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Background of the Company: Shakarganj Food Products Limited (SFPL) is a subsidiary of Shakarganj Mills Limited – a pioneer in sugar business in Pakistan. At present, SFPL is producing a whole range of dairy products as well as fruit juice concentrates. SFPL products include UHT milk; cream, flavored milk, pure desi ghee, milk powder, and fruit concentrate of mango and orange. SFPL products have been certified from HACCP certification, ISO 9000 and Kosher Certification. The SFPL corporate office is located at Lahore, while the dairy and juice divisions are in Jaranwala and Chiniot respectively. An operational dairy plant located at Jaranwala, near Faisalabad, was acquired in 2006. Nearly 80 percent of the total raw milk is supplied from this part of the country. The plant packing capacity at the time of acquisition was 75,000 litres per day of UHT liquid milk and 5 metric tonnes per day of powder milk. Plant processing and filling capacity increased to 200,000 plus litres per day of UHT. 1

Relaunch of Good Milk

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Page 1: Relaunch of Good Milk

Background of the Company:

Shakarganj Food Products Limited (SFPL) is a subsidiary of Shakarganj Mills Limited – a pioneer in sugar business in Pakistan. At present, SFPL is producing a whole range of dairy products as well as fruit juice concentrates.

SFPL products include UHT milk; cream, flavored milk, pure desi ghee, milk powder, and fruit concentrate of mango and orange.

SFPL products have been certified from HACCP certification, ISO 9000 and Kosher Certification. The SFPL corporate office is located at Lahore, while the dairy and juice divisions are in Jaranwala and Chiniot respectively.

An operational dairy plant located at Jaranwala, near Faisalabad, was acquired in 2006. Nearly 80 percent of the total raw milk is supplied from this part of the country. The plant packing capacity at the time of acquisition was 75,000 litres per day of UHT liquid milk and 5 metric tonnes per day of powder milk.

Plant processing and filling capacity increased to 200,000 plus litres per day of UHT. New Tetra Pak, Alfla Laval dairy equipment in operation. A well equipped laboratory and testing facilities at plant and milk procurement centers Skilled and well-trained staff with years of experience in the diary industry. Extensive storage and material handling facilities Research facility for new product development.

For the efforts undertaken towards the community, Shakarganj received the 2008 Intel-AIM Corporate Social Responsibility Award and was the first Pakistani company to receive this prestigious distinction.

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Introduction of the product GOODMILK:

In line with their diversification strategy the company's wholly owned subsidiary Shakarganj Food Products Limited (SFPL) commenced its dairy and fruit juice concentrates operations during 2007. SFPL began its operations with a milk processing capacity of 75,000 (seventy five thousand) liters per day which is planned to be increased to 300,000 (three hundred thousand) liters per day by 2008-2009. SFPL launched its brand of milk “Good Milk” in the year 2007.

SFPL products include UHT milk; cream, flavored milk, pure desi ghee, milk powder, and fruit concentrate of mango and orange.

Situation of Market when it was launched:

Goodmilk was introduced in the market with the two leading brands; Haleeb, Nestlé’s MilkPak enjoying a major share of the market. Then Engro Foods started its business operations in March 2006 and with the successful launch of Olpers Milk, Tarang, Olwell, and Olpers cream, it established itself as a major player in the foods business. Engro Foods had already set up two processing plants at Sukkur and Sahiwal. With the ever expanding milk collection network and processing facilities, the Supply Chain had geared them for the growing sales of their products.

Reasons to Relaunch the Product under the Brand Name of GOODMILK:

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A product related change is termed as relaunch of a product.

The product is the central point on which marketing energy must focus. Finding out how to make the product, setting up the production line, providing finance and manufacturing; the product is not the responsibility of the marketing function. However, it is concerned with what the product means to the customer.

Creating the right product is an essential step in a successful marketing mix and GoodMilk failed to understand this concept. The factors which lead to its relaunch are:

1. Taste:

The Taste of its milk was bad and smelly; however, its competitor OLPERs was great quality wise and satisfied its target market as a whole. As milk is an essential product in everyday’s life therefore customers cannot accept to compromise on quality due to which the Market share of Olpers became big and bigger with time as other leading brands were also trailing back.

2. Packaging:

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Similarity in the color scheme and design with its competitor Olpers proved a major factor in its set back and lead to a decline in the sales. This created quite confusion in product differentiation.

3. Gap in Supply to meet demand:

Getting the right product to the right place at the right time involves the distribution system.

However, Goodmilk was not readily available at the shelves of super markets and shops. It had a weak distribution system as compare to Olpers which had a strong distribution system. Although it gained popularity for a short span of time through its ad “goodmilk goodmilk….goodmilk goodmilk…” but failed as they did not keep up with the demand.

4. Low Publicity:

When Goodmilk was launched it had quite an impressive ad campaign but with time it became obsolete as they did not strive to make new creative ads in the meantime Olpers who was gaining market share came up with classy and elegant ads.

Olpers tried to relate its product with its target market by making ads on culture like Ramadan, more family oriented etc, doing various sales promotional activities. Olpers was quite active in promoting its brand whereas the makers of Goodmilk were quite dormant in creating its brand name.

Strategies for the Re launch:

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It seems like people in Karachi have finally found reasons to have milk in their diets. It becomes evident as new milk brands keep popping up all over the city every now and then; first the House of Pakola launched their Pakola Milk then Olpers came into being and now Shakarganj foods have launched their brand of milk called "Good Milk" with their slogan "Roz Roz Good Milk Piya Karo".

1. Alteration in Product Quality:

The main reason to Re launch GOOD MILK is that it has a bad smell and at the same time its taste is not very pleasant and its packaging is also similar to that of Olper's therefore, it is being re launched with all the related changes to make it viable for the consumers to drink without any smell/bad taste.

2. Advertising Strategy:

Among all the three Good Milk lacked in their Advertising Strategy the most; although their jingle was a big hit but the advertisement did not show as much elegance as the other ads of other companies did especially that of the Olper’s Milk. They should concentrate on making ads of the same level with that of the Olper’s milk since it is Good Milk’s biggest and the deadliest competitor.More over, it should focus more on identifying its product line with the consumers with increased advertising on media so that people are aware of the fact that they also manufacture many other products like cream, ghee and juices which are still unknown to the masses.

3. Reduce the gap in Supply and Demand:

Good Milk should work on the fact that its lack of availability is a big factor in its failure to reach different markets. It should expand its distribution cycle by outsourcing more vehicles and expanding its sales force team.

4. Packaging:

If we notice the packaging of Good Milk, the color scheme of white and red is noticeable yet not too overboard because of the fact that the people confuse it with the packaging of Olper’s Milk, therefore, in order to make it more attractive, we

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should re package it with different color scheme altogether.

Implementation

1. Segment Targeting and Positioning:

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 that 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 GOOD MILK'S market should be segmented. The marketers have had a number of options available to them when segmenting the market for their products.

2. Demographic Segmentation:

GOOD MILK is 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 hard to change the image of processed milk as non-nutritionist milk. Therefore it can be said that GOOD MILK would be positioned as a brand for high income earners. Due to the income factor involved it can be said that GOOD MILK target a specific social class who are health conscious and concerned about their weight.

3. Psychographic Segmentation:

On the basis of psychographics, factors such as personality traits, lifestyles and values, the marketers at GOOD MILK should segment the market towards achievers who are goal-oriented and focused on their careers, and towards the experienced 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. Good milk can target experienced because the company has given them a new set of brand and so many will make their first

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purchase because they want to try something new.Since Good Milk has a lot of competitors therefore it should focus and advertise itself in such a way that their first preference becomes Good Milk. It should target people from every age group i.e. children to old age. People should relate to its good quality, fresh and thick milk which is best for their daily use.

4. Advertising:

Advertising plays the most integral part in any product’s life for it to be widely known among the masses. Creative concepts have always been helpful; therefore, ads should be made in accordance to the culture and festivities so that it leaves an impression on people’s mindsets.Comprehensive advertising strategy for e.g. placing billboards on main and crowded streets, scheduling sale promotion activities would help lift the brand image and also placing ads on newspaper will be handful.

Conclusion:

Conclusively, we hope with our relaunch we will be able to create the Brand name of “Goodmilk” and also its product line.

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