Download - Engro Foods Industry Report 1
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ENGRO FOODS INDUSTRY
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 wasnt able to
do so. Therefore, the organization decided to move into a new market. They came
up with several options including telecommunications and power plant but they
found out that the food industry held the greatest promise. Engro Foods has already
set up two processing plants at Sukkur and Sahiwal.
Engro Foods entered the Food business through milk processing and sale with the
companys 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.
Olpers Milk, Companys first brand was launched in March 2006 in 20 cities of
the country simultaneously.
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OLPERS MILK
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. It is the potential to
see a need in the market and the drive to turn that need into profit that defines the
success of a Good Business and Olpers saw that need.
Before them there was Nestle MILKPAK, which was the king of the castle and
Haleeb who was happy to be second best. Businesses sometimes forget and
become too comfortable with given scenarios, they forget strategic vision andanalyzing the market and that is exactly what happened. Companies sometimes
become used to their situation they develop what this writer would put as couch
potato syndrome. A simple example of this would be a household scenario where
the wife is shouting at the husband that you need to mow the lawn and the husband
is all comfy on a couch saying ILL DO IT TOMORROW!
Olpers with huge financials behind them (thanks to ENGRO Foods) came in and
mowed that grass from under the feet of Nestle and Haleeb. In doing so they did
something else that was wonderful; they enticed, they invigorated and delighted
their customers into becoming more health conscious and purchase savvy.
Olpers swept the rug right out from under Haleebs feet and they lost their market
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share and their place as second best. It was an all out war of the worlds and Olpers
came prepared. A barrage of line extensions and big budget spending saw them
become one of the most recognizable brands in Pakistan, and that too in just two
years. Their presence was everywhere on shelves, on billboards you name it!
Olpers was everywhere!
Marketing research
Before the inception of the brand Olpers, AC. Neilson carried out a marketing
research for Engro Foods to determine the viability of the brand name Olpers and
the market readiness through surveys, interviews and focus groups.1200 names
were reviewed and analyzed before Olpers was decided. Olpers is promoted as
the milk for all-purposes. The reason for this is that while conducting research,
they found out that people want milk that could be used for all purposes such as
drinking, tea whiteners etc.
Once the brand was introduced the organization wanted to add more product lines
to it. Therefore they conducted another marketing research to find out the success
of Olpers. The researchers started off with secondary data that was available.
They tried to uncover the level of complexity involved in such a decision and the
magnitude of success. But that wasnt enough so they started to collect primary
data through the use of different techniques.
They first started with survey research to understand the peoples beliefs,
preferences and core needs that can be satisfied by introducing additional products.
The researchers also conducted observational research to observe the people in
different settings. They used it to find out which brand the people really bought,
where did they take more time in purchase process and where did they look when
they were shopping for grocery. This helped them to see the shelf-space that can be
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used. They used the method of shadowing that is they observed people while using
the product. They also conducted unfocused groups where they interviewed a
diverse set of people to explore ideas about the brand and what more they want in
the food sector to be available to people.
The researchers conducted questionnaires to find the responses of consumers about
Olpers. They got a positive feedback from the customers who also encouraged
them to invest further and to setup a new plant in Sahiwal. Through different
research methods the organization was also able to find out the number of
competitors brands.
After the analysis of data researchers present the findings to the decision makers
who pass the final verdict. Due to the positive responses of consumers, the decision
makers decided to go ahead with the idea of introducing more product lines to the
food Olpers brand.
It can be said that successful marketing research helps the marketers to understand
the costumers needs that are still unfulfilled. The four new products of Olpers in
the market are..................Olwell diet milk
Olpers cream
Tarang
Omore
Olpers milk
The organization has further plans to expand more in this sector and introduce
more products related to milk.
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SEGMENTING AND TARGETING THE MARKET FOR
OLPERS Milk
The milk sector shows a market that has homogeneous preferences that is the
consumers have similar preferences.
They want milk to be clear and free from any impurities.
It should be carefully processed
It should be good for health and bones.
Keeping these things in mind, Olpers market has been segmented. The marketers
at Olpers have had a number of options available to them when segmenting themarket for their products.
Demographic Segmentation
Olpers 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 individuals income but lower
class wouldnt 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 Olpers has been positioned as a brand for high
income earners. Due to the income factor involved it can be said that Olpers milk
target a specific social class who are health conscious and concerned about their
weight.
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Psychographic Segmentation
On the basis of psychographics, factors such as personality traits, lifestyles and
values, the marketers at Olpers have segmented the market more towards
achievers who are goal-oriented and focused on their careers, and those who are
seeking variety in the milk sector. For example the ads for Olwell mostly show
achievers who want to be successful, have high aims and are already doing quite
well in their concerned fields. The Olpers products have targeted variety seekers
because the company has given them a new set of brand and so, many will make
their first purchase because they want to try something new. Olpers ads also target
believers, traditional conservative people with concrete beliefs. The ads for Olpers
show the beliefs of healthy life with processed milk and plays on the emotional
aspect more.
Behavioral Segmentation
Olpers 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 thatconsumers should increase their milk consumption for example with every tea they
should use Olpers, every morning they should drink Olpers and everyday they
should feed their pets with Olpers milk.
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jo dil khol kay jeetey hain unheen kay liyay hai Olpers
PLACEMENT AND DISTRIBUTION
According to Mr. Ali Akbar, Director Marketing EFL,
In order to succeed, you should always capitalize on your strengths and never on
your competitors 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 Olpers is available in 80 cities across Pakistan. It reflects
the companys intention to become a big player in the industry, both on a national
and international level. Engro Foods Limited has its own distribution network. EFL
has divided Pakistan into five regions for milk distribution namely:
y Karachi
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y Lahore
y Islamabad
y Peshawar
y Multan
Due to an appealing color scheme, which stands out in the clutter and thanks to the
EFLs strong relationship building and special discounts to retail outlets, Olpers
has gained a proper shelf placement in the presence of competitors like Nestle and
Haleeb.
PROMOTION AND ADVERTISING
Promotional strategy
Olpers have used several promotional strategies like.
Stalls in BAZAAR
The company also introducing stalls in Sunday Bazaar, Tuesday Bazaar and Friday
Bazaar at different location of pakistan and especially to those areas where the
sales volume of the Olpers would be low in order to encourage the consumer.
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Integrated marketing communication:
Company have a complete imc plan in which they that how can the company will
inform their consumer about the new, upcoming product and value added services
to the existing product. The sources which can use by the company to inform their
consumers are print, electronic as well as through their websites.
Unique selling proposition:
Olpers is a trend setter in market.The usp of Olpers is wo log jo khul k jete hai.
They provided their consumer pure milk and this the usp of nestle milkpak.
Advertisements
Olpers launch was, perhaps one of the most aggressive as far as processed liquid
milk (PLM) is concerned, with TVCs, print ads, radio commercials, billboards and
plenty of BTL (below theline) activities including direct consumer and shop
branding activities. Due to this aggressive marketing campaign, the competition
seems to be getting tougher. This can be gauged from the fact that Nestle re-
launched its product packaging and marketing campaign just before Olpers
launch.
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96%
7%
38%
15% 15%
6%12%
0%
0%
20%
30%
40%
50%60%
70%
80%
90%
00%
T.V. Radio Billboards Posters New s paper Peer group Float Vehicles
Medium of Advertising
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Ramadan Campaign
Olpers always had a unique campaign; and it has been 3 years since Olpers
celebrates the spirit of Ramadan. Olpers advert launched in Ramadan 2009 is the
latest example for it. This Ramadan they have has come up with another nice
promotional campaign. They are promoting the Muslim patriotic spirit all around
the world through the most popular Hum Mustafavi Hein song and a message of
Peace for the whole world. The advert features Atif Aslam and DawoodAli. It is
directed by Asim Raza and he has worked fabulously. This ad has been shot in
5different countries I-e Pakistan, Dubai, Morocco, Brunei and Turkey. They have
shown the Muslim rich culture, heritage and beautiful mosques.
Olpers association with religion and cultural heritage grows stronger each Ramzan
as their worth talking about Ramzan Campaign penetrates through the industry
setting a bench mark of gleeful trail for competitors to witness. Their rich hues of
corporate colour and emphasis on cultures across the globe give more meaning and
depth to the brand as a whole. What we see today is a great project execution by
TNBT (The Next Big Thing) to take the Olper's digital campaign to the next level
by going beyond traditional online banners and simple Facebook page
management.
Such unique advertising makes Olpers stand out from the rest of the competition
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thus making it the market challenger in this regard while there seems to be no
direct response or competing campaigns from other brands in the industry of
similar quality. The religious festivities and cultural aspect highlighted generate a
brand rub in terms of the portrayed attributes which eventually have become a
basis of Olpers positioning and therefore much appreciated by consumers.
Therefore, the brand has been very successful in showing Islamic nations as a
united faction where religion builds a strong bond of togetherness and family
values which are significantly highlighted. Their user friendly website opens up
unfurling the corporate colours and takes the user for a journey of engaging
features and advertisement downloads that could be cherished as collectibles.
Similarly, the display of Sehri and Iftar timings and the integration of digital and
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traditional media are worth noticing where Olpers has linked recipes on a local
TV channel and the brand enjoys good product placement.
This Islamic theme integrate in Olpers Ramzan campaign and the digitalized
aspect in its entirety have made the viral impact and positive word of mouth
inevitable and thus more of related campaigns are expected in years to come.
Recently, there has been a growing trend of targeting Muslim consumers around
the globe where brands focus on manufacturing and marketing Halal food and thus
there is a huge Muslim market being talked about these days and how brands are
playing their part in benefitting from it, Islamic Marketing is the term in use and
thus relevant activities increase for this particular month. NewYork Times in its
section Media and Advertising has highlighted various international brands
focusing on the Muslim market and mentioned how Olpers has been doing its
part in terms of Ramzan and how it helps in competing against Nestle.
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COMPETITORS
When Engro Foods launched Olpers Packaged Milk in 2006, many in Pakistans
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% to93% 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.Olpers swept the rug right out from under Haleebs feet and they
lost their market share and their place as second best. Now Olpers market share is
22%.