling. During iftar, they gave away free Olper’s 250ml cartons.

Chain Store Promotions:

Another one-to-one way of marketing technique that Engro foods have adopted to create
Effective touch point with their customers is by putting their brand in all the chain stores in
Pakistan. In this way people can have access easily to the product and they do not have to
look for the product. This is also great placing of the product on the part of the company.

Other means of promotions included banners, billboards, posters, vehicle branding and their T.V
commercials.

Their T.V commercials are usually quite expensive and they just create a whole vibe or give you
a refreshing feeling with their red and white brand colors used as the theme for the ad and they
show normal people using the product and how their lives are happily moving on and their
normal routine is so much of a delight if they drink just a glass of Olper’s milk. They also take
big names from the media to act in their advertisements, which is good for the brand, though it
costs them, but the people who follow such famous figures would definitely think of switching
over to this brand.

They also focus on occasional advertising, as their Ramadan ads are different, being a bit more
Islamic. This creates a bonding between the consumers as they are watching the ad which they
can easily relate to. Olper’s believe in the saying that “Advertising is not an expense, It is an
investment in the product”.
Pricing Methods / Pricing Strategies :

The Engro food’s Olper’s are sold in retail stores, convenient stores, departmental outlets etc.
The pricing methods/strategies are set by those the company sells to. Convenient stores,
departmental outlets usually sell Olper’s at a fixed price according to pack sizes.
However, retail outlets use pricing methods and pricing strategies when selling Olper’s milk.

Competition-based pricing :

Engro food’s Olper’s is usually priced below, above or equal to its competitors’ prices.

Discount prices :

Olper’s are often marked down during sale period and special occasions. Like Ramadan this
will increase sales and generate profit.

Meet-the-Competition pricing:

Engro food’s Olper’s pricing are set around the same level as its competitors.

Psychological pricing:

Most of the Olper’s uses this method of pricing ; for instance, for a pack of 250ml x 27 packs
of Olper’s milk. It is priced at Rs.320 instead of Rs.330. This pricing strategy makes consumers
perceive the products to be cheaper.

Here are the current retail prices of different sized packs of Olper’s milk:

Pack size/weight Prices (in Rs.)

1,500 ml pack 85
1,000 ml pack 62
500 ml pack 35
250 ml pack 18
 COMPARATIVE ANALYSIS

NESTLE MILKPAK VS. ENGRO FOOD’S OLPER’S

Comparison on the basis of PRODUCT:

Brand Name:

Nestle has been serving the Pakistani consumers since1988, and it has built a strong brand
image due to its quality products. Nestle Milkpak is known as the best UHT milk in Pakistan due to
consistency in quality. Nestle Milkpak’s annual turnover is Rs.30 Billion which provides it a financial edge over
its competitors. In order to try and collect fresh milk Nestle Milkpak Company made 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.

In case of Olper’s. 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 Marketing of Olper’s Milk and
Nestle Milkpak company because it will never be short of milk production. The farmers also won’t have
to look elsewhere to sell their milk.

In first year, EFL crossed1.4 billion sales figure which shows customers’ satisfaction upon
EFL’s products. EFL only, has the third-generation UHT milk plant in the country. EFL plant is the only plant in
Pakistan that uses “B actofuge” 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).

Packaging:

Packaging of both the products is quite appreciable too. Milkpak’s theme is of green and white color which are also
the color of the flag of our great country Pakistan. By this they indicate a feeling of patriotism or we can say the love
for homeland. This appeals to the people who give for such things and they are likely to buy such a product. So it is
very well done.

In case of Olper’s, they have also tried their best to make their packaging very very attractive with their rich red
color and labelling done with white font. So that they could position it in the mind of the target customers that much
that they forget about other brands and simply go to the market and buy Olper’s milk. A Thumbs up for them as well
!

Market Share or Leadership:

When Olper’s was in the planning stages. Its marketers must have thought on such topics as:
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
majority of loyalties exist for brands such 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.

But 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%.
So it is quite clear that right now Milkpak is having the upper hand in the market mainly because of its long
established company name which accounts for good quality, and customer satisfaction. Another reason may be
because it is has that sentimental value in the minds of the consumers that TETRA-PACKED milk is the safest and
Milkpak was the brand which really made famous the whole concept of UHT-Treated milk and milk available in
Tetra-packs. So it will obviously be quite hard for Olper’s to overcome the market’s lion share holder Milkpak. But
they are showing good progress. Olper’s has already beaten a big competition in the name of Haleeb, which was the
second larget share holder of the market after Milkpak for around a decade or more. So Olper’s has that potential to
beat Milkpak. But for that it would need a lot of planning and great management in every aspect to overcome the
giant in the milk market in Pakistan.

Comparison on the basis of PRICE:

There is absolutely no difference in their prices. Because no one can afford to take the risk of increasing their prices.

Pack size/weight Prices (in Rs.)

1,500 ml pack 85
1,000 ml pack 62
500 ml pack 35
250 ml pack 18

Though Olper’s has invested heavily in its promotions and packaging strategies, they should have more but if
Olper’s would increase its prices then people would certainly go back to their old brands and all the hardwork done
by the company to attract customers would go in vain. As making loyal customers is their prime objective at the
moment.
In case of Milkpak, they can , but they should not increase their prices even a single rupee. Though they are having
the largest share in the market right now. But as the inflation is consistently rising and other economic problems are
happening in the country and the income of the people are becoming contracted. They cannot afford to that such a
risk. Consumers are loyal to them, but everyone has to feed their family and provide their family clothes & shelter.
So any loyal customer might change his/her brand of milk to any other brand which is more easily to purchase for
hi/her in such adverse economical conditions.

Overall, as there is no difference in the prices. People are still buying Milkpak more than Olper’s. there is this trust-
factor or one can say a sentimental value attached to the product that is just not letting people change their minds
and move over to other brands. That is the case for Milkpak and their reason of dominance. Whereas some people
are still reluctant to change and don’t want to try new things, so they don’t go for Olper’s and prefer using Milkpak.

Comparison on the basis of PLACE:

Milkpak is already having a strong base in every sector as compared to Olper’s. So is the case for placement &
distribution of their product. Milkpak being the oldest in the business here in Pakistan has more awareness &
information of their product in the consumers than any other brand. Milkpak is easily available in almost every
market in the cities. They have been extending their product in some rural areas as well. The whole concept of
packaged milk has grown from Milkpak in Pakistan. If someone would just say “DABBAY KA DOODH”, then the
instant figure that comes into the mind is of Milkpak of most of the Pakistani citizens and specially people living in
rural areas, who are not having access to the latest changes happening in the market and have no information about
new products entering in the market as they are not in touch with the advertisements of the new products. Milkpak’s
long established brand name and good quality is the key to their lion’s share in the market.

Engro Foods Limited knew about the strong hold of Milkpak in the market. So they came with good pre-planned
strategies of how to place their products in the market and their distribution channels. They also used the
conventional channels of distribution but quite effectively. They placed their products quickly in almost all the retail
stores, departmental stores as soon as it was possible. Engro is a known name in the farming community & other
rural areas, so this helped Olper’s awareness to grow in some of the rural areas as well.

Overall , in our view. Milkpak has a much better and strong placement & distribution channels than Olper’s. Mainly
because Milkpak has been in the market for longer period and has connections all around the country even before
Olper’s was in the market. Though Olper’s has shown supreme progress, but still, at the moment Milkpak is having
good placement as it is available at almost every possible store where milk is to be expected and it is also being
bought by people there.
Comparison on the basis of PROMOTION:

Milpak’s promotion’s are usually simple but effective as they do convey their message. As for Olper’s, they spend
handsomely on their promotion’s. Because they know they have a huge target market , so in order to get one step
ahead of their competitors, they are willing to pay as much as it requires. As once they will be the no.1 in the
market. They will get all their investments in the advertising back with even more profits on it. And this has really
worked for them. They have beaten all the competitors in the market other than Milkpak. Now they are looking
forward to become more powerful than Milkpak in the market. But still there are people who really don’t care how
much effort Olper’s is making to get to them. They still go on as their usual routine of buying Milkpak. Though
milkpak is not spending much as compared to what Olper’s is doing. Still there is that attachment with the brand that
consumers cannot ignore which we can say is their loyalty towards the brand.

On the whole, this is one area in which Olper’s is way ahead of Milkpak. Although Milkpak is enjoying the rule
over the market right now. But it should take certain measures quickly to get back in the hunt in promotional
activities as there is a possibility that thay might start losing their share in the market.
 RECOMMENDATIONS

- Olwell’s (low-fat condensed milk from Olper’s) advertising must conform to local values.
Because if they want to expand their business in Pakistan, they would have to consider the
ethical values of the citizens of Pakistan. If the advertisement of Olwell is not perceived by the
consumers as good, then it can have a major affect on the business of Olper’s as well.
- Advertising at the right place; Olwell’s TVC can run during yoga shows in the morning.

- Offer discounts in Ramadan.

- Though their T.V ads are quite wonderful to watch. But still, they are quite expensive & they
should keep in mind now that they have beaten the most of the competition and what is left in
only Milkpak. So now they should not increase their expenditures in advertising in sense of
making more & more ads as it could increase their cost. They should go for quality rather than
quantity. 1 good ad conveying a proper message is better than 5 ads having no logical promotion
of the brand.

APPENDIX

http://www.google.com/

http://www.brandchannel.com/features_effect.asp?pf_id=445

http://www.paksearch.com/Annual/Annual00/NESLE.htm
http://www.amcy5.com/Reports/marketing/amcy11.htm

http://www.amcy5.com/Reports/marketing/amcy11.htm

http://www.scribd.com/doc/15622946/Milkpak

http://www.scribd.com/doc/26145582/Marketing-of-OLPER-s

http://www.nestle.pk/brands/milkpak-cream.aspx

http://www.youtube.com/