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Hamdard Institute of Management and Sciences

Principle of Marketing (Final Term Report)

Marketing Mix Concept

Client: Engro Food

Submitted to: Prepared by: Mr. Asim Mehmood M. Assad Fahim Khan (313001)

Abdul Rehman Ashraf (313003) Syeda Tehmina Usman (313002) Zermina Sher (313005)

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TABLE OF CONTENTS

ACKNOWLEDGEMENTS .............................................................................................................. 5

ABSTRACT ................................................................................................................................. 6

WHAT IS MARKETING MIX ......................................................................................................... 7

The Importance of Marketing Mix! ............................................................................................ 7

Create Marketing Plan that Aligns with Mix .............................................................................. 7

The Marketing Mix (The 4 P's of Marketing) .............................................................................. 9

The Marketing Mix ................................................................................................................................................. 9

Product Decisions ............................................................................................................................ 10

Price Decisions ................................................................................................................................. 10

Distribution (Place) Decisions ........................................................................................................... 10

Promotion Decisions ........................................................................................................................ 11

Milking the Market ................................................................................................................. 11

Engro Food’s History ............................................................................................................... 12

Vision .............................................................................................................................................. 13

CoreValues ...................................................................................................................................... 13

DEPARTMENTS ................................................................................................................................ 13

Marketing Research conducted by Engro Foods ....................................................................... 16

ENGRO FOODS Product Range .......................................................................................................... 18

Marketing Mix of Engro Foods ................................................................................................ 21

Product ............................................................................................................................................ 21

OLPERS .................................................................................................................................................................... 21

► Every day is a celebration with our créme de la cream! ................................................................ 22

DAIRY OMUNG & TARANG ...................................................................................................................................... 22

► Tarang in your tea-cup makes for sheer bliss .............................................................................. 23

TARKA ..................................................................................................................................................................... 24

OMUNG LASSI ......................................................................................................................................................... 24

JUICES AND NECTARS .............................................................................................................................................. 24

“heavenly nectars from Engro Foods” ............................................................................................... 24

ICE CREAM .............................................................................................................................................................. 25

PERIODICALLY INCREASINING IN BRANDS .............................................................................................................. 26

ACHIEVEMENT OF ENGRO FOODS .......................................................................................................................... 26

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PRICE ............................................................................................................................................... 27

Price Decisions: ....................................................................................................................................................... 27

Pricing Strategy ....................................................................................................................................................... 27

Cost-plus pricing ................................................................................................................................................... 28

Value based pricing ................................................................................................................................................. 28

Price list of Engro Food Products ............................................................................................................................ 29

Place ........................................................................................................................................................................ 30

Supply Chain Management in Engro Foods ............................................................................................................ 30

Inbound Logistics .................................................................................................................................................... 31

Outbound Logistics: ................................................................................................................................................ 31

The warehousing and distribution of finished goods. ............................................................................................ 31

Objective of Supply Chain Management in Engro Foods ........................................................................................ 31

Engro Foods Distribution Channels ......................................................................................................................... 31

LOGISTICS ................................................................................................................................................................ 32

Promotion ....................................................................................................................................... 34

Olpers Milk .............................................................................................................................................................. 34

Advertising .............................................................................................................................................................. 34

Olper cream ............................................................................................................................................................ 34

Omung lassi ............................................................................................................................................................ 34

Comparision with other brands .............................................................................................................................. 35

Building customer based brand equity ................................................................................................................... 35

Success of olpers ..................................................................................................................................................... 35

Oplers packing ........................................................................................................................................................ 36

Milk for bones ......................................................................................................................................................... 36

Best quality ............................................................................................................................................................. 36

Unique image .......................................................................................................................................................... 37

Distinctive name ..................................................................................................................................................... 37

Credibility ................................................................................................................................................................ 37

Measuring customer-based brand equity ............................................................................................................... 37

Managing customer-based brand equity ................................................................................................................ 37

Social Responsibility ................................................................................................................................................ 38

Conclusions ............................................................................................................................. 39

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ACKNOWLEDGEMENTS

Firstly we would thank Allah for giving us the opportunity and the

resources to be able to do something productive with our lives.

Without His blessings we would not have been able to come as far

as we have.

Then our sincere thanks to Sir, Asim for helping us throughout this

report. His guidelines have been very useful for us in preparing

this report. He helped us find new ways of being innovative and

creative.

This report would not have been possible without his

cooperation and continuous direction.

Last but not the least we would like to thank our families for their

incessant support and approval.

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ABSTRACT

This report is about the marketing mix of Engro Foods 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 Olpers 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 Olpers 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.

Olpers.

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WHAT IS MARKETING MIX

The marketing mix is one of the most famous marketing terms. The marketing mix is the tactical or

operational part of a marketing plan. The marketing mix is also called the 4Ps and the 7Ps. The 4Ps

are price, place, product and promotion. The services marketing mix is also called the 7Ps and

includes the addition of process, people and physical evidence.

The concept is simple. Think about another common mix - a cake mix. All cakes contain eggs, milk,

flour, and sugar. However, you can alter the final cake by altering the amounts of mix elements

contained in it. So for a sweet cake add more sugar!

It is the same with the marketing mix. The offer you make to your customer can be altered by

varying the mix elements. So for a high profile brand, increase the focus on promotion and

desensitize the weight given to price.

The Importance of Marketing Mix!

Create Marketing Plan that Aligns with Mix

The importance of marketing mix is often overlooked in strategy. Create marketing plan strategies

for your business that include writing action plans, building integrated marketing communication

mix tactics, developing differentiation and positioning statements, and more.

Marketing being an integral part of operations in a company, companies often invest and allocate substantial financial resources and efforts into marketing activities. In the current scenario it is necessary to be accurate and efficient in managing the marketing resources and the budget allocated to the activities. Choosing an effective strategy with right combination of marketing activities is a challenge in a scenario where you have multiple options, multiple segments and product offerings.

The marketing mix would necessarily consist of the activities like sales, promotions & advertisements (both online and offline), duration of the activities, timing and frequency of the activities depending upon the product and its variants, the target segment, the distribution network, channel reach, the

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region, size and based on the planned marketing activities understanding the potential of the market through market research.

The benefits of the efficient management of these activities are precision in reaching out to the target audience, understanding the returns by each of the activities, reduction in cost by cutting down doubling effect & effective management in overall efforts, time & cost.

Introducing the concept of opportunity cost here, when accompany allocates human resources, financial resources, time and efforts targeting the planned marketing segments, it is choosing between markets and marketing options bases on expected results. Hence the activities are chosen between multiple options and if the frequency and duration of activities are precisely managed; the marketing efforts will yield better results with improved efficiency.

The management of marketing mix acts as a regular audit on the marketing activities being carried out and can be closely monitored to yield better results. This helps in real time coordination on the marketing efforts.

Though in practice companies use business Intelligence software and KPIs for the understanding of the marketing activities and product performance across targeted markets; it is necessary to understand in a constantly changing business environment with changes in technology, external business environment and governing policies; it becomes difficult to act upon the KPIs and will have to rely on intuitive understanding of the business strengths and environment.

In a scenario where consider promotional options of news & media advertisements, sponsorships, online marketing, hoardings, tradeshows are cost intensive it is a dilemma to choose the right mix in targeting the desired market segments.

In services industries the marketing is dependent on the online marketing and direct sales, where as in a product based or B2B manufacturing industry it is dependent upon the strong distribution channel & network, in a FMCG, Telecom, Consumer Durables, industries it is dependent again on the distribution network but also on advertisements and promotions through the media network. In investment intensive industries to a major it is dependent upon the activities of focus with the background of clientele and past projects delivered.

General mistakes companies make in reaching to a market segment are overlapping of activities (channels) for the same target segment and product. This generally happens in services, FMCG sector where the end user is the individual consumer. It is important to choose limited marketing channels for the targeted market segment to make sure the customer does not get irritated by the marketing activities.

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The Marketing Mix

(The 4 P's of Marketing)

Marketing decisions generally fall into the following four controllable categories:

Product Price Place (distribution) Promotion

The term "marketing mix" became popularized after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's after James Culliton had described the marketing manager as a "mixer of ingredients". The ingredients in Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that today are known as the 4 P's of marketing, depicted below:

The Marketing Mix

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These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response.

Product Decisions

The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made:

Brand name Functionality Styling Quality Safety Packaging Repairs and Support Warranty Accessories and services

Price Decisions

Some examples of pricing decisions to be made include:

Pricing strategy (skim, penetration, etc.) Suggested retail price Volume discounts and wholesale pricing Cash and early payment discounts Seasonal pricing Bundling Price flexibility Price discrimination

Distribution (Place) Decisions

Distribution is about getting the products to the customer. Some examples of distribution decisions include:

Distribution channels Market coverage (inclusive, selective, or exclusive distribution) Specific channel members Inventory management Warehousing

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Distribution centers Order processing Transportation Reverse logistics

Promotion Decisions

In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include:

Promotional strategy (push, pull, etc.) Advertising Personal selling & sales force Sales promotions Public relations & publicity Marketing communications budget

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, Olpers.

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 endeavors 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

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challenges and perceptions still have to be overcome by the PLMCs.

The least important one, perhaps, is tradition. Milk, even amongst the most urbanized 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, loose milk is cheap at approximately Rs 24 per

liter, while processed milk is priced at approximately Rs 38 per liter. In Sindh, however, the price

differential between loose (Rs 28) and processed milk (Rs 38) is only Rs 10.

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 Food’s 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.

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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."

CoreValues

(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

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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 centers and veterinary doctors providing service to the farmers.

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(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 Assurane

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 & 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.

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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.

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 Olpers. 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

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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 Olpers 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 Olpers in the market are Olwell diet milk and Olpers cream.

The organization has further plans to expand more in this sector and introduce more products

related to milk.

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ENGRO FOODS Product Range

Sheer indulgence in every sip comes Embrace the lighter side of milk and

only with the rich creamy thickness of feel years lighter with our low-fat milk

Olper's. Give your day a fresh start with Olper's! Olper's lite, for a guilt-free existence!

Savor the flavor of tradition and enjoy Enhance the culinary experience with

the rich, aromatic flavors of badam, Olper's Cream - a rich celebration of

zafran and rose in every sip of milk with life at its creamy best.

Olpers' flavored milk!

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Experience sheer bliss in a tea-cup with Get nutrition and the best value for

Tarang, our special tea creamer for money with omung dobala.

that perfect cup of tea.

Enjoy our heavenly nectars extracted Rise up to a better life with our all

from pure fruits to revitalize you with purpose dairy brand Omung available

a much-needed boost, anytime at the ultimate price and in the best

anywhere. Only with Olfrute. Quality.

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A dash of Tarrka in your favorite cuisine With its rich, creamy taste, high

is all it takes to bring out the flavor of nutrition content and wide-range of

your food and leave you craving for chunky flavors, get more from your

more. ice-cream with Omore!

Enjoy home-made Lassi in the Enjoy home-made Lassi in the

convenience of a Tetra Pak. Refresh convenience of a Tetra Pak. Refresh

your day with our two delicious flavors. your day with our two delicious.

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Marketing Mix of Engro Foods T h e m a r k e t i n g m i x c o v e r s a l l t h e a s p e c t s w h i c h p l a y a n i m p o r t a n t r o l e i n t h e p h y s i c a l appearance, affordability and the way a product is placed in front of the consumer. It helps i n b u i l d i n g a n i m a g e w h i c h w o u l d i n t h e e n d h e l p t h e c o m p a n y t o c a p t u r e h u g e m a r k e t .

Product

OLPERS

Engro Foods was established in 2005, and it is subsidiary company of Engro Corporation. Engro Foods launched its first product with brand name “OLPERS”. At that time other competitive products was widely available in market such as “Nestle and Haleeb”. In next coming months and years “OLPERS” gained preference in the market over established brands after launched due to its healthy features and properties of its product. 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.

Available in 4 SKUs of 200 ml, 500ml, 1000 ml and 1500 ml value packs, today Olper's combines

nutrition, value and taste to deliver an unforgettable consumer experience to every individual within

every house-hold where the day begins with Olper's.

► After the success of “OLPERS” ,EFL (Engro Foods Limited) launched

“OLPER’s LITE”

The ideal low-fat, hi-calcium milk for adults who want to stay healthy, active and fit for life, Olper's Lite contains all the inherent nutrients of milk that can boost energy, without the extra calories that cause weight gain.

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Rich in iron and calcium content, Olper's Lite has been specially formulated to provide nutritional benefits to the growing number of health conscious consumers in Pakistan, who seek products that can keep their calories in check whilst ensuring their health, nutrition and well-being.

Available in liquid format, today Olper's Lite is the preferred low-fat milk in the market with all the necessary ingredients to help adults achieve optimum health and keep it light by staying calorie and guilt free!

► Specially for the children who run away from smell of traditional milk

EFL launched flavored milk. “OLPER Badam Zafran Milk”

Inspired by the traditional flavors of badam, zafran and rose, Olper's

Flavored milk caters to a diverse cross-section of consumers, with a

penchant for natural ingredients infused in rich, creamy and aromatic milk.

Launched in 2011 and available in 250 ml packs, Olper's Badam Zafran and

Olper's Rose present

the rare combination of great tasting milk fused with the natural flavors of badaam, Zafran and

Rose for discerning customers seeking a wholesome experience of nutrition, taste and tradition.

Immensely popular within a growing segment of the market, Olper's Flavored Milk is the best

choice for everyone craving a taste of badam, zafran and rose in every glass of milk.

► Every day is a celebration with our créme de la cream!

The cream of all creams, Olper's Cream is a rich, creamy delight that has initiated a new trend not just amongst baking enthusiasts and dessert makers, but also within conventional households, where it is generously splurged over every-day food items as the primary ingredient to enhance the culinary experience by transforming it into a scrumptious creamy sensation. Steadily garnering consumer loyalty and a growing market share since its launch in 2006, Olper's Cream ranks among the country's leading brands in the UHT cream category as it continues to make meal-times, as well as break-fast and afternoon tea rituals a rich, creamy celebration day after day.

DAIRY OMUNG & TARANG

After successful launched of “OLPERS” brands EFL launched new brands with name “DAIRY TARANG” & “DAIRY OMUNG”

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While “OMUNG DOBALA” is the cream.

► Sourced from pure milk, Dairy Omung is our wholesome all purpose dairy brand

that provides price and quality conscious consumers with a premium milk

product at an affordable price.

Specifically targeting house-wives who consume loose milk and are

responsible

for the health and well-being of their family.

► High nutrition at a very low price

Launched in 2010, Omung Dobala is our low priced high nutrition

vegetable, fat cream that offers a healthier alternative to dairy based UHT

cream.

A leading asli desi ghee brand that combines vegetable oil with excess fat extracted from milk,

Omung Dobala aids good health by helping consumers strike a much needed balance between

eating right and living well.

► Tarang in your tea-cup makes for sheer bliss

Pakistan's No. 1 tea-whitening brand, Tarang is a specialized tea creamer that makes the perfect cup of tea guaranteed to transport tea-lovers into a state of sheer bliss any time of the day.

The only team-creamer that combines convenience with lasting quality and real value for money, Tarang is available in liquid and powder formats that further extend the brand's appeal to a wider audience.

With its distinctly fresh aroma, rich taste and strong focus on enhancing the tea-drinking experience for everyone, Tarang has evolved into our biggest and most profitable brand since its launch in 2007, after securing a firm place in the hearts of millions of tea-enthusiasts all across Pakistan

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TARKA

Launched in 2005, Tarrka is EFL premium desi ghee distinct for its pure flavor and rich aroma. A dash of Tarrka in your favorite cuisine is all it takes to bring out the flavor of your food and leave you craving for more.

OMUNG LASSI

Engro Foods Launched fresh Lassi specially for the children

And the people who are living in the urban areas of the country.

JUICES AND NECTARS

“heavenly nectars from Engro Foods”

The launch of Olfrute beverages in 2010 is our first non-dairy initiative and a major step forward towards diversifying product portfolio in high potential markets.

A refreshing fruit beverage extracted from pure fruits to entice and delight even the most discerning taste-buds, Olfrute juices are available in two SKUs of 1000 ml and 200 ml and offer a wide assortment of exciting fruity flavors including red grape, apple, guava, green cock-tail, mango, apricot and orange to cater to a diverse spectrum of urban consumers.

With a highly enthusiastic consumer response to our extensive range of fruity nectars, we are confident that Olfrute juices will soon become the leading brand in the juices and nectars category.

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ICE CREAM

Launched in 2009, Omoré's scrumptious range of ice-cream and frozen desserts are a glorious treat for everyone, be it children or adults.

With its rich, creamy taste, high nutrition content and wide-range of flavors and formats, Omoré is a delectable ice-cream and frozen desserts brand that seeks to cater to a wide range of consumer groups and taste palettes.

Available in more than 30 SKUs including ice-lollies, tubs, bricks, cups, cones, and sticks of different sizes, Omoré has become a household name across Pakistan.

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PERIODICALLY INCREASINING IN BRANDS

ACHIEVEMENT OF ENGRO FOODS

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PRICE

“Price is the amount of money charged for a product or service.”

It can also be define as:

The sum of values that consumers exchange for the benefit of having or using the product or

service.

Pricing is the only element in the marketing mix that produces revenue; all other elements

represent costs.

Price is also one of the most flexible elements of the marketing mix unlike product features

and channels commitments, price can be changed quickly.

Price includes the price strategy of the company for its products. How much customers should

pay for a product? Pricing strategy not only related to the profit margins but also helps in

finding target customer. Pricing decision also influence the choice of marketing channels.

Price Decisions:

Price strategy

List price

Payment period

Discount

Financing

Important note: Engro food never works in credit terms.

Pricing Strategy

According the marketing plan of Engro foods, they are using Premium Pricing Strategy the

reason behind the premium pricing is that they are producing Premium quality product and

they are doing premium positioning of their product.

The pricing strategy for Engro foods is as such that it is differentiating its products from the

rest of the competitors. Its prices are higher than the local brands and are less than the

international brands. The price of Engro foods products is competing with both the local

market and international brands.

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Pricing strategy requires continuous monitoring because of changing external conditions, the

actions of competitors and the opportunities to gain a competitive edge through pricing

action.

An Engro food uses two types of pricing strategies for pricing their

products: 1. Cost-plus pricing

2. Value pricing

Cost-plus pricing:

Cost-plus pricing Is used when a standard markup is added to the cost of the

product.

An Engro food uses this strategy while launching its new Products.

They do so as to check their demand in the local markets before

starting their production.

Firstly, they analyze the total cost that is incurred in the process of production of new

product(s), company's marketing and selling expenses and company's margin (the margin is

kept to the minimum in this case).

Secondly, if the product succeeds then they start manufacturing it at large scale. But, if

unfortunately, that product(s) does not get the expected acceptance by customers, then they

stop the production of such product(s)

ADVANTAGES OF COST-PLUS PRICING

The main advantages of Cost-plus pricing are:

They are more certain about costs than about demand.

They do not have to make frequent adjustments as demand changes.

Value based pricing:

This strategy is about charging just the right combination of quality and good service at a fair

price.

Engro foods uses this strategy For its well established Products

This strategy helps Engro foods Generate its revenue from its existing Products

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Price list of Engro Food Products

Product Pack Size Packs per Carton Price to Retailer

per Carton

Price to Consumer

Per Carton Per Pack

Olper Milk 1 Liter 1*12 12*84=1008 1080 90

Olper Milk 1500 ml 1*8 8*122=976 1040 130

Olper Milk 250 ml 1*24 24*24=576 648 27

Olper Cream 200ml 1*24 24*64=1536 1680 70

Tarang Milk 250ml 1*27 27*21=567 621 23

Omung Dobala 250ml 1*27 27*18=486 540 20

Omung Dobala 1000ml 1*12 12*67=804 840 70

Dairy Omung 250ml 1*27 27*19=513 594 22

Omung Lassi

Meeti 200ml 1*24 24*13=312 360 15

Omung Lassi

Salti 200ml 1*24 24*13=312 360 15

Omor’e Kulfa

ice-cream 1Litre 1*1 1*140=140 160 160

Omor’e Kulfa

ice-crema 100ml 1*10 10*31=310 350 35

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Place

According to Engro Foods Limited EFL, “in order to succeed, you should always capitalize

on your strengths 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

Olpers 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, Olpers has gained a proper shelf placement in the

presence of competitors like Nestle and Haleeb.

Supply Chain Management in Engro Foods

Customer Need

(Requirement

defined)

Raw Material

Acquisition from

collection center

Transportation

to Plant

Storage

Processing

Packaging

Ware Housing

Final Consumer

(requirement

Fulfill)

Retailers

Whole sellers

Distribution

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Inbound Logistics: The receiving and warehousing of raw materials and their distribution

to manufacturing as they are required.

Outbound Logistics:

The warehousing and distribution of finished goods.

Objective of Supply Chain Management in Engro Foods

The core objective of supply chain at Engro is that Customer needs are met by optimum ways.

Overall objective is to offer customer a level of value that exceeds the cost of the activities, thereby

Resulting in a profit margin.

Engro Foods Distribution Channels

• 7 Distributors (General Trade)

• ICA (International Chain Account)

• Makro (10% of total Sales)

• Metro (10% of total Sales)

• Food Services

• 2 Distributors (10% of total Sales)

Sales

The Sales of Engro Foods products are divided into

1. Primary Sales

2. Secondary Sales

Primary Sales: Refers to the sales of the batches of products by the manufacturer to the

distributors.

Secondary Sales: Refer to the sales by the distributors to the retailers from where the goods are

eventually sold to the ultimate consumer. So Engro Foods is the following the

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traditional channel of distribution that involves some intermediaries between the transfer from

producer to the consumer.

M

LOGISTICS

For the Sake of transportation of the finished goods from the Engro Foods maintained warehouses

that are situated right next to the facility until the distributors, a fleet of trucks is maintained by

Engro Food themselves while part of the transportation has also been outsourced or “third party”

Logistics. A third party logistics provider is a firm that provides outsourced or “third party” logistics

Services to companies for part or sometimes all of their supply chain management functions.

Third party logistics providers typically specialize in integrated warehousing and transportation

Manufacturer

(Engro Foods)

Distributors

Retailers

Final Consumer

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services that can be scaled and customized to consumer’s need based on market conditions and the

Demands and delivery service requirements for their product and materials.

As far as responsibility of distributing the goods is concerned, the out reach of the Engro Foods and

the third party logistics is limited to the distributors only. Engro Foods has almost 200 distributors all

over the Pakistan. Some of the distributors deals with larger areas and larger orders while others are

smaller ones. For the larger orders finished goods are transported directly to the distributors agreed

upon the point of delivery, while for the smaller distributors goods are also being delivered and

deposited in warehouse facility maintained by Engro Foods in some important locations all over the

Pakistan. The network distributions is very extensive and extends all the way to Afghanistan.

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Promotion OLPERS MILK 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.

Olpers Milk

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

Advertising

Graphics of the ad are excellent except the body copy which is quiet overloaded with information. TVC however, is excellent. The Signature ad (the product intro ad) was a 125 seconds ad with only 3 seconds of branding! This type of advertising has never been practiced in Pakistan. Using celebrities like Shan is not a good option as he has already developed his association with Mobilink. But overall Olper’s has done a great job in designing and executing its ad campaign.

Olper cream

Color is soothing, caption is great. But the picture of the pastry is not attractive at all, the cream is barely there. It should be mouth watering picture of a desert with lots and lots of cream on top. Life's a dessert is a boring statement. If you are a creative team, you can for sure come up with something new and fun!

Omung lassi. Another product of olpers. The taste that make crazy. Lots of fun and make life heathy. Its sales are too high. Every one like this product. Oplers make profit with this product. Still people demands are high every day for this product.

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Comparison with other brands

The brand is positioned rather too narrowly towards SEC A. Nestlé’s NesVita and Calcilock campaign was closer to a normal Pakistani consumer. Secondly, there are certain boundaries and cultural values that should be respected. Olwell ad is too much for me to digest and I have no options but to switch the channel. Engro has over done it and to make things worse it’s not as clear and well communicated as NesVita was.

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 Olpers 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 Olpers 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 Olpers that is how people have associated Olper’s

Success of olpers

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. Olpers 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.

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Oplers packing

Although Olpers 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. Olpers 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. Olpers provides its customers with functional and experiential benefits.

Milk for bones

The functional benefits include healthy bones, high calcium, good taste, while experiential benefits are that every morning starts with Olpers 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 a ttract customers enough to make them buy it, thus the brand attitude In this case helped the brand to form the basis for customer behavior. Olpers has favorable, strong and unique brand associations in customers’ minds.

Best quality

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 Olpers and that is ENGRO foods. Usually people thin Olper’s as a sub brand of ENGRO foods. Due to this reason customers perceive Olpers’ as a high quality brand that will come up to their expectations.

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Unique image

Olpers 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, Olpers enjoys higher profit margins and increased marketing communication effectiveness.

Distinctive name

Olpers 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

Credibility

Olpers 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 Olpers and one that has strongly influences the positioning of Olper’s. It has added to the credibility of Olpers.

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 Olpers.

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. Olpers is concentrating on the emotional aspect in their ads in order to focus on the core need of customers that can be satisfied. Olpers has also funded Women’s

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exhibition in Karachi a few months ago and currently is sponsoring cricket World Cup 2007, and further adding more value to the brand and managing customer-based brand equity.

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.

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Conclusions

Engro Foods is among the biggest and fastest growing conglomerates in Pakistan with a vision to cater to local needs with products conforming to global standards.

Highly passionate about providing millions of people across the length and breadth of Pakistan and

beyond with the ultimate brand experience, our product portfolio comprises some of the country's

biggest and best selling brands

Engro Food is a quality conscious company and customer focus company. Customer is its first priority.

Engro launched only that product, that appeal customers and satisfy customers needs and wants.

Engro foods is also customer health conscious company. And their products fulfills also necessary

vitamins.

Price is calculated according to customer affordability and easily available in all over the country.

By using different types of promotion methods Engro creates the awareness in the public.