Olfrute Marketing Strategy Term Project Submission 1

Submitted To: Ms. Mariam Wazirzada

Submitted By:
Aneel Ahmed Khan Aimen Shah Ayyaz Tanveer Hussain Iftikhar M. A. Hanan Rasool Mir Arooj Hassan Natasha Hassan Omair Anwar

2/27/2012

INDUSTRY ANALYSIS
MARKET DEFINITION
The juices market consists of the retail sale of 100% fruit juice (from concentrate), 100% fruit juice (not from concentrate), nectar (25%-99% juice), fruit drink (0-24% juice) and vegetable juice. The market is valued according to retail selling price (RSP) and includes any applicable taxes. Any currency conversions used in the creation of this report have been calculated using constant 2010 annual average exchange rates.

HEADLINES
Fruit/vegetable juice posts total off-trade volume sales growth of 9% and off-trade value sales growth of 16% to reach value sales of PKR1.9 billion in 2010 Fruit/vegetable juice is gaining recognition due to a shift in consumer preference for health conscious products and fruit/vegetable juice is considered to be a healthy beverage in comparison to others Domestic brands enter the market while international brands are also being imported due to high demand Nestl Pakistan Ltd leads with a 23% off-trade volume share, closely followed by Popular Food Industries Ltd with a 20% share Fruit/vegetable juice is expected to grow at CAGRs of 9% in both off-trade volume and constant value terms over the forecast period

TRENDS
There has been an increase in demand for fruit/vegetable juice from health conscious consumers who prefer juice over other beverages, as juices are gaining popularity as a healthy drink. Increasing health awareness has also helped to boost consumption. The most consumed categories include tea and carbonates, but they are known to be unhealthy if consumed in large quantities, due to their content. However, juices are considered to be healthy beverages, alongside herbal drinks. With increased new entrants to the domestic market in 2010, two famous beverage companies, Mehran Bottlers and Engro Food, launched juice brands: Jucina and Olpers Olfrute, respectively. Furthermore, a wide range of international brands from well-known Middle East-based companies like Rani, Lacnor, Al-Marai and Masafi have increased shelf space among superstores and even grocers. Consumers now have a greater variety to choose from. Today, this category offers more variety (mango, apple and red grape are the most popular flavours) than the country has ever witnessed. Unfrozen nectars saw the fastest growth rate in 2010 with off-trade volume growth of 15% because of its wider product variety, different sized packaging, affordable prices

and extensive distribution. Unfrozen nectars are being both domestically manufactured and imported and demand is increasing due to the health conscious consumer who consider such nectars to be healthy as marketed by the manufacturers. The destructive flood situation in Pakistan has affected masses in more ways than just one; economic crisis, being one of the many concerns, has impacted the prices of basic commodities and thereby forced consumers to spend less on items other than those of fundamental need, such as fruit/vegetable juice. Therefore, total off-trade volume sales growth of 9% is lower than any year of the review period. Over the review period as a whole, an off-trade volume CAGR of 14% was recorded, whereas an off-trade volume CAGR of 9% is predicted over the forecast period, which is because of the continued after-effects of the floods and economic situation which has enabled consumers to spend less on non-essential items. A wide variety of fruit/vegetable juices are extensively distributed via both small and large retailers, including grocery and convenience stores. Small grocery retailers have distribution share of 81%. Due to the perishable nature of these products, as compared to other beverages, the logistical concerns play a key role for sales through the off-trade channel. Offtrade sales of fruit/vegetable juice have seen extraordinary growth over the last few years of the review period due to the increasing number of supply chain and logistics companies with increased distribution networks and cold storage capacity. On-trade volume sales reached two million litres during 2010, which marks an increase of 5%. Juice is also gaining popularity on-trade as well due to increasing distribution by international companies products like Slice by PepsiCo Inc distributed by Pakistan Beverages Ltd, which has a huge distribution network nationwide. Shezan International also has a huge distribution network and its juices are available in glass bottle packing as well which targets the semiurban and rural areas and are available on-trade in independent small inexpensive restaurants which are widespread all over the country. Due to increased production costs, the price of packaged products has risen. However, constant unit price faces a decline from PKR86 per litre to PKR82 per litre by 2015, this is because of the shift in buying larger quantity of juices rather than smaller. The cost of products in small packaging is very high, therefore consumers prefer buying larger family packs. The increasing number of juices in Tetra Pak packaging enables consumers to have juices in larger quantities with better quality packaging which increases the life of the product. The key purchasers of fruit/vegetable juice in Pakistan are not just health-conscious consumers but also people of all age groups, but the consumption is higher in urban areas due to awareness. International brands imported and sold at a wide range of prices target the middle- to high-income groups. Fresh and unpackaged juices still have a strong foothold in Pakistan, however, with the introduction of packaged fruit/vegetable juices, there has been a significant shift towards the use of packaged juices in urban areas. The reasons include quality, attractive packaging and successful advertising campaigns from major brands including Nestl. Nevertheless, unpackaged fruit/vegetable juices have their own niche market and are largely sold through numerous small and large speciality juice shops nationwide and are still preferred in semiurban and rural areas.

COMPETITIVE LANDSCAPE
Nestl leads the category with a total off-trade volume sales share of 23%. Followed by Popular Food Industries Ltd with 20% share and Haleeb Foods (Pvt) Ltd with a 17% share. Due to its high-quality products, wide variety, large distribution network and brand reputation these brands lead the category. Its products also benefit from widespread distribution. On the advertising front, Nestl continuously reminds consumers about the great taste and energy boost that its juices provide. Apart from that, Nestle has re-branded it juices as Fruita Vitals. This range includes all its nectars and not from concentrate 100% orange juice. Nestls re-branding campaign highlights the energy-boosting and healthy aspects of the products. Nestl achieved the off-trade value share of PKR400 million in 2010 due to its wide variety of flavours, strong distribution and significant re-branding. Haleeb Foods faces the biggest decline in value share in 2010 because of its poor distribution and the quality of its products along with no advertising during that year. Fruit/vegetable juice is becoming highly competitive with an increasing number of entrants. There was a significant number of product launches in 2010; two of the major launches include Jucina by Mehran Bottlers and Olpers Olfrute by Engro Foods. Both these companies are well-known and have a strong reputation in the market for offering quality products. These brands offer a great taste, quality, simple but innovative packaging with colourful themes and catchy advertising campaigns. In the case of Jucina, Mehran Bottlers placed cars all over Karachi that have a Jucina marketing theme printed all over them to increase brand awareness. Fresher Juice, from Al-Hilal Industries, was the key new launch in 2009 and it has been successful in increasing its off-trade volume share and created a strong image. It offered the unique flavours of strawberry and guava and its juices are packaged in 500ml plastic bottles with a very attractive logo. Tetra Pak packaging is the most common packaging for fruit/vegetable juice among both domestic and international brands, but in order to bring novelty, attractive moulded glass bottles are increasing, for instance Slice by PepsiCo Inc and Fresher Juice by Al-Hilal Industries have adopted this packaging and they have been successful in terms of catching consumers attention.

MARKET VOLUME
The Pakistani juices market grew by 8.8% in 2010 to reach a volume of 16,327.10 thousand liters. The compound annual growth rate of the market in the period 200610 was 10.5%. Table 1: Pakistani juices market volume: million liters, 200610 Year 2006 2007 2008 2009 2010 CAGR 2006-2010 Source: Euromonitor Figure 1: Pakistan juices market volume: million liters, 200610
18.0% 16.0% 14.0% 12.0% 10.0% 8,000.00 8.0% 6.0% 4.0% 2.0% 0.0% 2006 2007 Thousand Litres 2008 % Growth 2009 6,000.00 4,000.00 2,000.00 0.00 16,000.00 14,000.00 12,000.00 10,000.00

Thousand Litres 9,919.90 11,408.60 13,262.80 15,007.10 16,327.10

% Growth

15.0% 16.3% 13.2% 8.8% 10.5%

Source: Euromonitor

MARKET SEGMENTATION
The 100% juice (not from concentrate) is the largest segment of the juices market in Pakistan, accounting for 56.6% of the market's total value. The 100% fruit juice (from concentrate) segment accounts for a further 23.2% of the market. Table 2: Pakistan juices market segmentation I:% share, by value, 2010 Category % Share

100% fruit juice (not from concentrate) 100% fruit juice (from concentrate) Nectar (30%-99% juice) Fruit drink (0-24% juice)

56.6% 23.2% 17.4% 2.8%

Total Source: Euromonitor Figure 2: Pakistan juices market segmentation :% share, by value, 2010

100%

100% fruit juice (not from concentrate) 100% fruit juice (from concentrate) Nectar (30%-99% juice) Fruit drink (0-24% juice)

Source: Euromonitor

MARKET SHARE
Nestl Pakistan Ltd, the is the leading player in the Pakistani juices market, generating a 22.7% share of the market's volume. Popular Food Industries (Pvt) Limited accounts for a further 20% of the market. Table 3: :Pakistan juices market share: % share, by volume, 2010 Market Share 22.7% 20.0% 16.8% 12.9% 27.6% 100%

Company Nestl Pakistan Ltd Popular Food Industries (Pvt) Ltd Haleeb Foods (Pvt) Ltd Shezan International Others Total Source: Euromonitor

Figure 3: Pakistan juices market share: % share, by volume, 2010

Nestl Pakistan Ltd Popular Food Industries (Pvt) Ltd Haleeb Foods (Pvt) Ltd Shezan International Others

Source: Euromonitor

FIVE FORCES ANALYSIS

The juices market will be analyzed taking manufacturers of juices as players. The key buyers will be taken as retailers, and fruit and vegetable growers as the key suppliers. The Pakistani juices market is highly fragmented, with top four players holding 72.4% of the total market volume. Supermarkets and hypermarkets form the most significant distribution channel in the Pakistani juices market, with fragmentation evident in various regions. Buyer power is assessed as moderate overall. Supplier power is not strong, as most inputs are readily available. Product differentiation is limited in the juices market. Moreover, transportation and storage of fresh ingredients remains an expensive proposition. There is a necessity to store the final manufactured product in chilled conditions. Therefore, the threat of new entrants is effectively reduced in the Pakistani market.

RIVALRY
The Pakistani juices market is highly fragmented, with top three players holding 72.4% of the total market volume.. Fruit juices are usually sold in either single portion bottles, generally popular with on-the-go dining, or larger cartons. As there is limited product differentiation in the juices market, players attempt to distinguish their products by a variety of methods. Overall, there is a moderate degree of rivalry in the Asia-Pacific juices market.

Weak

Strong

Intensity of Rivalry
Zero Sum Game Undifferentiated Product Competitor Size 5 4 3 2 1 Storage Costs Lack of Diversity Easy to Expand Hard to Exit

Similarity of Players Number of Players

Low Cost Switching Low Fixed Costs

Source: Internal Estimates

BUYER POWER

In Pakistan, the main distribution channels for the juices market are supermarkets and hypermarkets. Most juices require chilling, which means distributors incur costs in terms of storage and display. Therefore, profit margins of distributors are reduced to a certain extent. Furthermore, for larger retailers, such as supermarkets/hypermarkets, juices are just one of the many products sold, which reduces the reliance upon sales of these items, and increases buyer power. Many players have managed to develop strong brands, which will decrease buyer power as buyers feel obliged to stock products that meet their customer's preferences. Overall, buyer power is assessed as moderate in the Pakistani juices market.

Weak

Strong

Buyer Power
Backwards Integration 5 Undifferentiated Product Buyer Independence 4 3 Tendency To Switch 2 1 Product Dispensability Financial Muscle Buyer Size

Price Sensitivity Oligopsony Threat

Low Cost Switching

Source: Internal Estimates

SUPPLIER POWER
Primary suppliers to the juices market include fruit and vegetable growers, who may sell directly or via wholesalers to manufacturers. Fruit is a seasonal product, which means that supplies from a given geographic area are only available for a short time each year. To allow year-round supplies, growers wait for the best time to pick their fruit and send it to processors where juice is extracted. For the 'juice from concentrate' segment, juice is concentrated and stored until it is needed. Otherwise, juice is bottled immediately after it is squeezed. Suppliers are numerous for these commodities, and are usually relatively small operators, which weakens supplier power. Suppliers in this market have geographical restrictions as fruit growers require a certain climate for their fruits. Players who manufacture a wide range of fruit juices will require a wide geographical supply chain. Additional inputs are bottles and containers; therefore, manufacturers of such products are also classified as suppliers. Overall, supplier power is assessed as moderate in the Asia-Pacific juices market.

Weak

Strong

Supplier Power
Differentiated Input 5 Switching Costs 4 3 Supplier Size 2 1 Importance of Quality/Cost Forward Integration

Player Independence

No substitute inputs

Player Dispensability

Oligopoly Threat

Source: Internal Estimates

NEW ENTRANTS
Players in the Pakistani juices market try to distinguish their products to some extent by stressing their nutritional and health benefits. Although it would be difficult for a new entrant to compete with the brand strength and reach of existing players, it may be possible to achieve small-scale success by stressing a unique production method or nutritional benefits. However, shelf space in retail outlets is finite, and juices often require more costly chilled storage. This means that retailers may be unwilling to substitute new, unproven brands for existing juices, reducing the threat of new entrants. Overall, there is a moderate likelihood of new entrants to the Asia-Pacific juices market.

Weak

Strong

New Entrants
Distribution Accessible 5 Weak Brands 4 Undifferentiated Product 3 2 1 Suppliers accessible Little Regulation Little IP involved Incumbents Acquiscent

Scale Unimportant Market Growth

Low Fixed Costs Low-Cost Switching

Source: Internal Estimates

SUBSTITUTES
Substitutes to the juices market include other non-alcoholic drinks, such as carbonated drinks and bottled water. Fruit juices provide added health benefits over other substitutes as they are high in vitamins, with no fat or added salt. There has been an increasing popularity of 'smoothies' which provide additional benefits compared to regular fruit juices as they are 100% fruit as opposed to being made from just the juice of the fruit. Switching costs for retailers and consumers alike are negligible, as other soft drinks, are similarly priced. Furthermore switching in the sense of allocating more shelf space to substitutes may be advantageous in cost terms for retailers, as most juices are stored in chillers, which require power to run, whereas other substitutes can be stored at room temperature. Consumers can readily make their own juices at home. This allows consumers to be more selective with their choice of inputs, and tailor juices to their own personal tastes. This would tend to reduce demand for commercial products. However, it would also be time-consuming, which may indicate a reduced threat. Overall, there is a moderate threat from substitutes to the Pakistani juices market.

Weak

Strong

Threat of Substitutes
Beneficial Alternative 5 4 3 2 2 1 3 Low Cost Switching 4 Cheap Alternative

Source: Internal Estimates .

PROSPECTS
Fruit/vegetable juice is expected see an increasing number of entrants during the forecast period with increasing awareness of health-related products. The major threats to the current manufacturers in the market are the new entrants, as the category will see increasing competition each year. Due to the number of entrants contributing something new to fruit/vegetable juice, be it taste, flavour or packaging, the market is becoming highly competitive with an increasing number of brands. The competition in the category is between the flavours rather than brands ,therefore, over the forecast period local brands are expected to shift their focus to introducing new and appealing flavours along with improving packaging regularly. The increasing demand for pure juice is driving manufacturers towards offering greater variety in terms of taste and flavour to attract new consumers and maintain the interest of current ones. Fruit/vegetable juice is an emerging category and it is expected to grow at an off-trade volume CAGR of 9%, while 100% juice is going to see increasing off-trade volume growth as it is extracted from natural fruits and vegetables. Due to the increasing health awareness in Pakistan and 100% juices is considered the healthiest of all categories. Nectars is expected to continue to perform well over the forecast period with an off-trade volume CAGR of 13% due to its current position, increasing availability and lower prices than 100% juices. Increased manufacturing and distribution costs and reduced purchasing power will be the main potential threats to growth. Secondary threats to growth may include increased demand for fresh unpackaged juices. Also, the flood situation in the country, which is going to take time

to recover from, may pose a threat to the overall economic rehabilitation and affect the food and beverage industry. Domestic manufacturers have introduced discounts on bulk buys in supermarkets and hypermarkets. During the forecast period, domestic manufacturers are likely to offer discounts on bulk-buying smaller packaging as well, similar to what supermarkets and hypermarkets offer on imported juices; for instance, there are discounts when buying a dozen 150ml Tetra Pak cartons of Lacnor, Al-Marai and Rani. After the launch of Olpers Olfrute by Engro Foods and Jucina by Mehran Bottlers, Nestl will have to continue its product innovation, such as the launch of peach flavour during 2010. During the forecast period Nestl will keep up its marketing and advertising campaigns to maintain its leadership in the market, however, Olpers Olfrute and Jucina are both expected to give Nestl a tough time, as both these products are very similar and available in the same flavours.

Discussion Guide
1. What are the consumption patterns, habits and attitudes towards juices? 2. Brand Awareness/recall? 3. Brand Preference/liking? 4. Usage

Frequency (how many times in a day/week/month etc) Occasion (like breakfast, on the go etc.) BRANDS USED

5. Purchasing

Who buys the product? Consideration factors? (price, freshness, hygiene/nutrition,thirst quencher, flavor/taste, seasonal variation etc.)

6. Reasons for Olfrute not clicking in the market?

Ad recall (awareness level) Ad evaluation/likeness Message conveyed in the ad? What did you not like about Olfrute? (flavors? SKU's? Brand Availability? Pricing? Brand Image? Promotions? etc.

FGD Analysis - Age Group 22 28

Consumers in this age group are young adults, capable of forming opinions and developing brand loyalty. Their likes and dislikes are also shaped by their family, and mostly friends and peers, since a lot of their time is spent with friends, be it at home or outside. It is imperative that their consumption habits and choices be deciphered carefully for two reasons: firstly, this chunk of consumers is a large part of the population of Lahore, and secondly, they have a cornucopia of fruit juices available everywhere, from kiosks to department stores. Our respondents were all consumers of juice. They had tried every juice, e.g. FruitaVitals, Minute Maid, Shezan, Olfrute. All of them liked juices, especially in summer. However, juice consumption was not limited to seasonal preference; in fact, all eight respondents said that if they wanted juice, they would not substitute it with tea or any other beverage! Seasonality played an important role in the choice of flavour only. Juices were primarily viewed as a source of freshness and revitalisation, and not as an energy booster. The perceived order of purity of juices is nectars, plain/fresh juice, and pulpy juices. This was the main reason why Nestle juices were top of mind when asked which juice came to mind first, and not Minute Maid (despite the latter being launched relatively later in the market). Nestles name was further embedded in peoples minds because of its strong brand equity and the quality that it always delivered. Our respondents said that they never questioned or debated on whether to buy FruitaVitals, because of the parent company. Their ads were well-received, gave a familial vibe and appealed to the senses. Ad recall (for Nestle) is at an all-time high, as opposed to Engro Olfrute, because of the revamped packaging and vibrant colours used in the ads. Olfrute had no ads, according to seven respondents. The one respondent, who did recall

an advertisement of Olfrute, could not relate Nadia Jamil strolling among orchards and drinking juice with the idea of freshness and rejuvenation. These people got attracted by advertisements, fancy promotions and referrals (word of mouth). There is no fixed time for drinking juice. Packaged juices are consumed in daily routine with friends, at home and in social gatherings. They are also a popular choice while on the go. 4 out of 8 respondents consumed around 2-4 packs (200ml) of juice per day. Rest had no fixed consumption pattern; they consume 3-4 juices per week but at times they might consume 2-3 packs in a day, depending on their mood. It seemed as if they would prefer convenience over brand name, but despite this, none had ever chosen Olfrute when other options were available. Our respondents were ready to pay PKR 20-25 for a 300 ml SKU of juice. Single serving is more popular. This was not heavy on their pockets, gave value for money, and incentivised daily consumption of more than one or two packs. For a couple of participants, instant sugar high is the main motivator for juice consumption. All of them got their interest stimulated and their taste buds piqued by the concept of exotic nectars and juices such as Guava, Berry, and Peach. This was another reason why Nestle was applauded and liked: it came out with unique and out-ofthe-box flavours. Half of the respondents admitted to consuming juice early morning with breakfast and also with snacks between meals. One of them said: At times I see juices as a replacement for food so yes, I substitute. When asked about their household decision-maker, typically, their mothers, these people replied: Nowadays, our moms grocery list includes buying juices more than carbonated drinks, because even the guests are so choosy. At times they are on a diet. Then it becomes even more difficult, since packaged juices are viewed as having too many artificial ingredients and claims of purity are not easily believed. There is a perception that preservatives are always added in boxed juices. In spite of the above caveat, the FG respondents drew our attention towards the trend that there has been an increase in demand for juices from health conscious consumers who prefer juice over other beverages, as juices are gaining popularity as a healthy drink. All of the eight respondents were aware of Engro, but had always associated it with chemicals. They were fascinated by the idea of Engro branching out into FMCGs, but they had issues with the 4Ps of Olfrute, especially its promotion and placement. They could not differentiate between the positioning of Olpers and Olfrute, due to the white coloured packaging of both. They suggested that a dairy product and a fruity product should not come in a similar looking package. This gives consumers a mixed signal: brand positioning was weak. Packaging plays an important role in purchase. Another problem with Olfrute is that it is not available everywhere. Even if Olfrute somehow commands brand loyalty which is at par with Nestle, its distribution is so bad that they would not be bothered to go and locate Olfrute at some other store. They did not even do that for Nestle, they picked up Shezan Twist or Country juice or Minute Maid instead. Olfrute is not all bad, however. Last year, during the World Cup, on Pakistan Day, Olfrute launched its green cocktail, in a green box. To a nation which is emotionally oriented and a cricket fanatic, this was viewed as a cool, funky, and appropriate move. At the same time, Engro Olfrute made use of viral marketing, by inviting match viewers and juice consumers to post witty comments or tweets and win ipods. However, consumer promotions are not prevalent in the juice industry. They usually go unnoticed. Our FG said if they were promoting Olfrute, they would make use of trade promotions to push the product forward and get more shelf space, as compared to competitors. At bigger stores (like Al-Fatah, Jalal Sons, etc), they would place Olfrute in a more conspicuous manner by having especially designated areas for its freezers and chillers.

Quantitative Research - Retailer Retailer Questionnaire

Questionnaire to be filled by the Interviewer Observations
Q1. Observe and note down which brands are available in the retail outlet. Note down the flavors and SKU sizes. Brands Nestle Fruita Vitals Tops Haleeb Olfrute Shezan Bottles Shezan All Pure Country Fresher Juice Minute Maid Other: ______________ Other: ______________ No. of Flavors ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ No. of SKUs Family Pack Family Pack Family Pack Family Pack Family Pack Family Pack Family Pack Family Pack Family Pack Family Pack Family Pack Personal Pack Personal Pack Personal Pack Personal Pack Personal Pack Personal Pack Personal Pack Personal Pack Personal Pack Personal Pack Personal Pack

Q2. Any POS Material: Posters Hanging Cards Standees Branded Racks Branded Fridges Others (Please Specify): _________________________________________ Q3. Brand Display Name and Location of the Product (ONLY FOR OLFRUTE) Along with other juices Behind the Counter Front of the Shop Out of Sight Displayed on Eye Level? [TICK FOR YES]

[1] [2] [3] [4] [5]

QUESTIONS TO THE RETAILER Q4. What juice brands do you usually keep in our retail outlet? Nestle Fruita Vitals Tops Haleeb Olfrute Shezan Bottles Shezan All Pure Country Fresher Juice Minute Maid Other: ______________ Other: ______________

[1] [2] [3] [4] [5] [6] [7] [8] [9]

Q5. Why do you not carry the rest of the brands? (Check from the list the brands which are absent ) Nestle Fruita Vitals [1] Tops [2] Haleeb [3] Olfrute [4] Shezan Bottles [5] Shezan All Pure [6] Country [7] Fresher Juice [8] Minute Maid [9] Other: ______________ Other: ______________

Q6. Which brands sell the most? Nestle Fruita Vitals Tops Haleeb Olfrute Shezan Bottles Shezan All Pure Country Fresher Juice Minute Maid Other: ______________ Family Pack (1 Ltr.) Personal Pack [1] [2] [3] [4] [5] [6] [7] [8] [9]

Other: ______________

Q7. Incentives given to the retailer-?

Types of Incentives Commission %: Schemes: Credit Lines: Money for POS Others: Nestle ______ ______ ______ ______ ______ Olfrute ______ ______ ______ ______ ______ Shezan ______ ______ ______ ______ ______ Haleeb ______ ______ ______ ______ ______ Country Juices ______ ______ ______ ______ ______ Fresher Juice ______ ______ ______ ______ ______ Minute Maid ______ ______ ______ ______ ______

Q8. Any recent POS activities conducted?

Nestle Olfrute Shezan Haleeb Country Juices Fresher juice Minute Maid

Q9. Do company representatives come for placement checks? How often? [Tick for Yes]
Nestle Olfrute Shezan Haleeb Country Juices Fresher juice Minute Maid

Q10. What is the peak period for sale of juices? Specify months. Q11. Which company has the best ties with you? Why?

Q12. What problems do you face which you would like the companies to resolve for you? Specific to juices.

----------------------------------Thank You----------------------------------

Retail Questionnaire Findings

In all the stores we visited we can conclusively deduce the following information, nestle was present in all the stores with multiple flavours and skus which included a family pack and a personal pack. An important point to note here is that nestle has a distinct advantage over all other competing brands with their extensive distribution system hence our findings suggest that nestle has a 100% brand availability in all the stores we visited. On average each store possessed 6-7 distinct flavours (variants) of nestle and this was the maximum number of variants offered by any brand available in the juice category. As per this analysis Neslte can safely be assumed to be the market leader in the category with respect to its outreach and availability. But nestle is closely followed by brands like country, shezan and fresher who are also readily available In the market, Olfrute presence on the other hand was rather scarce in the market and this shortage was attributed to low demand by the consumers as per the retailers. We dont keep what doesnt sell were some common remarks by the retailers. They did not receive a positive response from the consumers and hence did not risk keeping the almost certain dead stock of a brand like Olfrute. This low demand can be linked to the consumer survey analysis which shows us that there is weak exposure and preference for the brand on behalf of the consumers. We know that Engro Foods is relatively new and that has to create a strong brand base for most of its products. In order to capture the intended target market they need to build consumer confidence and trust so that Olfrute can penetrate the juice market. This highlights the point which we alluded to earlier where Olfrute did not have a credible share of mind or share of heart. The consensus amongst the retailers was unanimous where majority of the retailers stated that they had nestle present in their stores as opposed to brands like tops, haleeb, and alfrute which had negligible sales which is why the retailers refrained from setting up their stalls, coupled with the fact that certain distributors especially for olfrute did not cater to kiryana stores or sec B stores and these blemishes can be attributed to their defective distribution system where they did not feel the need to opt for a mass distribution system. Ironically nestle the market leader has adopted the exact same strategy which led to their meteoric rise and are now considered a household name in the juice industry. An important point to note here is that even though demand for juices is primarily seasonal nonetheless nestles sales are stable all year round (especially in the off season). Unfortunately the same cannot be said about the competing juices whose demand is sporadic all year round. With the following premise in mind the retailers divulged pertinent information when they revealed that in the off season (current winter season in which the research is being conducted) all the juice manufacturers opt against point of sale activities, rather companies such as nestle stress on brand recall where the frequency of their ads is not of utmost importance and is considered secondary where the focus is on making sure that the consumers have a high recall rate leading to higher sales. This can be linked to the consumer survey analysis of brand recall. When asked about the brands they could recall, the consumers showed a weak response towards Olfrute who apparently could not market themselves effectively. The above discussion was from a consumer perspective and how they add to the trends in the market. What distinguishes nestle from other brands in the supply side perspective is a strong supply chain management policy which is evidently unmatched by their competitors at all levels. Not only does Nestle have a strong distribution channel which enables the brand to penetrate the market at various levels, they have an intimate relation with their retailers. The high market demand gives Nestle a strong bargaining power over its forward linkages and this is reflected by the weak profit margins which they allow to their retailers. But Nestle has not tried to monopolize

their position over their supply chain members. They try to compensate the weak profits by giving various other incentives such as credit lines and bonus schemes. Unlike its competitors, Nestle takes care of its chain members. This is point of paramount importance for the retailer is that they are provided with state of the art refrigerators with ample storage space which allows the retailers to stock and indirectly market their jucies in a positive manner which is a win win situation for both the retailers and consumers alike. The purpose of discussing the market leader Nestle was to give a fair view of the successful customer (retailers and supply chain managers included) centric approach adopted by the company which has helped them in capturing, sustaining and growing their target market. The lessons that Olfrute needs to take out of this include building the consumer trust (most importantly!), work on its distribution and availability, and to gain the retailer confidence if it wants to successfully enter and compete in the Juice category.

Quantitative Research - Consumer Consumer Questionnaire

Questionnaire to be filled by the Interviewer Screener Section
S1. When was the last you drank juice? Today Within this month More than a month ago Continue Interview Continue Interview Terminate Interview

Main Questionnaire
Q1.What kind of drinks do you consume the most: Carbonated drinks (fizzy drinks) Energy drinks Pure Juices Saturated Juices Fresh Juices Consume the Most [1] [2] [3] [4] [5] Preference [1] [2] [3] [4] [5]

Q2.What is the FIRST brand that comes to your mind when you think about Juice: (select one) Nestle Fruita Vitals [1] Tops [2] Haleeb [3] Olfrute [4] Shezan Bottles [5] Shezan All Pure [6] Country [7] Fresher Juice [8] Minute Maid [9] Other: ______________ Other: ______________ Q3.Which advertisements come to your mind FIRST when you think about juices: (Select one) Nestle Fruita Vitals Country [1] [7] Tops Fresher Juice [2] [8] Haleeb Minute Maid [3] [9] Olfrute Other: ______________ [4]

 Shezan Bottles Shezan All Pure

[5] [6]

Other: ______________

Q4.Which brand of juice do PREFER the most: (select one) Nestle Fruita Vitals Tops Haleeb Olfrute Shezan Bottles Shezan All Pure Country Fresher Juice Minute Maid Other: ______________ Other: ______________ Q5.Which brand of juice do you mostly CONSUME: (select one) Nestle Fruita Vitals Tops Haleeb Olfrute Shezan Bottles Shezan All Pure Country Fresher Juice Minute Maid Other: ______________ Other: ______________ Q6. How many packs/ glasses of juice(s) do you consume: 1 per day 1 per week 1 to 5 per day 5 to 10 per week

[1] [2] [3] [4] [5] [6] [7] [8] [9]

[1] [2] [3] [4] [5] [6] [7] [8] [9]

[1] [2] [3] [4]

Q7. During what part of your day do you mostly drink juices? On the go (randomly) [1] Breakfast [2] After sports [3] Others (Please Specify): ____________________________________________________

Q8.Reasons for drinking juices? (prompted response) [1] Energy booster [2] Adding nutrition/vitamins to your diet [3] Substitute for a meal [4] Part of a quick snack [5] Refreshing Others (Please Specify):______________________________________________________ Q9. How planned is the grocery shopping for your household? [1] Ad hoc basis [2] Weekly [3] Bi-Monthly [4] Monthly Others (Please Specify):____________________________________________________ Q10. Is the purchase of packaged juices included in your grocery shopping? Yes [1] No

[2]

Q11.Who is the chief decision maker for purchase of juices? [1] Myself [2] Mother [3] Wife [4] Kids Others (Please Specify):____________________________________________________ Q12. Which factor is the most influential when deciding to purchase a juice?(Select one) [1] Price [2] Nutritional value [3] Availability [4] Visibility [5] Freshness [6] Flavor/Taste [7] Brand image/Reputation of the brand Other (Please specify):_______________________________________________________

Q13.Please pick the words from the list below which most appropriately describes the following brands in YOUR opinion: Olfrute Shezan Fresher Minute Haleeb Country Nestle Maid A Fresh [2] [3] [4] [5] [6] [7] [1] B Healthy [2] [3] [4] [5] [6] [7] [1] C Young [2] [3] [4] [5] [6] [7] [1] D Active [2] [3] [4] [5] [6] [7] [1] E Unique [2] [3] [4] [5] [6] [7] [1] F Outdoorsy [2] [3] [4] [5] [6] [7] [1] G Family [2] [3] [4] [5] [6] [7] [1] H Masculine [2] [3] [4] [5] [6] [7] [1] I [2] [3] [4] [5] [6] [7] [1] Feminine J [2] [3] [4] [5] [6] [7] [1] Friends K National [2] [3] [4] [5] [6] [7] [1] L [2] [3] [4] [5] [6] [7] [1] International Q14.Have you ever consumed OLFRUTE? Yes [1]

No

[2]

Q15.Do you remember any advertisement of Olfrute? [1] TVC [2] Print Ad [3] Radio Ad Text message [4] Facebook [5] Billboard [6] Other (Please Specify):________________________________________________________ Q16.What is your most preferred medium of advertisement? [1] TVC [2] Print Ad [3] Radio Ad Text message [4] Facebook [5] Billboard [6] Other (Please Specify):________________________________________________________

Lifestyle Q17.To what extent are you involved in the following activities? Not at all Least Somewhat Involved Involved Involved Sports [1] [2] [3] Watching TV/Movies [1] [2] [3] Exercising [1] [2] [3] Out going [1] [2] [3] Socializing Online [1] [2] [3] Reading Books [1] [2] [3] Travelling [1] [2] [3] Online Gaming [1] [2] [3] Spontaneous Plans [1] [2] [3] Demographics Q18. Age: 15 to 20 years 21 to 25 years 26 to 30 years 31 to 35 years 36 to 50 years 51 years and above Q19.Gender: Male Female Q20. Monthly Income Rs: Less than 40,000 41,000 to 60,000 61,000 to 80,000 81,000 and above [1] [2] [3] [4] [5] [6]

Involved [4] [4] [4] [4] [4] [4] [4] [4] [4]

Highly Involved [5] [5] [5] [5] [5] [5] [5] [5] [5]

[1] [2]

[1] [2] [3] [4]

Quantitative Research Findings

50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2.0% 34.0% 44.0%

Market Share of Growth Beverage Category Wise

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Fresh Juices Packaged Juices Energy drinks Carbonated drinks Male 26.9% 26.9% 0.0% 46.2% Female 12.5% 41.7% 4.2% 41.7% 46.2% 41.7% 26.9% 0.0% 41.7% 12.5% 26.9%

4.2%

Carbonated drinks Packaged Juices

Energy drinks Fresh Juices

We can deduce from the following information that carbonated drinks are the most frequently consumed drinks closely followed by packaged juices where as the fresh and energy juices donot have a high share of throat. Of the total market carbonated consumption is Almost the same for both males and females but the same cannot be said for fresh juices where the consumption patterns for male is more than double as compare to their female counterparts.

Preferred Beverage Category

40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Packaged Juices Fresh Juices Carbonated drinks Energy drinks

Preferred Beverage Category

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Fresh Juices Packaged Juices Energy drinks Carbonated drinks Male 46.2% 15.4% 0.0% 38.5% 38.5% 4.2% 20.8% Female 25.0% 50.0% 4.2% 20.8% 15.4% 0.0% 50.0% 46.2% 25.0%

Of all the aforementioned beverages above the most preferred beverage type is the fresh juice category followed by packaged juices along with carbonated drinks, lastly the energy category has a miserly 2-5 % preference rate. An overwhelming majority of the males consume fresh juices whereas the majority of the females prefer packaged juices probably because of convenience.

Share of Mind
90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Nestle Fruita Vitals 8.0% 8.0% Minut e Maid 8.0% 6% Other s 6% 78.0% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Others

Share of Mind

Male 8% 15.4% 7.7% 69.2%

Female 4% 0.0% 8.3% 87.5%

Count ry 8.0%

Minute Maid Country Nestle Fruita Vitals

Total 78.0%

Nestle comprehensively beats it competitors when it comes to share of mind with colossal margins reaching 78 % as opposed to country and minute maid with a miniscule 8% each. More females prefer nestle as opposed to males.

Ad Recall
70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Nestle Fruita Vitals Olfrut e 22.4% 6% Other s 6% 22.4% 12.2% 59.2% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Minute Maid Minut e Maid 12.2% Others Olfrute Nestle Fruita Vitals

Ad Recall
11.5% 8% 15.4% 65.4% Male 11.5% 8% 15.4% 65.4% 13.0% 4% 30.4% 52.2% Female 13.0% 4% 30.4% 52.2%

Total 59.2%

Nestle has the highest brand recall of all the juices in the market this can be attributed to their extensive ad campaign which is on air year in year out followed by OLFRUIT and minute maid. More males tend to recall nestle ads as compared to female. More female remember olfrute ads reason being the ads were aired mostly during soap operas which has a female fan following

Share of Heart
80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 4.0% 2.0% 4.0% Nestl Shez e Minu Fruit Olfru an Coun te a te Bottl try Maid es Vital s 16.0% 74.0%

Share of Heart
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Minute Maid Country Shezan Bottles Olfrute Nestle Fruita Vitals

Male 26.9% 3.8% 3.8% 3.8% 61.5%

Female 4.2% 4.2% 0.0% 4.2% 87.5%

Total 74.0% 4.0% 2.0% 4.0% 16.0%

This graph shows us that of all the juices in the market nestle has the most loyal customers. More females tend to consume nestle.

Consumption Timing
80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% On the go (randomly) Breakfast After sports

Consumption timing
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% After sports Breakfast On the go (randomly) Male 7.7% 3.8% 88.5% Female 4.2% 33.3% 62.5%

Majority of the people drink juice on the move while a distinct minority people consume juice while having breakfast. Males tend to prefer to the beverages after playing sports where as females prefer to drink juice after having breakfast and this is primarily due to health and fitness reasons.

Usage Timing
45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Refreshing Adding nutrition/vitamins to your diet Substitute for a meal Part of a quick snack Energy booster

Usage Reasons
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Refreshing Part of a quick snack Substitute for a meal Adding nutrition/vi tamins to your diet Energy booster Male 34.6% 19.2% 7.7% Female 50.0% 20.8% 4.2%

34.6%

25.0%

3.8%

0.0%

Most people drink juices to provide them with added nutritions to their diet but the vast majority drink juice because of its freshness. And if we segregate it by gender we can safely assume that more females find the juices refreshing where as more males believe that the juice provides them with added nutrirnts.

Grocery Shopping Behavior

100%

Grocery Shopping Behavior

40.0% 36.0% 35.0%

80% 30.0% 60% 25.0% 20.0% 20.0% 40% 15.0% 20% 10.0% 5.0% 0% Monthly Bi-Monthly Weekly Ad hoc basis Male 38.5% 7.7% 30.8% 23.1% Female 33.3% 25.0% 25.0% 16.7% Total 0.0% Ad hoc basis 20.0% BiMonthl Weekly Monthl y y 28.0% 16.0% 36.0% 16.0% 28.0%

A significant majority of the people buy their groceries on a monthly basis and if we delve deeper into the numbers more males buy juices as compared to females which grocery shopping.

Is The Purchase of Packaged Juices A Part Of Grocery List?

100% 80% 60% 40% 20% 0% NO YES Male 26.9% 73.1% 73.1% 54.2% Female 45.8% 54.2% 26.9% 45.8%

Is The Purchase of Packaged Juices A Part Of Grocery List?

70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% YES NO 36.0% YES NO 64.0%

The results show us that the purchase of juice is pre planned and that buying juices are part of their grocery shopping. Surprisingly more males opt for buying juices in their routine grocery shopping as compared to females.

Chief Decision Makers

100% 12.0% 8.3%

Chief Decision Maker

70.0%

60.0% 75% 29.2% 32.0% 50.0%

59.2%

50%

40.0% 30.6% 30.0% 62.5% 20.0%

25%

56.0%

10.0% 0% Kids Wife Mother Myself Male 0.0% 12.0% 32.0% 56.0% Female 8.3% 0.0% 29.2% 62.5% 0.0% Mysel f Moth er 30.6%

6.1%

4.1%

Wife 6.1%

Kids 4.1%

Total 59.2%

A vast majority of the people purchase their own juices for both males and females.

Purchase Factors
70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 58.0%

12.0% 2.0%

6.0%

6.0%

6.0%

10.0%

Price

Brand image/Re Nutrition Availabilit Flavor/Ta putation Visibility Freshness al value y ste of the brand 12.0% 6.0% 6.0% 6.0% 58.0% 10.0%

Total

2.0%

Flavor followed by nutritional value and brand image are the major purchase factors why people go for a certain type of juice.

Trial
100% 80% 60% 40% 20% 0% Female Male 61.5% YES 58.3% 61.5% 38.5% NO 41.7% 38.5% 58.3% 41.7% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% YES

Trial

YES NO

NO

A majority of people have tried Olfrute of which majority are males.

80.0% 100% 70.0% 90% 60.0% 80% 70% 50.0% TVC 40.0% Print Ad Radio Ad Facebook 30.0% Billboard None 20.0% 20% 10% 0% 10.0% None Billboard Facebook 0.0% Radio Ad Print Ad TVC 60% 50% 40% 30%

Ad Recall
8.3% 23.1% 3.8% 3.8% 0.0% 7.7% 4.2% 0.0% 8.3% 4.2%

75.0% 61.5%

Male 23.1% 3.8% 3.8% 0.0% 7.7% 61.5%

Female 8.3% 4.2% 0.0% 8.3% 4.2% 75.0%

Majority of people remember the TVC of Olfrute of which more males recalled it when questioned as compared to females.

Preferred Adv Medium

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Billboard Facebook Print Ad TVC 3.8% 15.4% 0.0% 12.5% 4.2% 12.5%

80.0% 70.0% 60.0% 50.0% 40.0% TVC Print Ad Facebook Billboard

80.8%

70.8%

30.0% 20.0%

1 3.8% 15.4% 0.0% 80.8%

2 12.5% 4.2% 12.5% 70.8%

10.0% 0.0%

Majority of people prefer TVC as the preferred advertisement medium.

Activities (Sports)
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Highly Involved Involved Somewhat Involved Least Involved Not at all Involved

40.0% 35.0% 30.0% 25.0% 20.0% 15.0% Not at all Involved Least Involved Somewhat Involved Involved Highly Involved 0.0%

1 15.4% 26.9% 38.5% 15.4% 3.8%

2 4.2% 0.0% 37.5% 20.8% 37.5%

10.0% 5.0%

There is no apparent link between sports and juice consumption. We cannot conclusively establish a relationship between the sporting activities of males and females to the juice consumption

Activites Watching Movies

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Highly Involved Involved Somewhat Involved Least Involved 23.1% 7.7% Male 30.8% 38.5% 23.1% 7.7% 29.2% 8.3% Female 33.3% 29.2% 29.2% 8.3% 38.5% 29.2% 30.8% 33.3%

40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Not at all Involved Least Involved Somewhat Involved Involved Highly Involved

There is no apparent link between watching movies and juice consumption.

Activity (exercise)
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Highly Involved Involved Somewhat Involved Least Involved Not at all Involved

40.0% 35.0% 30.0% 25.0% 20.0% 15.0% Not at all Involved Least Involved Somewhat Involved Involved Highly Involved

Male 19.2% 19.2% 23.1% 30.8% 7.7%

Female 0.0% 12.5% 45.8% 33.3% 8.3%

10.0% 5.0% 0.0% Not at all Involved Involved Somewhat Involved Highly Involved Least Involved

People who exercise are less inclined towards juice consumption.

50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%

15 to 20 21 to 25 26 to 30 31 to 35 36 to 50 51 and above

Various age groups were questioned regarding juice consumption patterns as shown above.

Perceptual Map

Basis of Perceptual Mapping:

Fresh 50% 16% 8% 22% 12% Healthy 46% 18% 4% 10% 6% Young 26% 10% 4% 16% 10% Family 32% 4% 24% 4% 28%

Nestle Olfrute Shezan Fresher Country

The lines connecting each brand in respective quadrants represent the inclination of the brand. For example, Shezan and Country juices are viewed as family brands, Fresher Juice is oriented towards freshness and youngsters, whereas, Nestle has an overall lead in the market on all the aspects being covered. Olfrute is considered mostly as a healthy juice, primarily due to the health focused launch campaign.