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Table of Contents

Abstract ..................................................................................................................
.................. 4
Milking the
Market: ...................................................................................................................
. 5
Engro Foods’
History ...................................................................................................................
6
Vision ......................................................................................................................
.................. 6
Core
Values .....................................................................................................................
.......... 6
1.
Administration ........................................................................................................
.......... 7
2. Finance and
Accounts ........................................................................................................ 7
3. Human
Resource ...............................................................................................................
7
4.
Marketing ................................................................................................................
......... 7
5. Milk
Procurement ...........................................................................................................
.. 7
6.
MIS ..........................................................................................................................
....... 7
7.
Production ...............................................................................................................
......... 7
8. Quality
Assurance..............................................................................................................
8
9. Supply and
Distribution ..................................................................................................... 8
Marketing Research conducted by ENGRO
Foods ...................................................................... 8
Segmenting and targeting the market for
Olper’s ...................................................................... 10
Demographic
segmentation .................................................................................................. 10
Psychographic
segmentation ................................................................................................. 10
Behavioral
segmentation ......................................................................................................
10
Positioning the
brand ................................................................................................................ 11
Strengths ................................................................................................................
................ 11
1. Engro Group
Support ..............................................................................................................
11
2. PR with
farmers .................................................................................................................
12
3. Positive response from
customers ..................................................................................... 12
5. Strong consumer & product
research ................................................................................ 12
6. Third-Generation
Plant ...................................................................................................... 12
Weaknesses ............................................................................................................
.................. 12
1. Olwell
TVC .........................................................................................................................
12
2. Low Quality
Milk ............................................................................................................... 12
3.
Packaging ...............................................................................................................
........... 12
4. Milk collection & distribution
costs .................................................................................... 13
Opportunities ..........................................................................................................
................. 13
1. Increased funding by
Government ..................................................................................... 13
2. Increased consumption of
PLM ......................................................................................... 13
3.
Awareness ..............................................................................................................
.......... 13
4. Third largest producer of
milk ........................................................................................... 13
Threats ...................................................................................................................
................ 14
1.
Competition ............................................................................................................
.......... 14
2. Perceptions and Price
Differentials .................................................................................... 14
Political/Legal
Factors ...............................................................................................................
14
Economic
Factors ....................................................................................................................
.. 14
Socio-Cultural
Factors ...............................................................................................................
14
Technological
Factors................................................................................................................
15
Product ...................................................................................................................
................ 16
Olper’s
Milk..........................................................................................................................
. 16
Shipping
Units ...................................................................................................................
16
Olper’s
Cream .....................................................................................................................
.. 16
Shipping
Units ...................................................................................................................
16
Olwell Hi-Cal Lo-Fat (HCFL)
Milk ............................................................................................ 16
Shipping
Units ...................................................................................................................
16
Placement &
Distribution ..........................................................................................................
16
Price ........................................................................................................................
............... 17
Promotion and
Advertising ................................................................................................... 27
Post
Mortem ...................................................................................................................
...... 27
Building customer based brand
equity ...................................................................................... 28
Measuring customer-based brand
equity .................................................................................. 30
Managing customer-based brand
equity ................................................................................... 30
Social
Responsibility ..........................................................................................................
........ 30
Education
Programs ..............................................................................................................
31
Katcha
Schools: ..................................................................................................................
... 31
Training and Resource
Centre: .............................................................................................. 32
Sahara Welfare
Society: ........................................................................................................ 32
Health
Programs ................................................................................................................
... 32
Free Snake Bite
Treatment: ................................................................................................... 32
Dialysis Centers at Daharki and Mirpur
Mathelo: ................................................................... 32
Eye Care
Centre: ...................................................................................................................
33
Oncology Unit at Aga Khan University Hospital,
Karachi ........................................................ 33
Tele-Medicine
Project ........................................................................................................... 33
Future
plans .......................................................................................................................
....... 33
Abstract

This report is about the marketing of Olper’s from the time when ENGRO
foods came up with the idea of adding a new product line to their already
well established and long set of product lines to the point that they are still
heavily promoting their product. 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 discuss the types of marketing research conducted by the company
before introducing it to the market and how they have segmented its target
market and positioned the product in the minds of the consumers. We
discuss the SWOT analysis in which we talk about the strengths, weaknesses,
opportunities, and threats the organization is facing since its product was
launched. Then the PEST analysis is generally about how the external factors
affect the growth and stability of the product. We move further to talk about
a variety of marketing strategies employed at different stages of the 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. The report also confers
about the role brand equity played in increasing the sales for Olper’s. Firstly,
there are the various ways employed by the brand managers to build and
measure brand equity and once the customers start to accept it then how
they have managed the brand equity of Olper’s. We conclude the report by
discussing the social responsibilities in which ENGRO Fertilizers is involved
and the future plans of the organization for Olper’s.
Milking the Market:
In the recent few months, it seemed that everywhere one looked, there was
either a billboard, a TVC or a radio jingle promoting a brand of milk – whether
it was Haleeb, Nurpur, Pakola, Nirala, or, recently, Olper’s. But perhaps this
isn’t surprising after all. 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. No wonder
then that processed milk companies (PLMCs) have been rather aggressive in
their advertising and marketing endeavours in an attempt to increase the
penetration. Industry experts believe that the current economic turnaround
has contributed to the growth in the PLM sector, resulting in increased
consumer purchasing power. Another reason for growth is a growing
awareness pertaining to health and hygiene; this factor, coupled with
increasing dissatisfaction with loose milk, has also contributed to growth in
this sector. 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 hurdle in converting
loose milk users to processed liquid milk is price. In Punjab, because most
dairy farms are based there, therefore the difference between the loose milk
and the processed milk is higher compared to Sind. 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.
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.

Vision
"Our vision is to become a fast expanding mega foods company. To achieve
our vision, the company will initially focus on dairy by investing a substantial
amount in plant, milk collection capability and marketing. We are making
concrete efforts to expand in and beyond Pakistan; through strategic
international alliances, to eventually become global."

Core Values

1. Leadership
2. Innovation
3. Diversity and International focus
4. Quality and continuous Improvement
5. Candid and open communications
6. Individual growth and development
7. Enthusiastic pursuit of profit
8. Ethics and integrity
9. Safety, Health and Environment
Departments
1. Administration
Efficient management of all administrative affairs of Engro Foods (Pvt.)
Limited is the job of the Administration department. From legal matters to
general day-to-day operations of the office, the Administration department
ensures that all affairs run smoothly.

2. Finance and Accounts


The Finance and Accounting departments at Engro Foods are responsible for
the total financial management of the different businesses of the company.
From the usual accounting statements and sheets to risk and portfolio
management, the team ensures that every rupee coming into and out of the
Companies' pockets is properly documented and audited.

3. Human Resource
The Human Resource department at Engro Foods (Pvt.) Limited spearheads
the recruitment process to ensure that the finest human resource is taken on
board at Engro Foods. Resumes of candidates are carefully filed and
documented for current or future reference. The department, besides
carrying out succession planning, maintains and implements HR policies
pertaining to employment, retention and superannuation. Assessing training
needs of employees and ensuring adequate training is also carried out by the
professional HR team at Engro Foods.

4. Marketing
Consisting of leading marketing professionals of the industry, who are
graduates of top business schools of Pakistan, the Marketing Department
ensures that from product need identification to product development, launch
and post-launch, all strategic decisions are made based on authentic
information and research. Identifying the target markets, effectively
communicating to them and building the image of the brands as well as the
Companies, is the job of the professionals running the marketing at Engro
Foods.

5. Milk Procurement
As all of our food products are milk based, the entire Milk Procurement
department plays a critical role in defining the quality of the end product that
reaches our customers. Ensuring regular collection of fresh and pure milk
right from the farmer to the factory and ascertaining the freshness of milk all
across the milk procurement process, is the responsibility of Milk
Procurement department, consisting of food technologists working at the
collection centres and veterinary doctors providing service to the farmers.

6. MIS
The MIS department at Engro Foods ensures that all automation is running
error-free at all times. Regularly modifying and updating the Company's
accounting software is also the MIS team's responsibility.

7. Production
Modern technology is part and parcel of Production at Engro Foods. The
state-of-the-art plant set up near Sukkhar has a processing capacity of more
than 300,000 litres of milk per day, making it one of the largest in the
country. Professionally qualified human resource efficiently works night and
day to maintain highest hygiene standards.

8. Quality Assurance
Quality Assurance is strictly followed in Engro Foods. Qualified food
technologists at this department ensure that highest quality parameters are
adhered to through all steps of production and that the products reach the
consumers as per promise.

9. Supply and Distribution


This department ensures timely and effective distribution of the products to
different shops and stores spread all across Pakistan. From transportation
management to obtaining route permits and approvals, is done by this
department.

Marketing Research conducted by ENGRO Foods


Marketing research is an important step when a new product is to be
launched into the market. There are many risks associated with that new
product and especially when a company decides to diversify into a
completely new market that it was not previously catering to. Thus in order to
reduce the magnitude of the risks and to be successful, large organizations
with a research and development department conducts the marketing
research. Even those organizations that do not have a R&D department can
conduct marketing research through other companies that are providing the
facility of marketing research.

One such company is A.C Nielson that carried out the marketing research for
ENGRO foods when the idea of diversifying into a new market was
introduced. Marketing research is the systematic design, collection, analysis
and reporting of data to the relevant parties. ENGRO wanted to setup a new
fertilization plant but due to certain constraints from the government wasn’t
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. It was an exploratory research that is the main goal was to shed
light on the real nature of the problem in this case, diversification into a new
market, and to select possible new solutions and ideas such as the food
industry. They also went though the list of at least 1,200 names before they
decided to introduce Olper’s. Olper’s 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 Olper’s. 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 wasn’t enough so they started to collect primary data through the use of
different techniques. The first started with survey research to understand the
people’s 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 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 Olper’s. 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 loyal of
competitors’ brands. Once all the information has been collected, it is further
analyzed to extract findings from the data.
The researchers used all types of statistical methods such as frequency
distribution to now the number of people buying the brand, average and
measures of dispersions for major variables. They also applied some decision
models for additional findings. 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 Olper’s brand. It
can be said that successful marketing research helps the marketers to
understand the costumers’ needs that are still unfulfilled. The two new
products of Olper’s in the market are Olwell diet milk and Olper’s cream. The
organization has further plans to expand more in this sector and introduce
more products related to milk.
Segmenting Targeting and
Positioning
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. So far company has introduced three new
products: Olper’s milk, Olwell diet milk and Olper’s cream.

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
experiencers those who are seeking variety in the milk sector. For example
the ads for Olwell mostly show achievers who want to be successful, have
high aims and are already doing quite well in their concerned fields. The
Olper’s products have targeted experiencers 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 and Olwell in red color and Olper’s cream packed
in purple color are quite different and distinctive from the typical green and
blue packing used by other competitors.

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 nutritions that are part of milk due to passing through so many
processes. But Olper’s positions itself as milk that has not lost its nutrients.
The unique selling proposition for Olper’s is: Subah Bakhair Zindagi, but
recently the company changed the USP to: Jo dil khol kay jeetay hain
unheen kay liyay hai Olper’s. Both the tag lines have a very positive
impact on Olper’s image because of the emotions involved in both the lines.
The marketers have used different positioning for Olper’s products:

a. 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.
b. They used the benefit positioning for Olwell. The product is positioned as
delivering the benefit of helping to reduce weight and for healthy bones.
c. Olper’s cream is positioned as good for a specific use or application. In this
case the cream can be used to make cake icings and desserts look great.

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

SWOT Analysis
Strengths

1. Engro Group Support


Olper’s is a brand of ENGRO foods. This means that consumers can relate
their former image of ENGRO foods to Olper’s. ENGRO is a well established
brand name in Fertilizer, IT and infrastructure business. The brand is well
known so customers will automatically have a brand association with Olper’s
and see it as a premium quality product. ENGRO is world renowned so it can
easily attract foreign investors in backing it against other competitors such as
Nestle. ENGRO foods can easily afford research and development costs for
Olper’s have in order to introduce new products. It can also distribute the
brand through better channels because of its long term relationship with
distributors in the agriculture sector.

2. PR with farmers
ENGRO has been interacting with the farmers for fertilizers and has gained
quite a good reputation over the years. It has led to a strong bond and long
term relationship with the farmers who are willing to supply milk to the
company. This is an added advantage and strength for the company because
it will never be short of milk production. The farmers also won’t have to look
elsewhere to sell their milk.

3. Positive response from customers


In first year, EFL crossed 1.4 billion sales figure which shows customers’
satisfaction upon EFL’s products. 4. Its taste, quality proposition and world-
class quality proposition system.

5. Strong consumer & product research


Olper’s done a strong consumer & product research before and after
launching the product. This has provided them the perfect launching pad to
eventually emerge as a global player in the food industry. To develop its
future portfolios, EFL has hired various global research partners like AC
Nielsen, Mindshare, JWT Asiatic and MARS marketing and advertising
agencies.

6. Third-Generation Plant
EFL only, has the third-generation UHT milk plant in the country. EFL plant is
the only plant in Pakistan that uses Bactofuge technology to virtually
eliminate bacteria and ensure premium quality and hygiene. Moreover, it is
also setting up another milk processing plant in Central Punjab (Sahiwal) with
an investment of Rs. 2 billion (US $ 33 million).

Weaknesses
1. Olwell TVC
Olwell ad which was based on Western life style, ENGRO foods brand
management showed a man who put off his clothes & remain just in his
undergarments, or half nude lady in a cat walk or men admiring the figures of
a lady in mix gender health club. In this ad they are creating associations
with the brand through the stripes, which is a highlight of Olwell packaging.
Half naked people have been shown with tattoos of the same stripes in order
to show that they are loyal consumers of Olwell. Also, the talent, situations
and locations connects well with the ad to give Olwell a premium positioning.
The brilliant marketing people at ENGRO Foods failed to analyze is that the
market they are targeted the ad on, is Pakistan, where practicing Muslims
reside, who have strong religious beliefs. When making the ad, the brand
managers were focused on, making an ad that should give the brand the
most premium look and feel amongst the target consumers but on the other
hand they were least bothered about the ethics, religious beliefs and cultural
values. However the current ads took the proper lesson and the ads in recent
past are more connected to actual community in Pakistan.

2. Low Quality Milk


EFL is not having its own dairy farms; it largely collects loose milk from
farmers & gwalas through its 40 milk collection centers, which sometimes is
of low quality and impure because they add vegetable oil to milk to get
higher prices.

3. Packaging
EFL is dependent upon Tetra Pak for the packaging of its entire dairy
products. Tetra Pak is the only option available to Olper’s for packaging
because it is having monopoly in the packaging sector in Pakistan. Due to
this reason, Tetra Pak can charge them higher and it could increase the
production costs.

4. Milk collection & distribution costs


EFL’s 34 out of 40 milk-collection centers are located in Punjab, whereas its
only milk processing facility is situated near Sukkhur (Sindh). It increases the
milk collection & distribution cost. The chances of milk getting spoiled also
increases due to long travels.

Opportunities

1. Increased funding by Government


Government has decided to increase farmers’ funding. This is an opportunity
for ENGRO foods because previously due to weather conditions and other
reasons there was lots of wastage of milk but now that can be reduced as
farmers will be better able to store milk for longer time periods.

2. Increased consumption of PLM


Competition may create opportunities for the company because each
competitor in the milk industry wants to increase penetration of processed
liquid milk and so they will create awareness for consumers through different
advertising media. This will ensure the increase in the consumption of
processed milk instead of lose milk and so will in turn lead to increase in
sales for the company. Therefore there will be an opportunity for accelerated
growth.

3. Awareness
Growing dissatisfaction with loose milk and increasing awareness about
health and hygiene issues have led to increased processed milk consumption.

4. Third largest producer of milk


Pakistan is the Third largest producer of milk in the world with a total
production of 32 billion liter of milk a year, whose value is more than that of
the combined value of wheat and cotton, from a total herd size of 50 million
milch animals (buffaloes and cows). Livestock accounts for 46.8 percent of
agricultural value added and about 10.8 percent of the GDP. Milk is the
largest commodity from the livestock sector accounting for 51 percent of the
total value of the sector. Due to the steps taken by the government and
private sector, country’s annual milk production is expected to grow at an
additional 3 billion litres in the next few years. This is quite an opportunity for
ENGRO foods as there is lot of growth in this part of the sector.
Threats

1. Competition
Competition may pose a threat because the company will have to maintain
its leadership in an expanding market so that it doesn’t lose its market share
to its competitors. Competition seems to be getting tougher as a result of
new players entering the dairy market.

2. Perceptions and Price Differentials


Consumers’ perceptions and price differentials can cause a threat for the
company. It is important that Olper’s comes up to the expectations of the
customers and fulfils its conformance quality that is the company meets its
promised specifications. Consumer’s preferences change with time and prices
might create certain barriers in terms of the profit margins for Olper’s. For
example, lose milk is still cheaper than packaged milk and that is also one
factor that people still prefer to buy lose milk.

PEST ANALYSIS
“When the rate of change inside the company is exceeded by the rate of
change outside the company, the end is near.” (Jack Welch, former Chief
Executive Officer of General Electric)

Political/Legal Factors

Economic Factors
Inflation rate of Pakistan for the current fiscal year has grown very high. 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. 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, therefore the difference between the loose milk and the processed
milk is higher compared to Sind.

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/bye-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.
Different initiatives taken by the company, so far, to bring about a White
Revolution in the country are:

a) Farm Cooling Tanks Loan Scheme


A mechanism for the operation of Farm Cooling Tank Loan Scheme has been
proposed and guidelines are being developed for applicants. They will include
standards for quality and hygiene for installation of the tanks and also details
on the testing of the milk being received for composition and quality.

b) Model Farms
The targets for this project were to establish 50 farms by the end of June
2006 and 100 by the end of 2006. An Australian consultant visited Pakistan
for this purpose. First 14 farms in Okara, Punjab have been formally
established as model farms. These farms are generally of medium size and all
supply to Nestle. One model farm has been established in Sindh. Efforts have
been made to identify clusters of farms to be established as model farms at
stage two. It is proposed to work with one group of small farmers who are
currently part of Idara-e-Kissan / Halla and a further group of farmers in Sindh
who currently supply to Engro. In stage three, it is proposed to identify
further farms with probable extension of the programme to NWFP.

c) Other Policy Interventions


Draft Quality Standards are being worked on by a SWOG group who has
provided the first draft paper for discussion with stakeholders. It is necessary
to open a dialogue with PSQCA, PSI and other interested parties to progress
the establishment of Food Safety Standards. Work is also being undertaken to
establish a case for zero rating Dairy Products for sales tax.

Product
Olper’s Milk
Launched on March 20, 2006, Olper’s milk is EFL’s standardized and
homogenized pure UHT (Ultra heat treated) milk with 3.5 % fat and 8.9 %
solid non-fats. It is EFL’s premier brand, and the choice of quality-conscious
consumers who only go for the best. It is available in easy-to-open, 6-layered
Tetra Pak Brick Aseptic red packaging and comes with a 3 months shelf life.

Shipping Units
1 Litre (1000 ml ) : 12 packs per carton
½ Litre (500 ml) : 12 packs per shrink-wrapped tray
¼ Litre (250 ml) : 27 packs per shrink-wrapped tray

Olper’s Cream
The premium cream processed hygienically from pure fresh milk, Olper’s
Cream is luxuriously rich in its thickness & nutritional value. It promises the
richest & scrumptious assortment of tempting toppings, delicious desserts
and creamiest coffee with its unique taste, also great for eating with bread
etc. It was launched on September, 2006 and comes in 6-layered Tetra Pak
Brick aseptic purple color packaging with 6 months shelf life.

Shipping Units
¼ Litre (250 ml) : 27 packs per shrink-wrapped tray
Olwell Hi-Cal Lo-Fat (HCFL) Milk
Launched on December 15, 2006, Olwell is a low-fat, high-calcium milk with
the richness of pure milk. It is an ideal choice for weight-watchers and heart
patients. It is also high in calcium content, which prevents osteoporosis.
Packed in 6-layered Tetra Pak Brick Aseptic red packaging with easy-to-open
plastic cap, it comes with a 3 months shelf life.

Shipping Units
1 Litre (1000 ml ) : 12 packs per carton
½ Litre (500 ml) : 12 packs per shrink-wrapped tray

Placement & Distribution


According to Mr. Ali Akbar, Director Marketing EFL, “In order to succeed, you
should ALWAYS capitalize on your STRENGHTS and NEVER on your
COMPETITOR’S WEAKNESS!”
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 Olper’s is
available in 80 cities across Pakistan. It reflects the company’s intention to
become a big player in the industry, both on a national and international
level. Engro Foods Limited has its own dales and distribution network. EFL
has divided Pakistan into five regions for milk distribution namely: Karachi,
Lahore, Islamabad, Peshawar and Multan. Due to an appealing color scheme,
which stands out in the clutter and thanks to the EFL’s strong relationship
building and special discounts to retail outlets, Olper’s has gained a proper
shelf placement in the presence of competitors like Nestle and Haleeb .

Price
EFL IS pursuing the competitive pricing strategy for its products. In
competitive pricing the price of the product is determined considering the
price of major competitors like Nestle, Haleeb etc.

Promotion & Advertising


Olper’s 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 the line) 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 Olper’s launch. One can also a far greater number of
milk advertising billboards in Multan city than seen earlier like of Nirala, good
milk and Nestle.

Olper’s Milk
Media mix for Olper’s milk includes TV, print, outdoor, radio & BTL activities.
Olper’s considers radio still an effective medium because A & B house wives
still listen to the radio on a daily basis.

Building customer based brand equity


Brand equity can be defined as the effects that marketing activities have on a
particular brand. There are different types of brand equity but the one that
the marketers are most concerned about the customer-based brand equity.
Customer-based brand equity is an important element that marketers have to
keep in mind before marketing any brand. There are different ways of
building, measuring and managing customer-based brand equity. Once the
brand is introduced into the market it is important to build brand equity. This
helps to improve sales and has long term benefits. ENGRO, although a
separate name from Olper’s has a very strong impact on the sales of Olper’s.
People know ENGRO because of its well established reputation in fertilization
sector. Therefore, they hold a strong association in their minds for Olper’s as
well. There are different nodes that connect ENGRO to Olper’s in the
customers’ minds. The ads for Olper’s do not show any link with ENGRO foods
but the HR managers keep mentioning ENGRO in every press release of
Olper’s. .that is how people have associated Olper’s with ENGRO. The sales
figure for the first eight months of Olper’s launch showed a number in
billions. This is evidence that people have accepted the brand and liked it.
Thus marketers have been successful in creating customer-based brand
equity for Olper’s. This could be due to strong associations with ENGRO in the
minds of customers.
Due to just a few brands in the milk sector it is easier for customers to make
different associations for each brand in their minds. Therefore, a person’s
ability to recognize and
recall a brand under a given set of product categories becomes easier.
Olper’s has been aggressively promoted which is why customers can
recognize it easily. The red color and the shelf space that the brand
commands make it even more prominent from the rest of the brands.
Although Olper’s product related attributes, such as white color, hygienic and
processed milk, are quite similar to other brands such as Nestle and Haleeb,
while the non-product related attributes such as the packaging of red color
and usage imagery that is portrayed in every advertisement of Olper’s, can
be distinguished from the competitors’ brands. Olper’s is promoted with the
viewpoint that the milk is meant for all-purposes. This obviously shows the
usage imagery of the brand. When it comes to the benefits that customers
look for in milk are clean processed milk that is good for health and can be
used for all purposes. Olper’s provides its customers with functional and
experiential benefits. The functional benefits include healthy bones, high
calcium, good taste, while experiential benefits are that every morning starts
with Olper’s milk that is the tag line subah Bakhair Zindagi. Other
experiential benefit is the variety that has come into the milk sector due to
another brand entering the market. People can now choose from a number of
brands for milk and especially the variety seekers will definitely want another
brand to enter the market. If, in the beginning, consumers are not willing to
buy the brand then it might be due to such factors as low involvement in that
product category or due to brand loyalty towards brands like Nestle and
Haleeb. However, the color of packaging in the grocery stores may attract
customers enough to make them buy it, thus the brand attitude In this case
helped the brand to form the basis for customer behavior. Olper’s has
favorable, strong and unique brand associations in customers’ minds. It is
favorable because milk is a need and clean hygienic milk that is free of
bacteria and germs is what conscious customers are looking for. Due to
awareness about health and drawbacks of lose milk the customers are further
in search of processed milk. The association is also strong because there is a
very string cue linked to Olper’s and that is ENGRO foods. Usually people thin
Olper’s as a sub brand of ENGRO foods. Due to this reason customers
perceive Olper’s’ as a high quality brand that will come up to their
expectations. Olper’s has created a unique image through its ads. For
example, the ad for Olwell is one that is exclusive and cannot be forgotten.
Due to such positive brand image, Olper’s enjoys higher profit margins and
increased marketing communication effectiveness.
Olper’s itself is a very distinctive name that is easy to remember and one
that will stay in the memory for a long period of time. It even serves to
enhance the image of the brand as all-purpose milk. In the same way, Olwell
serves the purpose of all is well in terms of customers’ health Therefore, the
choice of brand identity when building the brand equity has been very good.
These create brand recognition and recall all at the same time. Olper’s has
been developing marketing programs to enhance brand awareness initially.
Due to familiarity with ENGRO foods, Olper’s did not have much difficulty in
building the customer-based brand equity. Thus ENGRO can also be seen as a
secondary association for Olper’s and one that has strongly influences the
positioning of Olper’s. it has added to the credibility of Olper’s.

Measuring customer-based brand equity


HR managers used questionnaires to find how customers feel about the
brand. They used the indirect approach with different qualitative and
projective techniques (the questionnaire contained some questions related to
sentence completion and brand personality description). They used this to
understand customers’ feelings for the brand. The managers agree that
ENGRO Foods has helped improve the image for Olper’s. They assessed the
leverage of secondary associations in this case by comparing the company’s
characteristic with the characteristics of Olper’s.

Managing customer-based brand equity


The organization is managing the customer based brand equity because they
realize the significance of marketing activities and their effect on creating
more value for the brand, and so by influencing brand knowledge, sales can
be improved. Olper’s is concentrating on the emotional aspect in their ads in
order to focus on the core need of customers that can be satisfied.

Social Responsibility
Corporate Social Responsibility is at the heart of ENGRO’s work. We believe in
working with all the stakeholders to improve their quality of life, in a way that
is both good for business and development. We also believe in earning the
trust of our stakeholders by acting responsibly within the communities that
we serve. To help achieve these goals, the company has been making
sizeable contributions for various CSR projects. ENGRO’s urea manufacturing
site is located in Daharki district Ghotki. It operates in Daharki for past 40
years now. Since the company has grown from this single manufacturing
facility to a truly diversified corporate entity, it owes a lot to Daharki. The
company’s commitment to this part of Sindh is evident in its social
development projects as the bulk of Company’s contribution budget is spent
in and around Daharki. The company has interventions in number of areas
like education, health, environment, sports, and infrastructural
improvements.

Education Programs
Ghotki district ranks among the lowest on social indicators. Particularly, the
scenario of education is less than desired. The literacy rate is mere 28.65%.
Literacy rate is heavily skewed between genders with 44.2% and 11.85% of
male and female population being literate respectively. Keeping in mind the
above scenario, ENGRO has taken an integrated approach and have number
of interventions at different levels. Pillars of its intervention in educational
sector are quality, community and gender participation. Ali Institute of
Education, Lahore and The Citizens Foundation are the major partners of
ENGRO in educational interventions. A brief description of the educational
projects led by ENGRO is as follows:

Katcha Schools:
The program started off as an informal education program in Katcha
(riverine) area of Indus in Ghotki district with 2 schools in 2001. The program
gradually grew in its reach and as of now, a total of 11 schools are operating
with an enrollment of more than 850 students and 18 full time trained
teachers. On infrastructure front in this area, ENGRO has leveraged its
contribution with USAID and district government funding by constructing
proper school structures at four locations.
Training and Resource Centre:
Training and Resource Centre is the only teachers training facility in Ghotki
district. Since its inception in 1999, more than 2500 teachers of Ghotki
district have been trained at the centre. A team of 4 full time PDTs carryout
general and subject specific training sessions.

Sahara Welfare Society:


Sahara Welfare Society, a non-profit voluntary organization managed by
company employees at Daharki, runs a primary school, vocational training
school and a free clinic. About 200 students from underprivileged segment of
the society get quality education in the school. Sahara Art & Craft has
attracted about 200 females from the surrounding community for training in
embroidery and dressmaking since its inception in 2003.

Health Programs
General availability of health facilities is less for growing population of Ghotki
district. With this view ENGRO has developed a number of health
infrastructural programs:

Free Snake Bite Treatment:


ENGRO offers this unique program as a part of its health services initiatives
where snake bite cases are treated free of cost. In 2005, free snakebite
treatment has been provided to record 5,000 victims at company's 24-hours
7-day clinic at plant site in Daharki. Since inception of program in 1977, more
than 62,000 patients have been treated. Since this is the only center in the
400 KM proximity, people from far flung areas are brought to this center for
treatment and administration of Anti Snake Venom (ASV).

Dialysis Centers at Daharki and Mirpur Mathelo:


Responding to the President of Pakistan and local government’s desire for
enhanced corporate support for Ghotki and surrounding areas, company
constructed its second dialysis centre at District Head Quarter Hospital Mirpur
Mathelo in 2004, at a cost of Rs 3.5 million. The center has been operational
since June 2005 and since then approximately 75 dialyses have been carried
out. Dialysis Center in Daharki, established in 2001 at RHC Daharki, has
successfully handled 2400 cases so far.

Eye Care Centre:

Established in 1999 at a cost of Rs. 5 million, the Eye Care Center at Daharki
has so far treated more than 45,000 patients for various ailments. In addition
more than 4,000 surgeries including IOL implants, have taken place at the
centre.

Oncology Unit at Aga Khan University Hospital, Karachi


Oncology unit at Aga Khan University Hospital, Karachi, has been completed
with the generous support of the company. The facility was inaugurated by
His Highness the Aga Khan on 2 December 2005. The Ibn Zuhr Building of
Oncology has a gross area of 42,454 square feet, spread over six levels. It
houses two radiotherapy linear acceleration (LINACs) machines and a
simulator; brachytherapy used in the treatment of prostate and other
cancers; and dosimetry for the calculation of appropriate radiation dosages
for different treatments. The unit houses facilities like laboratory, blood
collection, pharmacy, patient welfare services, teaching room, patient
counseling and a treatment room. The facility has 24 chemotherapy stations,
two procedure rooms and four private beds.

Tele-Medicine Project
The Company initiated work on the first Telemedicine project in 2004 that
provides delivery of health care services to selected rural areas from
specialist doctors in Karachi using communication technologies for diagnosis,
treatment and prevention of diseases. The facility includes electronic online
transmission of X-rays, Electro Cardio Grams and patients live heartbeats for
real time consultation by experts. Videoconferencing and image transfer
facility has also been provided between Hub and the Spokes. The project has
been commissioned at two locations. The specialists at Karachi Hub examine
patients referred to them electronically from Gambat Institute of Medical
Sciences and from Shikarpur District Hospital. 5-10 tele-consultations are
being made each day.

Future plans
Engro Foods Limited (EFL) announced its vision to emerge as a global player
in the food industry with a proposed initial spending of over $200 million. The
vision is to transform the company within the next five years into first
national food industry giant, then into a regional force and finally into a
global player. The Board of the Company has already approved investments
in capacity expansion and marketing, including setting up of a plant in
Central Punjab. While unfurling its future plans, ENGRO Foods CEO stated,
"Our vision is to become a fast expanding mega foods company. To achieve
our vision, the company will initially focus on dairy by investing a substantial
amount in plant, milk collection capability and marketing. We firmly believe
that there is a big dairy opportunity available and with our strong entry in
UHT milk category, with Olper’s milk, we have placed ourselves ahead of
others in terms of quality and consumer-understanding. It is our belief that
we can get the maximum out of this opportunity by focusing on innovation
and quality." – Press release "ENGRO Foods is making concrete efforts to
expand in and beyond Pakistan; through strategic international alliances, our
vision is to eventually become global." He said that dairies have entered the
market in the past but failed due to lack of technical expertise and financial
soundness. Elaborating further, he mentioned that ENGRO's 40-year-old
relationship with the farmer also gives ENGRO Foods another edge over the
competitors. The future plans also include as ENGRO Foods coming up with
new products / brands to expand its portfolio in the dairy industry. The
company will be launching new brands in various dairy categories after
completing solid consumer and product research. The company has already
hired various global research partners to develop its future portfolio. The
company also plans to encourage women in the company's workforce,
especially in the milk collection areas, thus contributing to poverty
alleviation. The company is already working with several NGOs and agencies
and has recently signed an understanding with UNDP to initiate a women's
veterinary workers programme in addition to signing a micro-financing model
for dairy farming with Pakistan Poverty Alleviation Fund (PPAF).