Marketing Plan

Acknowledgments: Firstly, we would like to thank Allah for giving us this opportunity and the resources available to do something productive and making us able enough to complete this project. Without His blessings we would not have been able to come this far. Than our sincere thanks to Ma’am Zeenat Jabbar, for her help, guidance and suggestions throughout the making of this project, they have been very useful in making this report. She helped us find new ways of being innovative and creative and discover and polish the marketing side of us. We would not have realized we had it in us to manage such creativity and stress of deadlines otherwise. This report would not have been possible without her direction, guidelines and cooperation. We are indebted to the persons and the programs that provided data for this report. All the friends who supported us throughout the making of this report, surely it would not have been possible without their assistance as well, considering the fact that all of us live at the hostel. Lastly, we would like to thank our families without whose support, encouragement and prayers, this report would not have been possible.

Executive summary: This report has been written to introduce a new marketing plan for Olper’s milk. As we have noticed, ‘Engro foods’ introduces an entirely new marketing plan for Olper’s milk before each of the holy events I.e. Eid-ul-fitr and Eid-ul-azha. Taking the success of these marketing plans, we have come up with the idea to launch a marketing plan for Olper’s milk to be reinforced in the season of spring and right before the event of “Basant”. “Basant” is the celebration of the season of spring and has become one of the most prominent events that take place in the spring time of the year. Reinforcing Olper’s milk brand in consistency with this season would help us create more brand awareness, brand attachment, increase in sales and eventually rising profits. We start by giving a brief history about Olper’s and how it came into existence. We talk about the corporate structure and organizational hierarchy of ENGRO Fertilizers, its mission statement and the vision. We move further with its goals that it has thought about for Olper’s and eventually the type of organizational culture of the organization. We have discussed the type of marketing that has been used by Engro foods for the launch of Olper’s and what marketing strategies we would be using. We have discussed how we have segmented our target market, on the basis of AIOD framework, along with horizontal and vertical segmentation. We have also analyzed how the consumers of Olper’s milk have positioned the product. We have discussed several perceptual maps too, to know where our product has been placed. We then continue the discussion of our marketing plan by also taking into consideration the SWOT analysis; here we have discussed the strengths, weaknesses, opportunities and threats faced by Olper’s milk and the impact of our marketing plan. We observed the current milk market sitution and then focused on Olper’s in particular. Then we have conducted a PEST analysis, which generally discusses the external factors of the environment, which affect the growth and stability of the product. We also gave a competitor analysis to know where we stand in the market in comparison to our competitors and how our marketing strategy will help us get an edge over our competitors. We, then move forward to discuss what marketing strategies we have used in our plan and at different stages of our product life cycle, that is promoting the product and making consumers aware of Olper’s, using the 4 P’s to the best of their abilities.

Milk market analysis: Pakistan, according to recent statistics, is the third largest milk producing country in the world (32 billion liters per year from 50 million animals, with urban consumption at nearly seven billion liters). However, despite this high ranking, packaged milk, even according to the most optimistic estimates, has a mere four percent penetration. Therefore most of the processed milk companies (PLMCs) have become rather than aggressive in their advertivisng and promotional campaigns, in order to increase their penetration. Thus in the recent months, the milk market has increased their advertising. Everywhere around, either there is a billboard, TVC or a radio jingle promoting a milk brand, it is either Haleeb, Nirala, Pakola, Nurpur and recently it is focused on Olper’s. Although recently Pakistan was facing dire economic conditions experiencing an on and off rise and fall in prices, but the demand of milk was the same and contributed to the PLMCs. Another reason for the increase in the purchase of packaged milk is a growing awareness pertaining to health and hygiene; this factor, coupled with increasing dissatisfaction with loose milk. However, in order to make a noticeable increase in penetration, many challenges and perceptions still have to be overcome by the PLMCs. The least important one, perhaps, is tradition. Milk, even amongst the most urbanised consumers, is synonymous with the early arrival of the doodhwala (milkman) at their home on his trusty bicycle (now replaced by a motorbike), reinforcing the impression that the milk is fresh, natural and straight from the cow. And it is this perception that only loose milk is fresh, and therefore healthy and preservative-free, that has to be overcome, if increased penetration is to occur at a substantial rate.
Another reason it is hard to convert loose milk users to packaged milk is the price difference. In Punjab, because most dairy farms are based there, loose milk is cheap at approximately Rs 24 per liter, while processed milk is priced at approximately Rs 38 per liter. In Sindh, however, the price differential between loose (Rs 28) and processed milk (Rs 38) is only Rs 10.
Though hurdles such as consumer perceptions and price differentials have still to be overcome, the processed liquid milk market looks set to grow. There is a whole world out there to be converted, and it is a huge opportunity for PLMCs. If the economy remains stable for the next five years, penetration will increase at an amazing rate.
CURRENT POSITION ON THE PLC:

Engro foods (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.

Olper’s milk:
Engro Foods, a wholly owned subsidiary of Engro has officially launched its packaged UHT milk, Olpers “All purpose milk” on 20 Mar, 2006, a month ahead of its deadline. Though the launch is no doubt aggressive, we understand that competition has turned even tougher. Engro's first milk product was Olper's UHT whole milk, launched last April in 250ml, 500ml and 1 litre cartons with peel foil closures. It complies with government: regulations stipulating that whole milk should contain a minimum of 3.5 per cent fat.

Brand Name:
Olper’s (a derivative of All-Purpose) on an impulse from its name gives a feeling of being an imported brand and not local one (competition has positioned its products as a drink or to be used for tea). Thus, consumers may perceive this as a high quality and premium priced brand. Brand Positioning:
Olper’s is positioned well with a unique name and color scheme (Red & White) compared to other products in this category (Green, Yellow and Blue). Olper’s success would depend on high trial rates, where the actual product quality would matter more than anything else over the long run.
Brand activation:

1 Marketing * Float Activity * Road Show * Rural Melas * Kiosk Based promotions * Buchat Bazars * Institutional promotions * Free Samplings * MMU * Mohalla Activity * HoReCa Promotions * Mime Shows * Chain store Promotions | | Event Management * Gala * Carnivals * Managing Conferences * Music Concerts * Funfair Value Addition * Banners (Flex, Rexine, Cloths) * Buntings * Posters * New Articles * Vehicle Branding |

Distribution and Shelf placement:
Despite an appealing color scheme, which stands out in the clutter, it would take time for Olper’s to gain a favor from retail outlets for proper shelf placement where Nestle and Haleeb (major competitors) still dominate the shelves.
Marketing Campaign: Although the company’s marketing campaign has been aggressive since the product launch, it was quite successful in breaking the clutter.

Response by competition:
Despite an aggressive marketing campaign, competition seems to be getting tougher. This can be gauged from the fact that Nestle has recently re-launched its product packaging and marketing campaign just before Olper’s launch. One can also see a far greater number of milk advertising bill-boards in the city than seen earlier. We do not see the company contributing dividend income to Engro at least for another 5 years, which would not impact our earnings estimates for Engro.
Joint-Venture:
As per Engro Foods’ CEO, the company is also eyeing a foreign joint venture brand in order to well position its brand in front of an MNC-brand, Nestle. With strong business dynamics (Pakistan being the fourth largest milk producer in the world with merely 4% of the milk being processed), we believe this sector has the potential to attract foreign investment, where the potential foreign investor would be looking at a local partner having strong expertise in supply chain management for milk collection in order to become successful in this business. With a 40-year relationship with farmers, we believe the chances of Engro attracting a foreign equity partner in this business are high in the long run. Investment perspective:
We have raised estimates and lowered our fair value for Engro to PRs164/share (from PRs172/share), by adjusting the 10% rights shares issued and factoring in working capital changes, after having received the detailed accounts for 2005. At the current level, the stock trades at a 27% premium to our fair value, backed by the recent launch of Olper’s and on expectations of Engro receiving approval for gas to set up a new urea plant shortly. SEGMENTATION
AIOD segmentation:
We have based our segmentation on the different age groups of our target market and have grouped them according to their different needs, activities, interest, opinions and demographics. The AIOD framework will be different for each age group. Our main focus was on the needs of the children, old age people, and people with a deficiency of calcium, pregnant women and anaemic people. Needs | Activities | Interests | Opinions | Demographics | Milk is needed for young children to nurture them and keep them healthy. | Playing outdoor games, playing video games, reading books. | Video gamesCartoons Books Internet games. | Milk is tasty when taste supplements are added to it. | It is for the age group from 5 to 13. | | Watching television. | | Milk is needed to become strong. | | | MSN chatting | | | | | Studies | | | |

Needs | Activities | Interests | Opinions | Demographics | Milk is needed by pregnant women to keep their calcium level intact. | Eating RestingSleeping Working | Reading things that will give them more information about healthy babies. | Milk is essential for pregnant women to keep their babies healthy. | For age group of 20 to 40. | | | Finding ways to improve the baby’s health. | It makes your bones strong. | | | | | Gives you more strength. | |

Needs | Activities | Interests | Opinions | Demographics | Milk is essential to old age people to avoid bone degeneration and other possible diseases. | Reading newspaper. | Politics World affairsBusiness Watching television. | Maximum intake of milk should be at the young age to avoid physical problems at the older age. | It is for the age group of 40 to 65. | | Spending time with children and grand children. | | It is a healthy breakfast. | | | Watching news on the television | | Gives you energy. | | | Working. | | | |

Needs | Activities | Interests | Opinions | Demographics | People with calcium deficiency need excessive amounts of milk. | Hanging out with friends.Reading Debates | Watching movies.Listening to music.Photography. | Milk is essential for the health but it is difficult to consume it on a regular basis for somebody who doesn’t like it. | It is especially for the teenagers. | | Spending time on internet. | | Milk is especially needed during the growing age. | | | Chatting with friends on phone. | | | | | Watching TV and movies. | | | |

Needs | Activities | Interests | Opinions | Demographics | People with calcium deficiency need excessive amounts of milk. | Hanging out with friends.Reading Debates | Watching movies.Listening to music.Photography. | Milk is essential for the health but it is difficult to consume it on a regular basis for somebody who doesn’t like it. | It is especially for the teenagers. | | Spending time on internet. | | Milk is especially needed during the growing age. | | | Chatting with friends on phone. | | | | | Watching TV and movies. | | | |

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.

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 experience those who are seeking variety in the milk sector. The Olper’s products have targeted people 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:

1. Packaging of Olper’s milk in red color is 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 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 milk:

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.

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

PEST ANALYSIS

Political/Legal Factors:

Economic Factors:

Inflation rate of Pakistan for the current fiscal year has grown to 7 percent. This thing is really hurting the purchasing power of Pakistani consumers. PLM which is already considered as more costly compared to open milk is becoming out of reach of general public. As a result, there is an increased pressure on PLM companies to either decrease their prices or at least keep prices stable. Moreover, packaged milk industry which each year pays millions of taxes is not being given any relief in terms of taxes by the government. Competition is also increasing with the entrance of new domestic players in the dairy and food sector and plans to increase investments by the already established companies. Nirala, good milk, Pakola are the few names which have recently introduced their dairy product lines in the market. Major textile groups are also diversifying into dairy and livestock business and some of them have even acquired lands to start their business. Leading industrial groups such as Jamal Din Wali Sugar Mills, Dewan Group of Industries and Shakar Ganj Sugar Mills have already made substantial investments in dairy & livestock sectors. In March this year, Nestle Pakistan opened a state-of-the-art milk processing facility in Kabirwala, Punjab. The plant, Nestlé’s largest milk reception facility in the world has a processing capacity of 2 million litres of milk per day.

Socio-Cultural Factors: In order to make a noticeable increase in penetration, many challenges and perceptions still have to be overcome by the PLMCs. The least important one, perhaps, is tradition. Milk, even amongst the most urbanised consumers, is synonymous with the early arrival of the doodhwala (milkman) at their home on his trusty bicycle (now replaced by a motorbike), reinforcing the impression that the milk is fresh, natural and straight from the cow. And it is this perception that only loose milk is fresh, and therefore healthy and preservative-free, that has to be overcome, if increased penetration is to occur at a substantial rate. Over the years, all PLMCs, but especially the two older players, Nestle and Haleeb, as well as Tetra Pak (the company that packages the processed milk) have been making active efforts to convince loose milk users to switch to processed milk. In the last six years, Tetra Pak has launched three major campaigns aimed at changing consumer perceptions. Last year, Tetra Pak’s third campaign, Wohi Dhoodh Aur Kya? (Milk, What Else?) addressed the misconception that processed and packaged milk has preservatives. The campaign talked about the benefits of Tetra Pak’s six-layered packaging material and innovative technology that keeps milk safe for a long time. The highlight of the campaign was the introduction of a buffalo character called, Moomoo, who explained why UHT milk stays safe and hygiene for a long time in a Tetra Pak carton.
Despite these marketing endeavours, perceptions cannot change overnight; this requires patience and continuous investment to educate consumers on the benefits of packaged milk. Every product’s lifecycle consists of an introductory phase, growth phase and maturity phase. It takes time to change attitudes, especially in a culture where the concept of fresh milk is healthier option. Another hurdle in converting loose milk users to processed liquid milk is price. In Punjab, because most dairy farms are based there, loose milk is cheap at approximately Rs 20 per liter, while processed milk is priced at approximately Rs 38 per liter. In Sindh, however, the price differential between loose (Rs 28) and processed milk (Rs 38) is only Rs 10. As a result of price considerations, most PLMCs have not increased prices in the last 5 years. Moreover, Nestle and Haleeb have introduced smaller packages to cater to consumers with limited cash flows, although there is a convenience factor at play here as well.

Technological Factors: In year 2005, the Ministry of Industries and Production established Dairy Pakistan Company on the lines and model of Dairy Australia. The main objectives of the company are as under:

a. To promote milk and other value added dairy products in the domestic as well as international markets.

b. To promote development and up-gradation of dairy supply chain in Pakistan by supporting and facilitating the farmers, processors and other stakeholders across the value chain.

c. To support dairy sector growth by way of supporting and facilitating business development services for the enterprises across the dairy value chain.

d. To initiate and support interventions across the dairy value chain to enhance sector competitiveness through innovations and research.

e. To promote technology development, transfer, assimilation, streamlining, acquiring and/or up-gradation across dairy value chain by undertaking new initiatives.

f. To help introduce international best management practices for better productivity and operational efficiencies.

g. To promote training and skills development of human resources associated with the dairy sector.

h. To help create enabling/supporting/conducive business environment for enterprises operating in the dairy sector and propose new rules/regulations/by laws/standards for providing a level playing field and conducive regulatory environment for the development of sector and propose amendments thereof in any existing rules/regulations/bye-laws/standard in the sector and bring local industry in consonance with international standards.

COMPETIOR ANALYSIS

The External Analysis examines opportunities and threats that exist in the environment. Both opportunities and threats exist independently of the firm. This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats. Competitor profiling combines all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation, implementation, monitoring and adjustment. In formulating business strategy, managers must consider the strategies of the firm's competitors. While in highly fragmented commodity industries the moves of any single competitor may be less important, in concentrated industries competitor analysis becomes a vital part of strategic planning.
Competitor analysis has two primary activities, 1) obtaining information about important competitors, and 2) using that information to predict competitor behavior.

Direct Competitors:

* Haleeb * MilkPak * Nurpur milk * Good milk * Dairy Queen Indirect competitors: * Everyday * Nido Internal competitors: * Tarang * Olwell * Olpers cream Perceptual map

Price

Quality

Key: Star: Olper’s Flower: Milkpak Circle: Haleeb Triangle: Nurpur Milk Rectangle: Good milk Diamond: Dairy Queen