PROJECT COMPLETED BY:

Muhammad Nabeel Shahzad Siddiqui

Saad Mahmood Khan

Syed Abbas Haider Abidi

Muhammad Salman Khan

Mihammad Omer Sharif

PROGRAM:

Masters in Business Administration

PROJECT ON:

Marketing Report on “OLPER`s “

PROJECT SUBMITTED TO:

Muhammad Ishaq Sheikh

IQRA University

Masters in Business Administration

Certificate

This is to certify that Muhammad Nabeel Shahzad Siddiqui , Saad Mahmood

Khan, , Muhammad Omer Sharif, Syed Abbas Haider Abidi and Muhammad

Salman Khan have submitted their term report on the “Olper`s Milk” to the

Department of Business Administration.

__________________________________________

Muhammad Ishaq Sheikh

Faculty of Business Administration

ACKNOWLEDGEMENTS

In the beginning all Glory to Allah Almighty by Grace of Whom we were able to

complete our Term Report. It was His will and guidance that we were able to take this

report as a challenge and in the end He bestowed us with his blessings.

Next we would like to thank our parents whose constant efforts and appreciation

encouraged us in every aspect of our lives and InshALLAH will continue to do so.

Our Sincere Thanks to Faculty of Business Administration for supporting us and guiding

us in every phase of our report.

Special Thanks to our Teacher Muhammad Ishaq Sheikh who not only suggested us

this report but also gave us his full support and shared his precious office timings to

discuss different phases of report whenever we needed.

BRAND INTRODUCTION

Olper’s is UHT Milk UHT means Ultra Heat Treatment. In this process the milk passes

through 140 degree centigrade in 3 seconds and then immediately cooled to 20 degree

centigrade in the next 5 seconds, which in turn kills all the bacteria. This is the most

sophisticated and advanced process in the world. At Engro Foods Limited we use the

indirect method of UHT meaning that milk is heated by steam passing through stainless

steel pipes outside milk. All other brands in Pakistan use the direct method of heating

that is by injecting steam in the milk, this adds water content in the milk, where as

indirect heating in fact evaporates water from the milk. This is what makes Olpers the

"Thickest Milk".

BRAND HISTORY

Engro Foods limited (EFL) had only recently been established by Engro a traditional

giant in Pakistan’s chemical and fertilizer industry. EFL launched Olper’s Milk after long

tenure of consumer research, time and money consumption. During this time they

continuously observe the issues with the packed milk. After three years of their launch

Olper’s Milk gain reputation among consumers and now currently holding 49% of

market share. Within the dairy market, company now has a diverse portfolio of products

ranging from different types of cream to premium low fat milk.

The packaged milk category was originated in 1981 by Milk Pak, which 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. By 2006, the dairy milk category was growing at 20 percent annually.

Brands like Milk Pak (owned by Nestle) and Haleeb Milk (owned by Haleeb Foods) had

led the dairy market in the world’s fourth largest milk producing country for nearly two

decades without any real sustained competition. Milk Pak was identified by its green

and white packaging the colors of the country and offered a brand backed with the

strong equity of Nestle. Haleeb was recognized as the blue brand, and professed to

have the “naturally thickest” milk.

Olper’s has woken up the competition. Milk Pak responded with campaigns of its own to

reaffirm the positive equity of its brand. Haleeb implemented a response as well. And

Olper’s starts cutting its market share after competition become fierce.

Olper’s, however, stepped into the foray by launching a massive campaign that

started off with an introductory slice-of-life. Olper’s as a contemporary and modern

brand as the name itself made sound like a foreign brand, giving the perception of

quality. To a large extent, they were successful.

Secondly they did some product changes picking red as the brand color in spite

of greens and blues color, which also helped to enhance the in-store visibility and

presence for Olper’s packaged milk, and disassociation from its competition.

Thirdly they highlighted and expanded upon the various occasions in which milk

could and should use and making it “All Purpose Milk”.

Engro Foods has 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.

Vision

"Our vision is to become a fast expanding giant 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."

BRANDS OF ENGRO FOODS.

21% of all Products

OPLERS (Full cream) TARANG (Tea Whitener) OLWELL (0% fat)

OLPER’S CREAM TARANG (Powder Tea Whitener) OWSUM (Flavored Milk)

OLFRUTE JUICE OMORẼ ICECREAM TARKA 1kg (Aslee Ghee)

STOCK KEEPING UNIT

1000 ML __________________________________________12 Liters 1500 ML __________________________________________12 Liters 250 ML __________________________________________6.75 Liters 500 ML __________________________________________6 Liters

COMPETITION ANALYSIS

MILKPAK

MARKETING SHARE

Loose Milk 96% (Un-hygienic) Packed Milk 4% (Hygienic)

96%

4%

Market Share

Loose MilkPack Milk

PACKED MILK MARKET SHARE:

OLPERS 49%

NESTLE 45%

OTHERS 9% (Haleeb, Good Milk, Day fresh, Nurpur etc.)

49%

45%

9%

Market Share

Olper'sMilk PackOthers

PUBLIC OPINOIN & PERCEPTION

Public like Olper’s due to its availability and rich taste. Olper’s provide good taste in tea

and other dishes which include milk. The other perception is shown in graphs as under:

PERCEPTION ABOUT QUALITY

PERCEPTION ABOUT PACKED MILK

3% 8%

18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Olper’s Milkpak Haleeb

Good Bad

0

10

20

30

40

50

60

70

Nutritious Hygeinic Expensive Easy to use

GRAPHICAL REPRESENTATION

Advertisement. Advertisement in Movies. Preferred TVC’s. Best Packing.

ADVERTISEMENT ADDS IN MOVIES

0%10%20%30%40%50%60%70%80%90%

100%

T.V. Radio Billboards PostersNews paperPeer groupFloat Vehicles

Cable62%

DVD / VCD24%Don't Watch

14%

18

0

20

40

60

80

100

Tally 91 56 62 62 11 18 9

GEO ENT

HUMStar-plus

ARY AajGEO -news

PTV 0%

10%

20%

30%

40%

50%

60%

Haleeb Olpers MilkpakPakola milkGood milk

BEST PACKINGPREFFERD PVC’s

SUPPLY & DISTRIBUTION

Company appoints distributors to reduce risk factors, investment risk, ware house risk

and cost of transport.

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 WEAKNESS!”

EFL 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.

EFL has its own dale and distribution network. EFL has divided Pakistan into five

regions of milk distribution namely: Karachi, Lahore, Islamabad, Multan and Peshawar.

Due to an appealing color scheme, which stands out in the clutter and thanks to EFL’s

strong relationship building and special discounts to retail outlets, Olpers’s has gained

a proper shelf placement in the presence of competitors like Nestle and Haleeb.

EFL DISTRIBUTION CHANNEL

7 Distributors (General Trade).

ICA (International Chain Account).

Makro (10% of total sales).

Metro (10% of total sales).

Food Services.

2 Distributors (10% of total sales).

COMMUNICATION CHANNEL

DISTRIBUTION CHANNEL

PLANT-1 WARE HOUSE-1 KARACHI

WARE HOUSE-2 HYDERABAD

PLANT-2 WARE HOUSE-3 SUKKAR

PRICE

The prices of Engrofoods Olper’s vary according to the size. The prices of the Available Olper’s Packs are shown below.

Pricing Methods/Pricing strategies

The Engrofoods 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 pack sizes.

However, retail outlet uses pricing methods and pricing strategies when selling Engrofoods Olpers.

Pricing methods

Pricing method Explanation of pricing method

Competition-based pricing Engrofoods Olper’s is usually priced below, above or equal to its competitors' prices.

Discount price Olper’s are often marked down during sale periods and special occasions. Like Ramadan this will: Generate sales Increase profits

EFL is pursuing the competitive pricing strategy for its products.

Size(ml) Olper’s(per carton)

1500 7391000 792500 430250 509

RETAILER PERCEPTION

CONSUMER’S REVIEW

SEGMENTING AND TARGETING THE MARKET FOR OLPER’S

It is difficult for any 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 i.e. 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.

Olper’s cream.

DEMOGRAPHIC SEGMENTATION

Olper’s products are not bounded to any particular age, gender or lifecycle. The brand is

meant for all the users of 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 experience 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 experiences 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.

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:

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.

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 nutrition’s 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:

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.

They used the benefit positioning for Olwell. The product is positioned as

delivering the benefit of helping to reduce weight and for healthy bones.

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.

COMMUNICATION AND SALE STRATEGIES

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

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.

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 nutrition’s 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:

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.

They used the benefit positioning for Olwell. The product is positioned as delivering the benefit of helping to reduce weight and for healthy bones.

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.

SWOT ANALYSIS

STRENGTH

ENGRO’S BACK

Olper’s is a brand of EFL. This means that consumers can relate their former Image of

EFL 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.

EFL 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.

In first year, EFL crossed 1.4 billion sales figure which shows customers’ satisfaction

upon EFL’s products. Its taste, quality proposition and world-class quality proposition

system.

STRONG CONSUMER & PRODUCT RESEARCH

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.

WEAKNESSES

OWNING RED COLOR

The company has not owned the color red like Nestle has a green Milkpak; Haleeb has

a blue carton etc. This may create problems because when a consumer enters a

grocery shop, then he/she might have problems in recalling the brand because there is

no color association attached to Olper’s. The company may need to find a suitable color

in which to focus its upcoming marketing strategies.

LOW QUALITY MILK

EFL is not having its own dairy farms; it largely collects loose milk from farmers

through its 40 milk collection centers, which sometimes is of low quality and impure

because they add vegetable oil to milk to get higher prices.

PACKAGING

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.

MILK COLLECTION & DISTRIBUTION COSTS

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.

NARROW BRAND PORTFOLIO

It has been more than a year now, when EFL launched its first dairy product, Olper’s

Milk on March20, 2006. But EFL’s brand portfolio still consists of just 3 products i.e.

Olper’s Milk, Olwell Milk and Olper’s Cream. Whereas its competitors like Nestle and

Haleeb Foods have a much diversified line of dairy products.

OPPORTUNITIES

INCREASED FUNDING BY GOVERNMENT

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.

INCREASED CONSUMPTION OF PLM

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.

AWARENESS

Growing dissatisfaction with loose milk and increasing awareness about health and

hygiene issues have led to increased processed milk consumption.

THIRD LARGEST PRODUCER OF MILK

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 10.8

percent of the GDP. Milk is the largest commodity from the livestock sector accounting

for 51 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.

THREATS

COMPETITION

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.

PERCEPTIONS AND PRICE DIFFERENTIALS

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.

RECOMMENDATIONS:

Before lunching Olper’s Milk, Engro spent a lot of money on advertisement but at that

time Olper’s is well known in the market. So, my recommendation to Olper’s is to reduce

the advertisement budget and this amount should be added to CSR’s budget.

They should start to manufacture powder milk in order to meet the domestic demand

and so that it can be helpful in saving the foreign exchange that is expensed in

importing the powder milk from foreign countries.

CONCLUSION:

Olper’s stand committed to sustainable business growth and ensure the safety of their

people, assets and community in which they operate. They repute as a local giant

actively involved with community welfare in remote areas has also been a positive add

on for Engro Foods. Their direction for the brand (Olper’s) is considered one of the

fastest growing FMCG brands in Pakistan. So, they acknowledge consumers for

improving their product.