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Case Study of Engro Foods Limited

By maham3184 Feb 25, 2013 2614 Words
Contents

INTRODUCTION2
INTRODUCTION OMORÉ6
1.DEVELOPING MARKETING STRATEGIES AND PLANS7
2.CAPTURING MARKET INSIGHTS11
3.CONNECTING WITH THE CUSTOMERS12
4.BUILDING STRONG BRANDS13
5.SHAPING MARKET OFFERINGS14
6.DELIVERING VALUE18
7.COMMUNICATING VALUE18
8.CREATING LONG TERM GROWTH19

INTRODUCTION
ENGRO FOODS
Engro Foods Limited was officially launched as a fully owned subsidiary of Engro in 2004. Using dairy as a stepping stone to enter into the food business, the Company has established state-of-the-art processing units in Sukkur and Sahiwal, along with an ice cream production facility in Sahiwal. Top quality brands like Olper’s, Olwell, Tarang, Omore and Owsum have been successfully launched under the helm of Company’s dairy products. To support these brands and their highest standards of quality, Engro Foods has invested heavily in milk processing and milk collection infrastructure. Engro Foods now plans to venture beyond the dairy sector. In this pursuit, grain and fruit markets have been analyzed in great detail. Engro has launched its new brand in fruit juices called as Olfrute. Engro Foods’ vision is “Elevating Consumer Delight Worldwide” and the Company aims to generate a significant portion of its revenue from foreign operations. MISSION STATEMENT

Our mission is to help farmers maximize their farm produce by providing quality plant nutrients and technical services upon which they can depend. To create wealth by building new businesses based on company and country strengths in Petrochemicals, Information Technology, Infrastructure and other Agricultural sectors. In pursuing the mission we shall at all-time be guided in our conduct and decision making by our Core Values.” CORE VALUES

* Leadership
* Innovation
* Diversity and International focus
* Quality and continuous Improvement
* Candid and open communications
* Individual growth and development
* Enthusiastic pursuit of profit
* Ethics and integrity
* Safety, Health and Environment

CORE COMPETENCY
The core competency of Engro Foods is that they have already established relationships with farmers through Engro fertilizer and they have their own supply of dairy products.

BRAND PORTFOLIO

Sheer indulgence in every sip comes only with the rich creamy thickness of Olper's. Give your day a fresh start with Olper's!

Embrace the lighter side of milk and feel years lighter with our low-fat milk Olper's lite, for a guilt-free existence!

Savor the flavor of tradition and enjoy the rich, aromatic flavors of badam, zafran and rose in every sip of milk with Olpers' flavored milk!

Enhance the culinary experience with Olper's Cream - a rich celebration of life at its creamy best

Experience sheer bliss in a tea-cup with Tarang, our special tea creamer for that perfect cup of tea.

Get nutrition and the best value for money with omung dobala.

Enjoy our heavenly nectars extracted from pure fruits to revitalize you with a much-needed boost, anytime anywhere. Only with Olfrute.

Rise up to a better life with our all-purpose dairy brand Omung available at the ultimate price and in the best quality

A dash of Tarrka in your favorite cuisine is all it takes to bring out the flavor of your food and leave you craving for more.

With its rich, creamy taste, high nutrition content and wide-range of chunky flavors, get more from your ice-cream with Omore!

Enjoy home-made Lassi in the convenience of a Tetra Pak. Refresh your day with our two delicious flavors.

Enjoy home-made Lassi in the convenience of a Tetra Pak. Refresh your day with our two delicious flavors.

INTRODUCTION OMORÉ
OMORÉ Ice Cream is a famous ice cream brand in Pakistan. It is manufactured by Engro Foods Limited. As a brief introduction, Engro Foods Limited is a multipurpose manufacturing company. It was established in 2004 and is mainly involved in the manufacturing and marketing of various industrial and consumer products including dairy products, fruit juices, ice cream, industry, chemicals and rice/agriculture produce. Omore is manufactured by Engro Foods Limited which is a subsidiary of Engro Corporation Limited. Engro Corporation's portfolio consists of seven businesses which include chemical fertilizers, PVC resin, a bulk liquid chemical terminal, industrial automation, foods, power generation and commodity trade. The brand OMORÉ has been well established since 2009. OMORÉ has a fully automatic ice cream manufacturing facility, and has a production capacity capable of producing more than 4.5 million liters of dairy ice cream a year. It is marketed in major cities of Punjab. OMORÉ Ice Cream has initially introduced to limited cities across Pakistan such as Karachi, Islamabad, Multan, Lahore, Sahiwal. Today, the OMORÉ brand is considered to be the favorite in its hometown Lahore. OMORÉ Ice Cream produces a variety of flavors, including chocolate, vanilla, mango, strawberry, orange, kulfi, caramel as well as many more. OMORÉ Ice Cream is one of the few brands in Pakistan to manufacture pure dairy ice cream. After almost 1 years of its launch, Karachi has finally tasted omore. Shaop fascias, round shaped small boards, mobile ice-cream trolleys are very much apparent around the city.

1. DEVELOPING MARKETING STRATEGIES AND PLANS

SWOT ANALYSIS
Strengths * Omore ice cream is a brand of Engro foods which is a well renowned FMCG company in Pakistan. * Engro is also a world renowned company and working in the Fertilizer, IT and Chemicals business. * Omore ice cream is made from fresh milk and cream as compared to Walls which contains fat. * Total Sales of 14,900 million Rs which show Engro foods do a lot of research before and with Omore. This resulted in their ice cream being a huge success. * Omore have the only plant in Pakistan that uses Bactofuge technology to eliminate bacteria and ensure hygiene. * Provide much better ice cream and that too at a lower price than their competitors.| Weakness * Only available in limited areas as compared to Walls which is available throughout Pakistan. * Omore is a new brand in the ice cream market and people do not have much idea if the brand exists. * Most of their advertisements have stirred controversy e.g. their advertisement of the recently launched Nutty Choc bar does not go along with our cultural and religious values. * Engro foods only have a few products in their range as compared to Nestle and * Although Omore have a great range of ice cream flavors they are no match for Walls who have a huge range of flavors and products. * No rigorous publicity of their products as compared to Walls e.g. Walls have huge campaigns when they launch new products.|

Opportunities * There are a lot of opportunities in the ice cream market as there are only a few major players like Walls and Hico. * Omore can always come with new flavors and attract more consumers. * Omore should not limit themselves to departmental stores and groceries. They can open ice cream parlors where people could enjoy their ice cream. * Introduce diet ice cream in Pakistan for people who have diabetes especially elders. * Introduce ice cream in schools and colleges because Pakistan has long summers and people love ice cream especially the youth.| Threats * Walls and Hico have been in the ice cream market for a very long time. It may take some time before people get to know the brand. * New players have entered the market like Gourmet plus private ice cream parlors (Malees, Hotspot, Gelatto Affairs) have sprung up around Pakistan which pose a threat to Omore. * Ice cream is perishable item plus load shedding and electricity failure cause problems and damage the product. * Change in government policies can lead to increase in milk price which would also increase the price of the ice cream. |

TARGET MARKET
Target market of omore ice-cream is mainly
* Families
* Individuals (youth and adults), and
* Children

BCG MATRIX

Star
Omore and Tarang are star products of Engro Foods as the growth rates of these two products are very high. Beside this there market share is also increasing. Both of these products are relatively new to its competitors, but still in this short period there growth rate and market share is incredible. There is a lot of potential in these products and Engro can increase its market share by massively investing in these two products. Investing strategy must be used in order to constant growth, the company must constantly invest to increase current level of their market share.

Cash Cow
Olper is one of the well renowned brands by Engro Foods and this has led to a drastic change in the dairy industry of Pakistan. Before Olper, haleeb and milk pack had the monopoly in the tetra pack diary industry but after the Olper’s success a lot of other brands like good milk, nurpur got into the market. Olper being the third largest milk producer of Pakistan now has a relatively high market share. Olpers’s cream and milk comes under the same umbrella of brand name Olpe.

Dog
Engro launched a brand with the name Olwell with high calcium and low fat. This had a great failure and the market share of Olwell as compared to nesvita. Its sales have started to decrease as compared to previous figures.

Question Mark
At the end of year 2010, Engro food launched its first juice brand name Olfrute. Olfrute has relatively low market share but the growth potential is very high. Olfrute faces a tough competition with the brand name nestle. But it still has chances to increase its market share by investing in Olfrute.

2. CAPTURING MARKET INSIGHTS

COMPETITORS
Direct Competition
Omore faces intense direct competition form well established brands in the market for many years in the ice-cream market. The competitors are; * Walls
* Hicco
* Igloo

Indirect Competition
Due to the opening of Ice cream parlors, families are more prone towards going to these places and thus this leads to indirect competition as in share of throat, which could actually impact omore ice-cream sales. Few of the recent ice-cream parlors are; * Gillato Affairs

* Hotspot
* Snog
* Tutti Fruitty

SUPPLIERS
Omore supply of milk comes from ENGRO’s own Dairy farms. Due to Already established ENGRO fertilizers, Engro has been able to build strong long term relationships with farmers and thus dairy supply is controlled and monitored which gives an edge in delivering value to the final consumer. 3. CONNECTING WITH THE CUSTOMERS

DEMOGRAPHICS
Omore has ice-cream for almost all demographic segments. Take away packs and tubs for families, ice-cream cones for teenagers and cups and ice-pops for children.
Age : All age groups but focus is on youth i.e teenagers.
Income: Caters to almost all income groups.
Population: 70% youth Approx 12.6 million potential.
PSYCHOGRAPHICS
On the basis of psychographics, factors such as personality traits, lifestyles and values, omore has segmented the market more towards achievers who are goal-oriented and focused on their careers, and experiences those who are seeking variety in ice-creams. GEOGRAPHIC

At the start the only market omore served was Lahore. After a year they expanded their business and entered in other cities aswell. Omore covers Punjab side cities more strongly because of its sahiwal factory. Currently the Company is majorly selling in 5 important cities of the Pakistan. * Karachi

* Multan
* Lahore
* Rawalpindi
* Peshawar
PROMOTIONAL STRATEGIES
* Media platforms used print media
* Free sample distribution and Discount offers
* Billboard
* Sponsorships-University events
4. BUILDING STRONG BRANDS

Brand Value
Brand Image

5. SHAPING MARKET OFFERINGS

MARKETING MIX
PRODUCT
Launched in 2009, Omoré's scrumptious range of ice-cream and frozen desserts are a glorious treat for everyone, be it children or adults. With its rich, creamy taste, high nutrition content and wide-range of flavors and formats, Omoré is a delectable ice-cream and frozen desserts brand that seeks to cater to a wide range of consumer groups and taste palettes. PRODUCT VARIETY

Available in more than 30 SKUs including ice-lollies, tubs, bricks, cups, cones, and sticks of different sizes, Omoré has become a household name across Pakistan. BUZZ| FROOZE| DESI|
Caramel Crunch (Cone)| Lick-A-Flavor| Krunch Kulfi|
Strawberry Cheesecake (Cone)| Orange| Plan Kulfi|
Tiramisu (cone)| Jumbo Chochead| Kulfi|
Strawberry bliss (cone)| Chocolate Stick| |
Chocolate crispies (cone)| | |
Chocbar| | |
Caramel Chocbar| | |

QUALITY
Premium ice-cream rich in calcium which is fresh every time and meets hygienic and nutrition standards. PACKAGING
The product packaging and wrappers are high quality and eye catchy also the packaging is incompliance with the value omore wants to provide to its consumers. The Tag line says, The Art of Happiness, which is represented in the bright colorfull wrappers depicting colors of joy and happiness. Provides ingredients and nutrition information on the packaging and contact information for comments and queries.

PRICE
Omore used Market penetration pricing strategy, a new product pricing strategy to keep in view the competition. To capture the market, their pricing strategy is based on “competition based pricing”, the price of its competitor “WALLS” is more or less the same. Product line pricing classifies as:

Frooze – 10, 12, 15, 20 Rupees
Range of Family packs – 105, 120, 150 Rupees
Range of individual ice-creams- 10, 15, 20, 30, 40, 50 Rupees * Almond Affair RS50
* Chocolato Temptations RS50
* Caramel cruch (cone) RS40
* Strawberry bliss (cone)RS20
* Nutty Chocobar (cone)RS20
* Caramel Chocbar RS15
* Orange RS10
* Plain Kulfi RS10

PLACE
CHANNELS
Omore sells directly to the end consumer through retailers and shopkeepers. This is the trend followed by many FMCG’s in Pakistan. LOCATIONS
It is available at large/medium sized and small bakeries, grocery stores and pharmacies in many cities.

PROMOTION
360 MARKETING TECHNIQUE:
Broadcast media
* Ads on television
* Radio ads
* Internet (social networking: facebook)
Print Media
* Vehicle advertising
* Billboards
* Point of sale displays
Advertisements are mostly colorful and corresponds to the ice-cream packing.

6. DELIVERING VALUE

DISTRIBUTION CHANNELS
Manufacture Retailers Consumers

Omore’s distribution channel is direct through retailers from where the end consumers can easily purchase. Omore’s icecreams are available in grocery stores, pharmacies and bakeries. However omore is still developing its retailers and there is long way to go as compared to Walls. Electricity failure is one of the major issue which stops Omore to increase its retailer range as Ice-cream is a perishable product and Electricity failures in at the end of retailers may damage the product and Omore’s Value delivery process is not achieved. 7. COMMUNICATING VALUE

Omore has to communicate adequately to the target market the value embodied by its ice-cream. Omore uses the concept of IMC – integrated marketing communications whereby communicating the same value in all of its communications throughout its value chain. Its Advertisements, billboards, delivery vans, vendors etc all communicate “Art of Happiness’. Omore uses bright colors and uses high quality packing which is better than its competitors. Also the ads and overall communications use the same color scheme of the ice-cream wrappers to communicate a stream lined message to the target audience.

8. CREATING LONG TERM GROWTH

Based on its product positioning, as part of its long-term view, Omore must initiate new-product development and constantly come up with new flavors of ice-cream before the competitors. Omore needs to take into account changing global opportunities that can be cashed in and predicting challenges that can be avoided. Recommendation:

Omore should jump into the ice-cream parlor business where they can provide ice-cream directly to their consumers. Also provide the consumers with the experience of joy through their ice-cream and ice-cream outlet. In view of the competition Walls opened their WALLS PARLOR but it failed because of the product range was the same. Omore can come up with variants of the product and introduce the concept of customized ice-cream and toppings which can turn to be a success keeping in mind the current and future demands.

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