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Project Olpers

Engro Foods produces Olper's milk, which holds a 48% market share of the Pakistani UHT milk market. The market has grown significantly in recent years as consumers shift from unpackaged milk to packaged milk for health and hygiene reasons. Olper's dominates segments like milk for tea/coffee and kids but has potential to grow in emerging segments like milk for fitness. While Engro has strong distribution through traders, competitors have gained by expanding directly owned distribution networks and modern trade channels. To maintain its leading position, Engro should focus on expanding coverage, entering new segments, and maintaining brand awareness.

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Strategic Marketing and Planning Term Project Muhammad Minhaj Siddiqui Muhammad Saad Sabina Bhagat Mirza Fazal
Business Scope • Pakistan is the 4th largest milk producer country in the world having milk production 36.2 million tons • Engro foods is one of the biggest and fastest growing businesses in Pakistan and its vision is to provide products meeting global standards to local consumers. • Engro’s business scope is to provide consumers with daily use products conforming to international standards in terms of quality, health and taste. Causes • Increase in UHT Process Milk Market •Pakistan is the 2nd largest country of buffalo milk producer in the world Effects Consumers are shifting from gawala milk to tetra pack
Business Scope • Regions: The business operates nationwide with a number of distributors and wholesaler providing Olpers to its customers. • Products: Its product portfolio comprises some of the country's biggest and best selling brands including Olper's, Olper's Lite, Omore, Dairy Omung, Olper's Lassi and Tarang • Functions / Applications: Milk for tea, milk for kids, milk for daily drinking, vitamin D with high calcium and milk for fitness • Customers: House holds from upper class, upper middle class and middle class • Technologies: Ultra Heated Treatment for killing bacteria Causes • Consumers are moving towards hygienic milk • Consumers can preserve the milk for long time Effects • Nationally increase in sales for last five years • Customer can buy the milk with its monthly grocery
Market Players of UHT Milk Year Of Current Owners Company Name Brand Name Market Share Nationally Geographic Coverage 1981 Nestle Milk Pack 42% National 2006 Engro Foods Olpers 48% National 2006 Shakarganj Food Products Limited Good Milk 4% National 2009 Dairyland Dairy Fresh 3% National 1984 Haleeb Foods Haleeb Milk 2% National 42% 48% 2% 3% 4% 1% Nestle Engro Haleeb Day fresh Shakarjang Other
End User Application low-fat, Vitamin D,hi- calcium milk that can boost energy, without the extra calories Milk for tea/coffee Milk for Kids Milk for Daily Drinking External Analysis Market Structure Olpers Milk, Nestle Milkpak Olpers Milk, Nestle Milkpak Olpers Milk, Nestle Milkpak Nesvita Olpers lite, Nestle Nesvita Product Channel General Trade Food Services Modern Trade The Company Milk for fitness
Market Size– Past 4 Year Analysis:  The industry has seen increase in consumption of milk from various segments over the past years.  Emerging segments over the years have been milk for fitness, multi vitamins and separation of milk for tea/coffee from milk of daily drinking.  New segment in which currently no UHT Treated milk is functioning is milk for traditional sweets in which unpacked milk market has the highest share.  Olpers has declining market size from 2011 – 2013 due to their distribution network  Milkpak market size was declined in 2014 due to their low production of main SKU’s in 1000ml and 250 ml. Value in Billion PKR MARKET SEGMENT 2011 2012 2013 2014 2015 P.A. % Milk for Tea/Coffee 41.25 43.45 43.45 44.55 45.1 15% Milk for Kids 22.5 23.7 23.7 24.3 24.6 13% Milk for Daily Drinking 7.5 7.9 7.9 8.1 8.2 10% Multivitamins Milk 2.25 2.37 2.37 2.43 2.46 9% Milk for Fitness 1.5 1.58 1.58 1.62 1.64 10% TOTAL (INDUSTRY) 75 79 79 81 82 Volume in Liters (Million) MARKET SEGMENT 2011 2012 2013 2014 2015 P.A. % Milk for Tea/Coffee 0.66 0.055 0.44 0.77 0.99 14% Milk for Kids 0.36 0.03 0.24 0.42 0.54 12% Milk for Daily Drinking 0.12 0.01 0.08 0.14 0.18 8% Multivitamins Milk 0.036 0.003 0.024 0.042 0.054 10% Milk for Fitness 0.024 0.002 0.016 0.028 0.036 9% TOTAL (INDUSTRY) 1.2 0.1 0.8 1.4 1.8
Value in Billion PKR MARKET SEGMENT 2016 2017 2018 2019 P.A. % Milk for Tea/Coffee 4.7 4.9 5.02 5.076 15% Milk for Kids 3.2 3.2 3.3 3.4 13% Milk for Daily Drinking 4.6 4.4 4.3 4.2 9% Multivitamins Milk 2.5 2.6 2.8 2.8 10% Milk for Fitness 0.8 0.82 0.83 0.85 9% TOTAL (INDUSTRY) 15.8 15.92 16.25 16.33 Assumptions:  The UHT milk industry receives consumer acceptance and purchases remain on similar trend.  New segments continue to gain market share by introducing new products for that segment.  Special packaging is introduced so as to adapt the product to consumer lifestyle.  Government policies and regulations remain stable. Market Size – Future 4 Years Volume in Liters (Million) MARKET SEGMENT 2016 2017 2018 2019 P.A. % Milk for Tea/Coffee 1.1088 1.1286 1.1385 1.1286 15% Milk for Kids 0.6048 0.6156 0.621 0.6156 13% Milk for Daily Drinking 0.2016 0.2052 0.207 0.2052 10% Multivitamins Milk 0.06048 0.06156 0.0621 0.06156 9% Milk for Fitness 0.04032 0.04104 0.0441 0.04104 10% TOTAL (INDUSTRY) 2.016 2.052 2.0727 2.052
Product Lifecycle Analysis:  Good Milk and Dairy Fresh are the new entries to the UHT Treated market and are at their introduction phase.  Olpers and Milk Pack are currently at their growth phase section. Now both should be thinking on tapping to new markets that is going for product extension.  Haleeb, on the other hand, is on its maturity/decline phase where it is needed to come up again to gain the market share. Haleeb MilkMilk Pack Olpers Dairy Fresh
Competitions Segment Matrix: Competition Market Share Segments Over all Milk for Tea/C offee Milk for Kids Milk for Daily Drinki ng Multi- vitami ns Milk Milk for Fitnes s Olpers 48% 40 15 40 - 5 100 Milk Pack 42% 20 20 40 10 10 100 Good Milk 4% 10 20 50 0 10 100 Dairy Fresh 3% 60 10 30 - - 100 Haleeb 2% 70 5 25 - - 100 Total 100 Historical Growth 16.9 5.9 5.15 3.36 1.86 Projected Growth 18.25 6.55 5.15 4.55 2.55 Company Profitability 55% 30% 10% - 5% Analysis:  Companies’ major share is currently in milk for milk for tea/coffee and Kids  Company has potential for milk for fitness and multi vitamin milk segment where the competitors are not even strong.  Company can increase its profitability in the milk for kids segment.
ANALYSIS Increase in the modern trade and decrease in the general trade due to super marts like Imtiaz, Chase up etc Consumer are shifting from Kiryana to supermarkets Change in consumer buying behavior DISTRIBUTION STRUCTURE: SHIFT FROM 2011 TO 2015 % OF RS MIL Olpers Milkpak Olpers Milkpak Shift in years 2011 2015 2011 2015 2016 2019 2016 2019 General Trade 70.00% 55.00% 68.00% 42.00% 55% 35% 42% 30% Food Services 10.00% 5.00% 16% 20.00% 5% 7% 20% 25% Modern Trade 20.00% 40.00% 16.00% 38.00% 40% 58.00% 38% 45% Total 100% 100% 100% 100% 100 100% 100 100%
Distribution Shares And Company’s Position % OF PKR MILLION INDUSTRY DISTRIBUTIO N OLPERS TURNOVER SHARE NESTLE TURNOVER SHARE General Trade 77 78 72 Food Services 8 7 15 Modern Trade 40 30 28 It can be observed that most of Olpers sales occur through trade which includes retail stores, superstores, super markets etc. ANALYSIS:
Driving Forces And Trends In The UHT Milk Industry Hygienic Milk Purity Thickness Complete Nutrition's Easy to use Long term storage
External Factors There are various reasons for the growth of the UHT market such as • People prefer more hygienic milk as compared to gawala milk • Government can ban the gawala milk due to hygienic issues • People can easily store the milk for long period • Complete nutrition is available in UHT Milk • Easy to use without boiling
People use tetrapak Milk specifically for sweet dishes People can consume more milk if it is available at their door step Low price with good quality milk can increase growth Vitamin D with high calcium milk is the emerging segment which is recommended by doctor TOP – External Trends Trend Potential Impact We T More Hygienic and thick Multi uses for desert and sweet dishes Yes Yes Availability Fastest delivery at home through one call No No Low price with good quality milk opportunity No No Vitamin D High calcium milk Opportunity No Yes
KEY INPUTS FOR STRATEGY FROM EXTERNAL ANALYSIS 1. Lack of self-owned distribution network thus having less in-depth coverage of market. 2. Higher cost due to transportation of milk form one major plant to all cities. 3. Emerging segments of health and specifically fitness conscious people. Catering to them would increase the market share. 4. Most profitable segments like tea/coffee and daily drinking of milk needs to be further tapped in various regions. 5. Entering into markets that will buy in bulk quantity i.e. institutional selling. This would involve partnering with Hotels, café, Hospitals, Offices, Educational institutions, Airport etc. 6. Maintain and increase the Top of the Mind awareness for product.
SWOT - ANALYSIS Opportunities Threats Strengths Weaknesses External Analysis Internal Analysis Promising Opportunities Only opportunities after improvement Ability to resist High Risks Competitive Advantage(s)? Constraints to potential business objectives & strategic scenario’s 1. Farmer Funding 2. Growing Consumption 3. Increasing awareness 4. Largest Producer 1. High Price 2. Competition 1-Strong Supply chine Network And Strong Relationship with Distributer. 2-Growing Market Share 3-Strong Parent Company 4-High Market Penetration 1-Milk collection and distribution cost. 2-Not having their own dairy farm. 3-Geographical Reach in sub-rural area
Olper’s Strengths 1-Strong Supply chine Network And Strong Relationship with Distributer. 2-Growing Market Share 3-Strong Parent Company 4-High Market Penetration Weakness 1-Milk collection and distribution cost. 2-Not having their own dairy farm. 3-Geographical Reach in sub-rural area Opportunities 1-Growing Consumption. 2-Increase the availably of the product. 3-Increase consumption of UHT milk Through awareness. SO Strategies 1-Olper’s Have availability in urban market they just work on awareness and increase sales. WO Strategies 1-After providing awareness it can be affordable in sub areas on interior KPK and Punjab But for that they need to increase their product reach. 2-If they own dairy farms they will be cost controller in industry. Threats 1-High Price a) Existing. b) New. ST Strategies 1-The threats of high price can become the strengths of Olper’s if own their dairy Farms and cut the cost channel. WT Strategies 1-Karachi, Lahore, Islamabad, Faisalabad and Rawalpindi Except these 5 cities all Pakistan contribute less than 50% in Olper’s market share, so for the rest of Pakistan they need a good strategy for increase their sales. Confrontation Matrix
ST Strategies By changing consumer’s perspective company can shift the focus from enjoying the final end product (e.g. tea, coffee, flavored milk) to enjoying Olpers. Thus gaining a competitive advantage in the industry and further strengthening its brand recall. Olpers buying the milk from gowalas, it is important for them to maintain their prices. WT Strategies Olpers focus on the big 5 cities for it sales which contribute more than 50% of their overall sales. It is therefore a weakness for them which will lead to a threat to being confined to specific areas of the country only. SO Strategies As Olpers is a renown brand of UHT treated milk, it now needs to further strengthen its market share by making the product available across the nation i.e. rural expansion. WO Strategies Olpers can gain the market share of expanded areas by working of cost cutting measures thus providing consumer of that geographical area product in affordable prices. Confrontation Matrix
Consumer Buying Criteria: Relative Importance of Factors: A consumer survey was conducted in which various questions were asked which are collected below to assess the criteria on which consumers buy dairy milk. Factor Absolutely Crucial Very Important Moderately Important Not Important Don’t Want Brand Name 32% 24% 31% 8% 5% Packaging 5% 10% 56% 20% 9% Thickness 30% 35% 25% 7% 3% Hygiene 56% 41% 3% 0% 0% Different Usages 44% 38% 12% 6% 0% Health 63% 30% 7% 0% 0% Reduce Fats 12% 17% 30% 14% 27% Availability 44% 36% 17% 3% 0% Easy to Use 20% 24% 35% 15% 6% Analysis: The attribute which is of highest importance to consumer is that the milk they consume should provide them health. Moreover, hygiene is the second most priority of the consumer. With that come the different usages like milk for traditional sweets, flavored milk (jam-e-shereen) etc. Also, consumers rated the availability of the product on high importance as they go for a competitor brand if there brand of milk is not available.
Rating Against Consumer Buying Criteria: Rating of the company and each competitor is done on base 10. Quality & Price Olpers MilkPack Non-Price Attribute Weightage % Product Related Brand Name 8% 8.5 8.5 Packaging 10% 7 7 Thickness 18% 6 8 Hygienic 32% 9 9 Different Usages 5% 8 7 Reduce Fats 2% 3 3 Easy to Use 5% 5 5 Availability 20% 6 9 Total 100% 6.8 6.9
Analysis:  Based on consumer buying criteria olpers is doing well by providing hygienic and healthy product.  It should improve in domain of availability that is to say that it should work towards making its product more available nationwide.  Olpers as compared to its other competitors is providing products in packages which are acceptable to the consumer.  Areas where Olper’s should work on and question are the different usages for which it can be used and its use for fitness. CUSTOMERS BUYING CRITERIA:
KEY ISSUES • Distribution network of the Olpers in the rural area is very week • Thickness of the Olpers Milks is not very good as compare to its major competition • High Milk collection and distribution cost • Unavailability of their own dairy farm
Blue Ocean Strategy: Method Opportunity Introducing Olpers Delivery Trucks Olpers can work on its own distribution network and launch a pilot project in which it should launch delivery trucks for its products. Consumers will be directed to Olpers call-center where they can place their weekly orders and their weekly (or as required) milk will be delivered at their homes. Look for major buyers Olpers can collaborate with various restaurants, cafes, hotels, offices, hospitals, educational institutions, and airport etc where the institution will use/sell their products. In this way, Olpers can increase their market share by institutional or corporate selling.
Strategic Intent: • Number one UHT Milk provider in Pakistan • To develop the effective distribution channel across the country • To own the dairy farm in different regions in Pakistan • To explore new emerging segments for tea milk • Most profitable segments like tea/coffee and daily drinking of milk needs to be further tapped in various regions.
Vision: To become every consumer’s first and foremost choice for milk to be used in every purpose. Mission: Our aim is to become a product that fulfills all dairy needs of consumers. We strive to become the one and only name for quality experience to our consumer and becoming integral part of their lives by complying with global standards and in a socially responsible manner. VISION & MISSION
Product As per our input from the external and internal analysis we have concluded that one of the key issues of Olpers is to explore the new segments like “High calcium milk” Secondly, Olpers current positioning is “ For all purpose” i.e the general purpose milk, it can be customized like Olpers for Tea/Cofee etc. Vitamin D,hi-calcium milk that can boost energy, without the extra calories Tea & Coffee Kids Daily DrinkingFitness For relaxing Growth, increasing height, Sharpe mind low calories, fitness, energetic Healthy bones Maintaining Vitamin D for calcium Marketing Plan
Price Analysis 250 ml 1000 ltr 1.5 ltr OLPERS 30 110 155 NESTLE 35 120 The Price of Olpers is relatively is not to high to that of the others, Olpers should continue with same but currently should not increase its price, but its relatively high as compared the new entrant.
Place The major issues that Olpers face are its availability in depth of regions. This effects its sales which is currently coming from the big 5 cities only It is therefore a weakness for them which will lead to a threat to being confined to specific areas of the country only. Olpers should spread more awareness of the usability of its product so as to increase the market share and customer loyalty. Pakistan has more than 800,000 retail outlets from which olpers is supplied only 200,000 retail outlet.
Promotion Vitamin D,hi- calcium milk that can boost energy, without the extra calories Tea & Coffee Kids Daily Drinking Fitness ATL/ BTL Activities in Offices, University & colleges BTL Activities in Schools by showing motivational animated movies ATL/BTL activities in fitness club, Gymnasium & sports club Showing ATL for spending the fresh day Recommendati on by the doctors
S.R # INPUT FOR STRATEGY ACTION PLAN TIME FRAME 1 Lack of self-owned distribution network thus having less in-depth coverage of market. Establish a self-owned distribution network. 2 years 2 Higher cost due to transportation of milk form one major plant to all cities. Reduce cost in longer run by establishing another plant 5 years 3 Emerging segments of health and specifically fitness conscious people. Catering to them would increase the market share. Expand into products offering solutions to consumer needs. 1 year 4 Most profitable segments like tea/coffee and daily drinking of milk needs to be further tapped in various regions. Develop marketing strategies to target this segment by innovative offerings 1 year 5 Entering into markets that will buy in bulk quantity i.e. institutional selling. This would involve partnering with Hotels, café, Hospitals, Offices, Educational institutions, Airport etc. An institutional channel to be established that caters to identified potential buyers/partners 2 years 6 Gap exists in catering the customers through channel. Home delivery system is the strategy that can be used to reach directly to consumer. Introduce Olpers Delivery trucks for home delivery of dairy products 1 year

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Project Olpers

  • 1.
    Strategic Marketing andPlanning Term Project Muhammad Minhaj Siddiqui Muhammad Saad Sabina Bhagat Mirza Fazal
  • 2.
    Business Scope • Pakistanis the 4th largest milk producer country in the world having milk production 36.2 million tons • Engro foods is one of the biggest and fastest growing businesses in Pakistan and its vision is to provide products meeting global standards to local consumers. • Engro’s business scope is to provide consumers with daily use products conforming to international standards in terms of quality, health and taste. Causes • Increase in UHT Process Milk Market •Pakistan is the 2nd largest country of buffalo milk producer in the world Effects Consumers are shifting from gawala milk to tetra pack
  • 3.
    Business Scope • Regions:The business operates nationwide with a number of distributors and wholesaler providing Olpers to its customers. • Products: Its product portfolio comprises some of the country's biggest and best selling brands including Olper's, Olper's Lite, Omore, Dairy Omung, Olper's Lassi and Tarang • Functions / Applications: Milk for tea, milk for kids, milk for daily drinking, vitamin D with high calcium and milk for fitness • Customers: House holds from upper class, upper middle class and middle class • Technologies: Ultra Heated Treatment for killing bacteria Causes • Consumers are moving towards hygienic milk • Consumers can preserve the milk for long time Effects • Nationally increase in sales for last five years • Customer can buy the milk with its monthly grocery
  • 4.
    Market Players ofUHT Milk Year Of Current Owners Company Name Brand Name Market Share Nationally Geographic Coverage 1981 Nestle Milk Pack 42% National 2006 Engro Foods Olpers 48% National 2006 Shakarganj Food Products Limited Good Milk 4% National 2009 Dairyland Dairy Fresh 3% National 1984 Haleeb Foods Haleeb Milk 2% National 42% 48% 2% 3% 4% 1% Nestle Engro Haleeb Day fresh Shakarjang Other
  • 5.
    End User Application low-fat, VitaminD,hi- calcium milk that can boost energy, without the extra calories Milk for tea/coffee Milk for Kids Milk for Daily Drinking External Analysis Market Structure Olpers Milk, Nestle Milkpak Olpers Milk, Nestle Milkpak Olpers Milk, Nestle Milkpak Nesvita Olpers lite, Nestle Nesvita Product Channel General Trade Food Services Modern Trade The Company Milk for fitness
  • 6.
    Market Size– Past4 Year Analysis:  The industry has seen increase in consumption of milk from various segments over the past years.  Emerging segments over the years have been milk for fitness, multi vitamins and separation of milk for tea/coffee from milk of daily drinking.  New segment in which currently no UHT Treated milk is functioning is milk for traditional sweets in which unpacked milk market has the highest share.  Olpers has declining market size from 2011 – 2013 due to their distribution network  Milkpak market size was declined in 2014 due to their low production of main SKU’s in 1000ml and 250 ml. Value in Billion PKR MARKET SEGMENT 2011 2012 2013 2014 2015 P.A. % Milk for Tea/Coffee 41.25 43.45 43.45 44.55 45.1 15% Milk for Kids 22.5 23.7 23.7 24.3 24.6 13% Milk for Daily Drinking 7.5 7.9 7.9 8.1 8.2 10% Multivitamins Milk 2.25 2.37 2.37 2.43 2.46 9% Milk for Fitness 1.5 1.58 1.58 1.62 1.64 10% TOTAL (INDUSTRY) 75 79 79 81 82 Volume in Liters (Million) MARKET SEGMENT 2011 2012 2013 2014 2015 P.A. % Milk for Tea/Coffee 0.66 0.055 0.44 0.77 0.99 14% Milk for Kids 0.36 0.03 0.24 0.42 0.54 12% Milk for Daily Drinking 0.12 0.01 0.08 0.14 0.18 8% Multivitamins Milk 0.036 0.003 0.024 0.042 0.054 10% Milk for Fitness 0.024 0.002 0.016 0.028 0.036 9% TOTAL (INDUSTRY) 1.2 0.1 0.8 1.4 1.8
  • 7.
    Value in BillionPKR MARKET SEGMENT 2016 2017 2018 2019 P.A. % Milk for Tea/Coffee 4.7 4.9 5.02 5.076 15% Milk for Kids 3.2 3.2 3.3 3.4 13% Milk for Daily Drinking 4.6 4.4 4.3 4.2 9% Multivitamins Milk 2.5 2.6 2.8 2.8 10% Milk for Fitness 0.8 0.82 0.83 0.85 9% TOTAL (INDUSTRY) 15.8 15.92 16.25 16.33 Assumptions:  The UHT milk industry receives consumer acceptance and purchases remain on similar trend.  New segments continue to gain market share by introducing new products for that segment.  Special packaging is introduced so as to adapt the product to consumer lifestyle.  Government policies and regulations remain stable. Market Size – Future 4 Years Volume in Liters (Million) MARKET SEGMENT 2016 2017 2018 2019 P.A. % Milk for Tea/Coffee 1.1088 1.1286 1.1385 1.1286 15% Milk for Kids 0.6048 0.6156 0.621 0.6156 13% Milk for Daily Drinking 0.2016 0.2052 0.207 0.2052 10% Multivitamins Milk 0.06048 0.06156 0.0621 0.06156 9% Milk for Fitness 0.04032 0.04104 0.0441 0.04104 10% TOTAL (INDUSTRY) 2.016 2.052 2.0727 2.052
  • 8.
    Product Lifecycle Analysis:  GoodMilk and Dairy Fresh are the new entries to the UHT Treated market and are at their introduction phase.  Olpers and Milk Pack are currently at their growth phase section. Now both should be thinking on tapping to new markets that is going for product extension.  Haleeb, on the other hand, is on its maturity/decline phase where it is needed to come up again to gain the market share. Haleeb MilkMilk Pack Olpers Dairy Fresh
  • 9.
    Competitions Segment Matrix: Competition Market ShareSegments Over all Milk for Tea/C offee Milk for Kids Milk for Daily Drinki ng Multi- vitami ns Milk Milk for Fitnes s Olpers 48% 40 15 40 - 5 100 Milk Pack 42% 20 20 40 10 10 100 Good Milk 4% 10 20 50 0 10 100 Dairy Fresh 3% 60 10 30 - - 100 Haleeb 2% 70 5 25 - - 100 Total 100 Historical Growth 16.9 5.9 5.15 3.36 1.86 Projected Growth 18.25 6.55 5.15 4.55 2.55 Company Profitability 55% 30% 10% - 5% Analysis:  Companies’ major share is currently in milk for milk for tea/coffee and Kids  Company has potential for milk for fitness and multi vitamin milk segment where the competitors are not even strong.  Company can increase its profitability in the milk for kids segment.
  • 10.
    ANALYSIS Increase in themodern trade and decrease in the general trade due to super marts like Imtiaz, Chase up etc Consumer are shifting from Kiryana to supermarkets Change in consumer buying behavior DISTRIBUTION STRUCTURE: SHIFT FROM 2011 TO 2015 % OF RS MIL Olpers Milkpak Olpers Milkpak Shift in years 2011 2015 2011 2015 2016 2019 2016 2019 General Trade 70.00% 55.00% 68.00% 42.00% 55% 35% 42% 30% Food Services 10.00% 5.00% 16% 20.00% 5% 7% 20% 25% Modern Trade 20.00% 40.00% 16.00% 38.00% 40% 58.00% 38% 45% Total 100% 100% 100% 100% 100 100% 100 100%
  • 11.
    Distribution Shares AndCompany’s Position % OF PKR MILLION INDUSTRY DISTRIBUTIO N OLPERS TURNOVER SHARE NESTLE TURNOVER SHARE General Trade 77 78 72 Food Services 8 7 15 Modern Trade 40 30 28 It can be observed that most of Olpers sales occur through trade which includes retail stores, superstores, super markets etc. ANALYSIS:
  • 12.
    Driving Forces AndTrends In The UHT Milk Industry Hygienic Milk Purity Thickness Complete Nutrition's Easy to use Long term storage
  • 13.
    External Factors There arevarious reasons for the growth of the UHT market such as • People prefer more hygienic milk as compared to gawala milk • Government can ban the gawala milk due to hygienic issues • People can easily store the milk for long period • Complete nutrition is available in UHT Milk • Easy to use without boiling
  • 14.
    People use tetrapakMilk specifically for sweet dishes People can consume more milk if it is available at their door step Low price with good quality milk can increase growth Vitamin D with high calcium milk is the emerging segment which is recommended by doctor TOP – External Trends Trend Potential Impact We T More Hygienic and thick Multi uses for desert and sweet dishes Yes Yes Availability Fastest delivery at home through one call No No Low price with good quality milk opportunity No No Vitamin D High calcium milk Opportunity No Yes
  • 15.
    KEY INPUTS FORSTRATEGY FROM EXTERNAL ANALYSIS 1. Lack of self-owned distribution network thus having less in-depth coverage of market. 2. Higher cost due to transportation of milk form one major plant to all cities. 3. Emerging segments of health and specifically fitness conscious people. Catering to them would increase the market share. 4. Most profitable segments like tea/coffee and daily drinking of milk needs to be further tapped in various regions. 5. Entering into markets that will buy in bulk quantity i.e. institutional selling. This would involve partnering with Hotels, café, Hospitals, Offices, Educational institutions, Airport etc. 6. Maintain and increase the Top of the Mind awareness for product.
  • 16.
    SWOT - ANALYSIS OpportunitiesThreats Strengths Weaknesses External Analysis Internal Analysis Promising Opportunities Only opportunities after improvement Ability to resist High Risks Competitive Advantage(s)? Constraints to potential business objectives & strategic scenario’s 1. Farmer Funding 2. Growing Consumption 3. Increasing awareness 4. Largest Producer 1. High Price 2. Competition 1-Strong Supply chine Network And Strong Relationship with Distributer. 2-Growing Market Share 3-Strong Parent Company 4-High Market Penetration 1-Milk collection and distribution cost. 2-Not having their own dairy farm. 3-Geographical Reach in sub-rural area
  • 17.
    Olper’s Strengths 1-Strong Supply chineNetwork And Strong Relationship with Distributer. 2-Growing Market Share 3-Strong Parent Company 4-High Market Penetration Weakness 1-Milk collection and distribution cost. 2-Not having their own dairy farm. 3-Geographical Reach in sub-rural area Opportunities 1-Growing Consumption. 2-Increase the availably of the product. 3-Increase consumption of UHT milk Through awareness. SO Strategies 1-Olper’s Have availability in urban market they just work on awareness and increase sales. WO Strategies 1-After providing awareness it can be affordable in sub areas on interior KPK and Punjab But for that they need to increase their product reach. 2-If they own dairy farms they will be cost controller in industry. Threats 1-High Price a) Existing. b) New. ST Strategies 1-The threats of high price can become the strengths of Olper’s if own their dairy Farms and cut the cost channel. WT Strategies 1-Karachi, Lahore, Islamabad, Faisalabad and Rawalpindi Except these 5 cities all Pakistan contribute less than 50% in Olper’s market share, so for the rest of Pakistan they need a good strategy for increase their sales. Confrontation Matrix
  • 18.
    ST Strategies By changingconsumer’s perspective company can shift the focus from enjoying the final end product (e.g. tea, coffee, flavored milk) to enjoying Olpers. Thus gaining a competitive advantage in the industry and further strengthening its brand recall. Olpers buying the milk from gowalas, it is important for them to maintain their prices. WT Strategies Olpers focus on the big 5 cities for it sales which contribute more than 50% of their overall sales. It is therefore a weakness for them which will lead to a threat to being confined to specific areas of the country only. SO Strategies As Olpers is a renown brand of UHT treated milk, it now needs to further strengthen its market share by making the product available across the nation i.e. rural expansion. WO Strategies Olpers can gain the market share of expanded areas by working of cost cutting measures thus providing consumer of that geographical area product in affordable prices. Confrontation Matrix
  • 19.
    Consumer Buying Criteria: RelativeImportance of Factors: A consumer survey was conducted in which various questions were asked which are collected below to assess the criteria on which consumers buy dairy milk. Factor Absolutely Crucial Very Important Moderately Important Not Important Don’t Want Brand Name 32% 24% 31% 8% 5% Packaging 5% 10% 56% 20% 9% Thickness 30% 35% 25% 7% 3% Hygiene 56% 41% 3% 0% 0% Different Usages 44% 38% 12% 6% 0% Health 63% 30% 7% 0% 0% Reduce Fats 12% 17% 30% 14% 27% Availability 44% 36% 17% 3% 0% Easy to Use 20% 24% 35% 15% 6% Analysis: The attribute which is of highest importance to consumer is that the milk they consume should provide them health. Moreover, hygiene is the second most priority of the consumer. With that come the different usages like milk for traditional sweets, flavored milk (jam-e-shereen) etc. Also, consumers rated the availability of the product on high importance as they go for a competitor brand if there brand of milk is not available.
  • 20.
    Rating Against ConsumerBuying Criteria: Rating of the company and each competitor is done on base 10. Quality & Price Olpers MilkPack Non-Price Attribute Weightage % Product Related Brand Name 8% 8.5 8.5 Packaging 10% 7 7 Thickness 18% 6 8 Hygienic 32% 9 9 Different Usages 5% 8 7 Reduce Fats 2% 3 3 Easy to Use 5% 5 5 Availability 20% 6 9 Total 100% 6.8 6.9
  • 21.
    Analysis:  Based onconsumer buying criteria olpers is doing well by providing hygienic and healthy product.  It should improve in domain of availability that is to say that it should work towards making its product more available nationwide.  Olpers as compared to its other competitors is providing products in packages which are acceptable to the consumer.  Areas where Olper’s should work on and question are the different usages for which it can be used and its use for fitness. CUSTOMERS BUYING CRITERIA:
  • 22.
    KEY ISSUES • Distributionnetwork of the Olpers in the rural area is very week • Thickness of the Olpers Milks is not very good as compare to its major competition • High Milk collection and distribution cost • Unavailability of their own dairy farm
  • 23.
    Blue Ocean Strategy: MethodOpportunity Introducing Olpers Delivery Trucks Olpers can work on its own distribution network and launch a pilot project in which it should launch delivery trucks for its products. Consumers will be directed to Olpers call-center where they can place their weekly orders and their weekly (or as required) milk will be delivered at their homes. Look for major buyers Olpers can collaborate with various restaurants, cafes, hotels, offices, hospitals, educational institutions, and airport etc where the institution will use/sell their products. In this way, Olpers can increase their market share by institutional or corporate selling.
  • 24.
    Strategic Intent: • Numberone UHT Milk provider in Pakistan • To develop the effective distribution channel across the country • To own the dairy farm in different regions in Pakistan • To explore new emerging segments for tea milk • Most profitable segments like tea/coffee and daily drinking of milk needs to be further tapped in various regions.
  • 25.
    Vision: To become everyconsumer’s first and foremost choice for milk to be used in every purpose. Mission: Our aim is to become a product that fulfills all dairy needs of consumers. We strive to become the one and only name for quality experience to our consumer and becoming integral part of their lives by complying with global standards and in a socially responsible manner. VISION & MISSION
  • 26.
    Product As per ourinput from the external and internal analysis we have concluded that one of the key issues of Olpers is to explore the new segments like “High calcium milk” Secondly, Olpers current positioning is “ For all purpose” i.e the general purpose milk, it can be customized like Olpers for Tea/Cofee etc. Vitamin D,hi-calcium milk that can boost energy, without the extra calories Tea & Coffee Kids Daily DrinkingFitness For relaxing Growth, increasing height, Sharpe mind low calories, fitness, energetic Healthy bones Maintaining Vitamin D for calcium Marketing Plan
  • 27.
    Price Analysis 250 ml1000 ltr 1.5 ltr OLPERS 30 110 155 NESTLE 35 120 The Price of Olpers is relatively is not to high to that of the others, Olpers should continue with same but currently should not increase its price, but its relatively high as compared the new entrant.
  • 28.
    Place The major issuesthat Olpers face are its availability in depth of regions. This effects its sales which is currently coming from the big 5 cities only It is therefore a weakness for them which will lead to a threat to being confined to specific areas of the country only. Olpers should spread more awareness of the usability of its product so as to increase the market share and customer loyalty. Pakistan has more than 800,000 retail outlets from which olpers is supplied only 200,000 retail outlet.
  • 29.
    Promotion Vitamin D,hi- calcium milkthat can boost energy, without the extra calories Tea & Coffee Kids Daily Drinking Fitness ATL/ BTL Activities in Offices, University & colleges BTL Activities in Schools by showing motivational animated movies ATL/BTL activities in fitness club, Gymnasium & sports club Showing ATL for spending the fresh day Recommendati on by the doctors
  • 30.
    S.R # INPUTFOR STRATEGY ACTION PLAN TIME FRAME 1 Lack of self-owned distribution network thus having less in-depth coverage of market. Establish a self-owned distribution network. 2 years 2 Higher cost due to transportation of milk form one major plant to all cities. Reduce cost in longer run by establishing another plant 5 years 3 Emerging segments of health and specifically fitness conscious people. Catering to them would increase the market share. Expand into products offering solutions to consumer needs. 1 year 4 Most profitable segments like tea/coffee and daily drinking of milk needs to be further tapped in various regions. Develop marketing strategies to target this segment by innovative offerings 1 year 5 Entering into markets that will buy in bulk quantity i.e. institutional selling. This would involve partnering with Hotels, café, Hospitals, Offices, Educational institutions, Airport etc. An institutional channel to be established that caters to identified potential buyers/partners 2 years 6 Gap exists in catering the customers through channel. Home delivery system is the strategy that can be used to reach directly to consumer. Introduce Olpers Delivery trucks for home delivery of dairy products 1 year