Group Members

 Muhammad Zubair
MT-05-45

 Tariq Shehzad
MT-05-02

 Mussadiq Ameer
MT-05-22

 Yasir Mushtq
MT-05-08
 Engro Foods’ History

 Engro Foods (Pvt.) Limited (EFL) has been

established in 2005 as part of a diversification
process at the Engro Group.

 EFL launched its first dairy product, Olper’s Milk on

March20, 2006
 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
 Marketing Research conducted by ENGRO Foods
 A.C Nielson that carried out the marketing research
for ENGRO foods when the idea of diversifying
into a new market was introduced.
 ENGRO wanted to setup a new fertilization plant
but due to certain
 constraints from the government wasn’t able to do
so.
 They came up with several options including
telecommunications and power plant but they
found out that the food industry held the greatest
promise.
Marketing Research conducted by ENGRO Foods

 They also went

though the list of at
least 1,200 names

 Olper’s is promoted
as the milk for all-
purposes.
Segmenting and targeting the market for Olper’s

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
Segmenting and targeting the market for Olper’s

Psychographic segmentation

 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.
Segmenting and targeting the market for Olper’s

Behavioral segmentation

 Olper’s products have been segmented on the basis

of benefits that consumers seek in the milk

 People look for a brand that can be used for all

purposes from drinking to tea whiteners as well to
feed the animals.
 SWOT Analysis
Strengths

 Engro’s Back
 PR with farmers
 Positive response from customers
 Strong consumer & product research
 Third-Generation Plant
 Weaknesses
Olwell

Olwell ad which is 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.
 Weaknesses
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
 Weaknesses
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 costs

Narrow brand portfolio

EFL’s brand portfolio still consists of just 3 products i.e. Olper’s

Milk, Olwell Milk and Olper’s Cream. Whereas its competitors like
Nestle and Haleeb Foods have a much diversified line of dairy
products.
 Weaknesses
Owning Red Color

The company has not owned the color red like Nestle has a green
Milkpak; Haleeb has a blue carton etc. This may create problems
because when a consumer enters a grocery shop, then he/she
might have problems in recalling the brand

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
 Opportunities

1. Increased funding by Government

2. Increased consumption of PLM
3. Awareness
4. Improving Economy
 Opportunities
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 milk animals
(buffaloes and cows). Livestock accounts for
46.8 percent of agricultural value added and
about 10.8 percent of the GDP.
 Threats
Competition

 Nestle
 Haleeb

These brands have been in the milk industry far too long and
have left a mark in the minds of consumers in terms of
quality.
 Threats
Perceptions and Price Differentials

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.
 Production Plants

 Sahiwal
 Sukkhar

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.
 Products

Olper’s Olper’s Olwell

Milk Cream Lo-Fat

Launched on launched on Launched on

March 20, 2006, September, 2006 December 15, 2006
 Distribution Channels

 Having kicked off simultaneously in 20

cities across Pakistan

 currently Olper’s is available in 80 cities

across Pakistan
 Distribution Channels
Distribution Regions

 Karachi
 Lahore
 Islamabad
 Peshawar
 Multan
 Distribution Channels
Selection criteria of Olpers for Distributors Selection

 Financial Strength of Distributor

 Efficient Infrastructure
 Logistic Fleet
 Efficient and Trained Sales Force
 Past Experience of Distributor
 Market Knowledge
 The use of new Technology (IT)
 Distribution Channels
Negotiations on Price with Distributors

 Olpers doesn’t negotiate on price with

distributors there is a fix Mark-
up/Commission which is 4% for all
distributors
 Distribution Channels
Sales Targets for Distributors

 Monthly sales targets are established after

discussing the market requirement with the
distributors.

 For the month of November the sales target

for the Multan region was 56000 liters
 Distribution Channels
Incentives for the Distributors and Sales Force

 Training
 Bonuses
 Share in the Sales Force Salaries
 Share in Maintenance cost of
Transportation Fleet
 Distribution Channels
Using the Distributor’s Goodwill/Credibility

 Distributor’s credibility and goodwill is not used

as a tool to pressurize the retailer but they are
taken into confidence by first introduction to the
product features and brand and then distributor
repute plays a value addition role
 Customer feedback is acquired for further
planning which is the responsibility of the
distributor to provide to Olpers’ team
 Distribution Channels
Distribution Channels which makes Olpers, a success story

 1st 6 months of its launch, Olpers’ gained

the 13% market share of Nestle
 Brand has become the second largest in
overall ranking in term of sales in the
country leaving Haleeb
 Blochistan a potentional market where
other competitors have not worked over
due to security and safety concern
 Olpers’ Distribution in Multan
 EFL hire the Mehmood & Co Pvt Ltd for
the distribution of Olpers’
 They are in this business from almost 43
years
 Divided the Multan city into 52 sub sectors
for the ease of operations, scheduling of the
salesman visits etc. they visit weekly and
biweekly
 6 salesmen with 8 delivery vans for the
distribution of Olpers’ in Multan city
 Future plans
 Rs 2.0 billion investments in capacity expansion
and marketing, including setting up of a plant in
Central Punjab.
 ENGRO Foods is making concrete efforts to
expand in and beyond Pakistan; through strategic
international alliances
 ENGRO Foods coming up with new products /
brands to expand its portfolio in the dairy
industry
 Signing a micro-financing model for dairy
farming with Pakistan Poverty Alleviation Fund
(PPAF).