This document provides a summary of a marketing analysis project presented by four students at Superior University Lahore on Engro Foods. It includes an introduction, table of contents, acknowledgements, history and background of Engro Foods, their vision, mission and core values. It also summarizes Engro's diversified business portfolio, their brands, business segments targeted, sales setup, departments, production process, and concludes with interviews conducted and references. The document analyzes Engro Foods' market performance and strategies.

1. Final Project
On
“Principals of Marketing”
On the topic
“Marketing Analysis of ENGRO Foods”
Presented To:
“Sir UMER SAUD”
Presented By:
Mutahir Bilal MCE 12147
Salman Anjum MCE 12155
Mubeen Abdur Rehman MCE 12151
Zuhaib Ahman MCE 12152
Class M.Com
Semester 2st Evening
Superior University
Lahore.
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2. Table of contents
Acknowledgements …………………………………… 4
Introduction …………………………………… 4
History …………………………………… 5
Vision …………………………………… 5
Mission …………………………………… 6
Core Values …………………………………… 6
Diversified Portfolio of Engro Pakistan ……………. ………. 6
Our Brands …………………………………… 8
Business Segments Being Targeted…………………… ………. 11
Sales Setup of the Company ………………………….......... 12
Departments …………………………………… 12
Production Process …………………………………… 14
Sales …………………………………… 16
Market Analysis …………………………………… 16
Segmentation …………………………………… 16
Silent Feature of SBU’s …………………………………… 19
SWOT Analysis …………………………………… 21
Market Share …………………………………… 24
Profit of Various SBU’s …………………………………… 24
Competitive profile matrix……………………………….. 25
Strategy adopted for Market growth……………….. 25
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3. BCG Matrix …………………………………… 26
Interviews Questions …………………………………… 29
Conclusion …………………………………… 31
References …………………………………… 31
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4. 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 Mr. Haroon Hafeez 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.
We would also like to thank Mr. Farrukh, Regional Sales Officer at ENGRO Foods who
spare sometime for us so that we could conduct the interviews with him. It is true that this
response in the interview have been very helpful.
Last but not the least we would like to thank our families for their incessant support and
approval.
Engro Food Limited:
Engro Foods Limited was officially launched as a fully owned subsidiary of Engro in 2004.
Using dairy as a stepping stone to enter into the food business, the Company has established
state-of-the-art processing units in Sukkur and Sahiwal, along with an ice cream production
facility in Sahiwal. Top quality brands like Olper’s, Olwell, Tarang, Omore and Owsum have been
successfully launched under the helm of Company’s dairy products. To support these brands
and their highest standards of quality, Engro Foods has invested heavily in milk processing and
milk collection infrastructure. Engro Foods now plans to venture beyond the dairy sector. In this
pursuit, grain and fruit markets have been analyzed in great detail. Engro has launched its new
brand in fruit juices called as Olfrute. Engro Foods’ vision is “Elevating Consumer Delight
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5. Worldwide” and the Company aims to generate a significant portion of its revenue
from foreign operations.
EngroFoods’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 200,000liters 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 pivotal role in
poverty alleviation and improving livelihoods of the poor in the milk collection areas.
Engro Foods will work with the Pakistan Poverty Alleviation Fund and its three partner
organizations to help implement sustainable business models that increase farmer’s
profitability and develop a positive social and business climate for growth and expansion of
livestock and other forms of value added agriculture.
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."
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6. MISSION STATEMENT:
(Our mission is twofold) “To help farmers maximize their farm
produce by providing quality plant nutrients and technical services upon
which they can depend. To create wealth by building new businesses
based on company and country strengths in Petrochemicals, Information
Technology, Infrastructure and other Agricultural sectors. In pursuing the
mission we shall at all time be guided in our conduct and decision making
by our Core Values.”
Core Values:
o Leadership
o Innovation
o Diversity and International focus
o Quality and continuous Improvement
o Candid and open communications
o Individual growth and development
o Enthusiastic pursuit of profit
o Ethics and integrity
o Safety, Health and Environment
Diversified Portfolio of Engro Pakistan:
Our diversified businesses represent our immense growth potential to generate
opportunities for creating growth potential to generate opportunities for creating and
sustaining value for our stakeholders.
Engro Fertilizers Limited:
Agriculture accounts for 25%of GDPand45% of
employment in Pakistan Second largest Urea producer
of Pakistan. Capacity975 KT/A) -Market share20%
Second highest phosphates sales (~400KT/A)-
MarketShare23% ECPL’s Margins areby far the best in
the industry. Zarkhez( NPK) Market leader -Capacity160 KT/A -MarketShare95% Urea
shortage ex pected to grow to1.2million tons/annumby2010. World’s largest single-train
Urea plant of 1.3million tons being setup at a cost of US$ 950 million. On
commencement of operations in mid2010, cash fixed costs of the new plant will be a
third of the existing plant; scale& brown field synergies Gas consumption at the new
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7. plant willbe15%less than the existing plant. Engro’s Daharki complex will
become the world’s fifth largest Urea production site; 2.28million tons, 3
plants.
Engro Foods Limited:
Established in2005, a 100%owned subsidiary First
investment of dairy plant Processed milk market is
growing at approx. 20% per annum Olpers achieved peak
market shares of 12.3%within6months of launch Other products launched-Olpers
Cream, Olwell High Calcium Low Fat Milk (Premium Brand) Plans to expand product
portfolio Milk processing capacity to increaseby200%to200million liters annually Will
become the only company in Pakistan covering the entire milk catchments area Already
has the second largest chilled milk collection system in the country Distribution network
to double from 58 towns to119 towns by the end of 2007 JV with global food major in
advanced stage of negotiation.
Engro Polymer & Chemicals Limited:
Established in 1999 80-20 JV with Mitsubishi Corp. Pakistan’s only
PVC manufacturing plant; facing buoyant domestic demand since
2006. Successfully placed 22% of sales in diverse export markets
from Australia to East Africa in prior years(2004 -2005) Expansion
and back integration underway-imported ethylene + new caustic
soda plant ;EDC/VCM/PVC.
Engro Energy Limited:
Established in2006-100% owned subsidiary Pakistan is
facing growing energy deficit Energy consumption has
been growing at 7% per annum Setting up 220 MW gas
based power plant at a cost of $220 million with
commercial operation in 2009 Short-listed along with 3 other companies for
privatization of Jamshoro Power Company.
Engro Innovative Automation Limited:
Acquired majority stake(51%)in a knowledge based
company Innovative Engineering & Automation Ltd in
2003 Market Leader in domestic Industrial Automation
Honeywell distributor in Pakistan Expanding
internationally to synergize, and benefit from lower costs at home and higher demand
a broad Now operating in Dubai, UAE which contributes 25% of revenue and half of
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8. the profit Company’s first IP product ‘iboiler´ launched internationally in
2006 Acquired an automation company in the USin Dec. 2006; mandated to
develop outsourcing opportunities.
Engro Vopak Terminal Limited:
A50-50 JV with Royal Vopak of Holland; established 1997 Royal
Vopak is the world’s largest independent tank terminal
operator Engro Vopak handles 70% of liquid chemical imports
in Pakistan. Setting up our country’s first Cryogenic facility for ethylene imports Well
positioned for setting up proposed LNG terminal under active consideration of the
government; Cost US $350 -400 million.
Engro Asahi Polymer &Chemicals. Limited:
Established in 1999. 80-20 JV with Mitsubishi Corp. Pakistan’s
only PVC manufacturing plant; facing buoyant domestic demand
since 2006 Successfully placed22%of sales in diverse export
markets from Australia to East Africa in prior years(2004 -2005) Expansion and back
integration underway-imported ethylene-new caustic soda plant; EDC/VCM/PVC
OUR BRNADS:
Sheer indulgence in every sip comes only with the rich creamy thickness of
Olper's. Give your day a fresh start with Olper's!
Embrace the lighter side of milk and feel years lighter with our low-fat milk
Olper's lite, for a guilt-free existence!
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9. Savor the flavor of tradition and enjoy the rich, aromatic flavors of badam,
zafran and rose in every sip of milk with Olpers' flavored milk!
Enhance the culinary experience with Olper's Cream - a rich celebration of
life at its creamy best
Experience sheer bliss in a tea-cup with Tarang, our special tea creamer
for that perfect cup of tea.
Get nutrition and the best value for money with omung dobala.
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10. Enjoy our heavenly nectars extracted from pure fruits to revitalize you with
a much-needed boost, anytime anywhere. Only with Olfrute.
Rise up to a better life with our all purpose dairy brand Omung available at
the ultimate price and in the best quality
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.
With its rich, creamy taste, high nutrition content and wide-range of
chunky flavors, get more from your ice-cream with Omore!
Enjoy home-made Lassi in the convenience of a Tetra Pak. Refresh
your day with our two delicious flavors.
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11. Enjoy home-made Lassi in the convenience of a Tetra Pak. Refresh your
day with our two delicious flavors.
BUSINESS SEGMENTS BEING TARGETED:
Business Segments.
Export Trade
Services
Trade:
He has also been involved in international trade for the last six years, focused mainly on
driving profits through trading positions.
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12. Food service:
Engro Foods Limited is also engaged in the food services by supplying to PIA,RAILWAYS
& ALLTHE MAJOR RESTURANTRS. Company is already supplying to the hotels; PSL was in
contract with Nestle for the year but Nestle was unable to keep up the supply in this lean
period E.F.L supplied the stock to some of these hotels. E.F.L has entered into contract with PSL
and it will be supplying to a chain of hotels for the next year.
Exports:
Engro is already considering exports to Afghanistan.
 Trade sector 80 %
 Others (Food service& Exports) 20%
SALES SETUP OF THE COMPANY:
The Company is operating 5 Regional Offices located in important cities of the Pakistan
to handle the domestic business. These regions are
 Karachi
 Multan
 Lahore
 Rawalpindi
 Peshawar
Departments:
1. Administration
Efficient management of all administrative affairs of Engro Foods (Pvt.) Limited is the job
of the Administration department. From legal matters to general day-to-day operations of
the office, the Administration department ensures that all affairs run smoothly.
2. Finance and Accounts
The Finance and Accounting departments at Engro Foods are responsible for the total
financial management of the different businesses of the company. From the usual
accounting statements and sheets to risk and portfolio management, the team ensures that
every rupee coming into and out of the Companies' pockets is properly documented and
audited.
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13. 3. Human Resource
The Human Resource department at Engro Foods (Pvt.) limited spearheads there
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. 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.
6. Management Information System:
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.
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14. 8. Quality Assurance
Quality Assurance is strictly followed in Engro Foods. Qualified food technologists at this
department ensure that highest quality parameters are adhered to through all steps of production
and that the products reach the consumers as per promise.
9. Supply and Distribution
This department ensures timely and effective distribution of the products to different shops and
stores spread all across Pakistan. From transportation management to obtaining route permits and
approvals, is done by this department.
THE PRODUCTION PROCESS
Chlling and UHT
Pasteurization Pacaging
Storage Treatment
Chilling and Storage: The production process at Engro Foods consists of four steps. Firstly, raw
milk is collected from milk collection centers by tankers and brought to plants for processing.
On arrival, the milk is tested for appearance, smell and temperature, and a sample is taken for
analysis in laboratories. A series of tests are carried out relating to the compositional and
hygienic quality of the milk. Subject to the satisfactory completion of these tests, the milk in the
tanker is then unloaded into a silo. The milk processing factories cool the raw milk at a
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15. temperature of 5°C or less into cooling tanks prior to being passed through heat
treatment facilities. The chilling process helps to curb bacterial growth in milk.
Pasteurization:
Next comes the pasteurization stage, which is the process of boiling the milk and then
immediately cooling it to a lower temperature. The milk is pasteurized at 85˚ C, which helps to
kill 98% of the germs present in the milk. Pasteurization serves as the separation point of raw
milk into different products, which include Tarang, Olpers and Olwell. At this point the cream
and fat are removed from the milk and other special ingredients are added along with it to the
10 Supply Chain Management at Engro Foods milk as per the requirements of each product. For
example, Tarang is a high-fat tea whitener and therefore it needs more cream content and
different ingredients as compared to a product like Olwell, which is low fat and requires less
cream. The milk after pasteurization is then standardized as prescribed by the Pakistan Pure
Food Laws at 35% Fats and 8.9% SNF (solidnon fats).
UHT Treatment:
The pasteurized milk is then passed through the UHT (Ultra Heat Treatment). This is the most
sophisticated and advanced stage in milk processing. In this process the milk passes through
140 degree centigrade in the first 3 seconds and it is then immediately cooled to 20 degree
centigrade in the next 5 seconds, which in turn kills all the bacteria. The UHT process can be
achieved either through indirect or direct heating systems. In the indirect method the milk is
heated by steam passing through stainless steel pipes outside milk tanks. In the direct method
either the steam is directly injected into the milk or the milk is forced through a fine nozzle into
a tank filled with steam. Engro Foods makes use of the direct system for the UHT process.
Packaging:
Following the heat treatment, the milk is cooled in a sterile vacuum chamber. After the heat
treatment the milk is cooled and packed in Tetra Pak cartons as soon as possible to prevent
contamination. The packaging process is also carefully monitored. The packages undergo
stringent controls to check that they are sterilized. The milk is then filled into the cartons under
aseptic conditions. The cartons are filled automatically and continuously under completely
sterile conditions and then heat-sealed.
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16. SALES:
The sales of Engro foods’ products are divided into:
 Primary Sales
 Secondary Sales
Primary Sales refers to the sales of the batches of products by the manufacturer to the
distributors. Secondary Sales refers to the sales by the distributors to the retailers from where
the goods are eventually sold to the ultimate consumer. So Engro Foods is following the
traditional channel of distribution that involves some intermediaries between the transfers
from producer to the consumer.
Manufacturer Final
Distributors Retailers
(Engro Foods) Consumer
Market Analysis:
Segmentation:
It is difficult for any one company to engage in mass
production, mass distribution and mass promotion for its product. The
complexities arise from the proliferation of advertising and distribution
channels and the high costs associated with reaching a mass audience.
Therefore, companies segment the market so that they can target the
group of customers who share similar needs and wants. The milk
sector shows a market that has homogeneous preferences that is the
consumers have similar preferences. They want milk to be white,
carefully processed, and good for health and bones. Keeping these
things in mind Engro foods market has been segmented. The
marketers at Engro Foods have had a number of options available to
them when segmenting the market for their products.
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17. Demographic segmentation
Engro products are not bounded to any particular age, gender or lifecycle stage. The
brand is meant for all the users in higher upper or middle class families. Even though the brand
calls for a small percentage of an individual’s income but lower class wouldn’t want to buy the
brand maybe because they are price sensitive or because they believe lose milk is better than
processed milk and has all the nutrients that the processed milk lacks. However all the
companies in the milk sector are trying to change the image of processed milk as non-
nutritionist milk? Therefore it can be said that Olper’s has been positioned as a brand for high
income earners. Due to the income factor involved it can be said that Engro foods target a
specific social class who are health conscious and concerned about their weight.
Psychographic segmentation
On the basis of psychographics, factors such as personality traits, lifestyles and values,
the marketers at Engro food’s have segmented the market more towards achievers who are
goal-oriented and focused on their careers, and experiences those who are seeking variety in
the milk sector. For example the ads for Olwell mostly show achievers who want to be
successful, have high aims and are already doing quite well in their concerned fields. The
Engro’s products have targeted experiences because the company has given them a new set of
brand and so many will make their first purchase because they want to try something new.
Olper’s ads also target believers, traditional conservative people with concrete beliefs. The ads
for Engro’s show the beliefs of healthy life with processed milk and plays on the emotional
aspect more.
Behavioral segmentation
Engro’s products have been segmented on the basis of benefits that consumers seek in
the milk. In this case, people look for a brand that can be used for all purposes from drinking to
tea whiteners as well to feed the animals. The ads also show that consumers should increase
their milk consumption for example with every tea they should use Olper’s, every morning they
should drink Olper’s and everyday they should feed their pets with Olper’s milk. There may be
some hard core loyal in the milk sector. Loyalty maybe towards such established brands as
Nestle and Haleeb. There might even be switchers and shifting loyal in the milk sectors that are
either price sensitive or want variety. As a result, the marketers need to find ways to make the
hard core loyal attracted to the Olper’s brand and shifting loyal and switchers to convert into
hard core loyal as well.
Positioning the brand
Positioning involves designing the product and image that will occupy a distinctive place
in the minds of the target market. As can be seen, nestle milk pak and Haleeb have the largest
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18. profit margins and market share in the milk industry. Thus the marketers at Olper’s
have decided to create its own unique image and then strengthen the position in
the customers’ minds. They have done this by taking a number of following steps:
1. Packaging of Olper’s milk and Olwell in red color and Olper’s cream packed in purple color
are quite different and distinctive from the typical green and blue packing used by other
competitors.
2. The brand has been positioned as an all purpose milk that is meant for everyone, especially
for those who live life to the fullest, hence its tag line, “jo dil khol kay jeetay hain unheen kay
liyay hai Olper’s”.
Engro food’s always tries to create customer intimacy that is it focuses on satisfying the
customers’ unmet needs. Processed milk is seen as less lacking all the nutrition’s that is part of
milk due to passing through so many processes. But Engro food’s positions itself as milk that
has not lost its nutrients. The unique selling proposition for Engro food’s is Subah Bakhair
Zindagi , but recently the company changed the USP to: Jo dil khol kay jeetay hain unheen kay
liyay hai Olper’s. Both the tag lines have a very positive impact on Olper’s image because of the
emotions involved in both the lines. The marketers have used different positioning for Olper’s
products:
o They have used the attribute positioning for Olper’s milk. The main theme of the
product is that it is meant for all purposes without any user imagery. Olper’s ads also
show attributes of milk such as good for health.
o They used the benefit positioning for Olwell. The product is positioned as delivering the
benefit of helping to reduce weight and for healthy bones.
o Olper’s cream is positioned as good for a specific use or application. In this case the
cream can be used to make cake icings and desserts look great.
It can be said that all the different stages have been performed by the marketers with extreme
care and research.
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19. Salient Features USP's of SBU
Marketing mix includes
Product Price
Place Promotion
 Product
 Price
 Place
 Promotion
Product
Product Variety: A wide range of dairy ice creams and frozen desserts
Quality: Premium ice cream rich in calcium which is fresh every time
Design: Includes ice pop, choc bar, dairy ice cream and pop sickle.
Features: Made from fresh milk and cream and high in nutrition
Product Name: Frooze ice pops, Olper Milk, Olwell, Omng Lussi, Dairy Omng,
Olfrute, Nutty/ Caramel Cones, Strawberry/Mango/Vanilla Affair, Kulfi, Lick a Flavor,
Frooze Cups.
Packaging: High quality and eye catching packaging. Packaging color ranges
from red, blue, yellow, orange and green. Packaging is colorful in order to attract
children.
Sizes: Sizes include 1ltr and half liter for dairy Milk. Choc bars & soft
serve ice cream are of different sizes.
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20. Service: Satisfying the dessert needs of the population in the
best possible manner and delivering quality every time to the consumer
Warranty: None what so ever.
Returns: Only in the case when product is expired.
Price
List Price: Price varies for different ice creams. Depending upon
Cups Rs 20
Soft serve ice cream Rs 10-50
1Ltr ice cream Tub Rs 150
2ltr ice cream Tub Rs 275
Cones Rs 30
Ice Pop: Rs 10
Olper per Ltr Rs105
Trang Tea Whitener(200m.l) R.s18
Olwell Cream 200 m.l R.s80
The price of its competitor (Walls) is more or less the same and price of liter ice creams
is less than Walls which is a great strategy
Omore offers a 16% margin to retail traders and shop keepers which are slightly lower
than Walls, who offer a margin of 20% to shop keepers. They are new in the market and
do not have the same relationship with retailers as Walls.
Place:
Channels: Sells directly to the end user through retailers and shopkeepers. This is
the trend in Pakistan followed by many FMCGs.
Coverage: Engro Products for the time being is only available in limited areas on
Punjab and available throughout Pakistan. The company started off its operation in
Punjab because it has the largest province population wise.
Transport: Engro products are transported to retailers and shop keepers through
private transportation firms e.g. Abu Dawood Logistics and also through a few trucks
owned by the company. This is done in order to remove transportation and vehicle costs
Locations: Available at large/medium sized and small bakeries, grocery stores and
pharmacies in Pakitan - Sell their products directly to consumers using cycles and their
own personnel. This strategy has been in practice for many years and is being used by
Walls and Hico too.
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21. Promotion:
Advertising: Vehicle Advertising, Outdoor billboards, Point of Sale Displays and
Ads on televisions. Advertisements are mostly colorful reminiscent to their ice cream
packaging. When Engro foods was initially launched they adopted a rather unique way
of advertising. Flyers were thrown in different housing communities using airplanes.
Message: Linked Engro foods with joy and happiness so their tagline/slogan
is Art of Happiness´. Linked with consumers and got reviews of different products using
various mediums social communities e.g. Facebook and Orkut linked their ice cream
with other brand names like Olpers and Olwell. This promoted their other brands as well
which are also relatively new in the market.
SWOT Analysis
Strenghts Weaknesses
Opportunities Threats
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22. Strengths
 Personal relations with farmers ENGRO has been interacting with the farmers for
fertilizers and has gained quite a good reputation over the years. It has led to a strong
bond and long term relationship with the farmers who are willing to supply milk to the
company. This is an added advantage and strength for the company because it will
never be short of milk production. The farmers also won’t have to look elsewhere to sell
their milk.
 Positive response from customers in first year, EFL crossed 1.4 billion sales figure which
shows customers’ satisfaction upon EFL’s products.
 Its taste, quality proposition and world-class quality proposition system.
 Third-Generation Plant EFL only, has the third-generation UHT milk plant in the country.
EFL plant is the only plant in Pakistan that uses Bactofuge technology to virtually
eliminate bacteria and ensure premium quality and hygiene. Moreover, it is also setting
up another milk processing plant in Central Punjab (Sahiwal) with an investment of Rs. 2
billion (US $ 33million).
Weaknesses
 Olwell TVC 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.
 Owning Red Color The Company has not owned the color red like Nestle has a green
Milkpak; Haleeb has a blue carton etc.
 Low Quality Milk EFL is not having its own dairy farms; it largely collects loose milk
from farmers & galas through its 40 milk collection centers.
 Packaging EFL is dependent upon Tetra Pak for the packaging of its entire dairy
products. Tetra Pakis the only option available to Olper’s for packaging because it is
having monopoly in the packaging sector in Pakistan.
 Milk collection & distribution costs EFL’s34 out of 40 milk-collection centers are
located in Punjab, whereas its only milk processing facility is situated near Sukkhur
(Sindh).
 Narrow brand portfolio It has been more than a year now, when EFL launched its
first dairy product, Olper’s Milk on March20, 2006. But 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.
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23. Opportunities
 Increased funding by Government Government has decided to increase farmers’
funding. This is an opportunity for ENGRO foods because previously due to weather
conditions and other reasons there was lots of wastage of milk but now that can be
reduced as farmers will be better able to store milk for longer time periods.
 Increased consumption of PLM Competition may create opportunities for the
company because each competitor in the milk industry wants to increase
penetration of processed liquid milk and so they will create awareness for
consumers through different advertising media.
 Awareness Growing dissatisfaction with loose milk and increasing awareness about
health and hygiene issues have led to increased processed milk consumption.
 Third largest producer of milk Pakistan is the Third largest producer of milk in the
world with a total production of 32billion 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 10.8percent of the GDP.
Threats
 Competition may pose a threat because the company will have to maintain its
leadership in an expanding market so that it doesn’t lose its market share to its
competitors. For Olper’s it might be difficult to penetrate in a market where the
loyalties exist for such brands as Nestle and Haleeb.
 Perceptions and Price Differentials Consumers’ perceptions and price differentials
can cause a threat for the company. It is important that Olper’s comes up to the
expectations of the customers and fulfills its conformance quality that is the
company meets its promised specifications. Consumer’s preferences change with
time and prices might create certain barriers inters of the profit margins for Olper’s.
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24. Market share of Engro Foods:
Sales
Nestle
Engro
Halleb
Uniliver
Nestle 35%
Engro 27%
Halleb 17%
Uniliver 21%
Profit of varies SBU’s of ENGRO Foods
Division Revenues Profit Percent Market Growth Rate
(million Pkr) (million Pkr) Value Persenge
Olper’s 4500 2000 60 +4
Olfrute 2550 1500 25 +2
Tarang 3200 1305 35 +8
Omore 759 200 12 +5
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25. Dairy Omang 654 178 10 +1
COMPETITIVE PROFILE MATRIX (CPM):
Critical Success Factors Weight
Rating Score Rating Score Rating Score
Research & Development 0.08 3 0.24 3 0.24 4 0.322
Financial Position 0.09 3 0.27 3 0.27 3 0.274
MarketShare 0.07 2 0.14 4 0.28 3 0.215
ProductQuality 0.08 3 0.24 3 0.24 3 0.246
PriceCompetitiveness 0.11 3 0.33 3 0.24 2 0.227
Management 0.10 3 0.30 4 0.40 3 0.308
Glo balEx pansion 0.08 3 0.24 4 0.32 3 0.249
Customer service 0.06 3 0.18 3 0.18 2 0.1210
Sales & Distribution Network 0.09 3 0.27 4 0.36 3 0.2711
ProductionCapacity 0.07 2 0.14 3 0.21 4 0.2812
Alliances 0.08 3 0.24 4 0.32 3 0.24
Total 1.0 2.76 3.51 2.98
Strategy adopted for Market growth
Engro Foods are using different strategies at the same time to gain market share and to create
sound image of the products and company in the minds of the customers.
The company adopting flowing strategies.
Market Penetration (Olper and Omore)
Product Development (Omang Lassi and Olfrute)
Market Development ( Targeting almost all regions in Pakistan)
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26. Boston Consultant Matrix Model
BCG model relates to marketing. The BCG model is a well-known portfolio management
tool used in order to analyze and position the product by keeping in view the market share as
well as the market growth rate of the product. BCG matrix is often used to prioritize which
products within company product mix get more funding and attention. The BCG model is based
on classification of products (and implicitly also company business units) into four categories
based on combinations of market growth and market share relative to the largest competitor.
In order to elaborate the BCG matrix, I have chose Engro foods limited. Though Engro has a
number of other business in which it involve but in this report I have focused only in one
business unit of Engro which is Engro foods limited. Engro foods have launched six major
brands since 2004, year of establishment of Engro foods. In these six major brands five are dairy
products. In year 2010, Engro has launched olfrute which is a fresh juice product by this
particular company. In this report, I have categorized all the six major brands of Engro foods in
to four categories of BCG matrix. The decision of this categorization has been made on the basis
of two major things that are market share and the growth in the market.
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27. Stars
In the BCG matrix, I have placed two products in the star categories that are Omore and
Tarang as the growth rate of these two products are quite high as you can see in the table-
1.Beside this the market share is also increasing. As both of the products are relatively new in
the market as compared to its competitors and the market share is not so well but still in this
shortage period this growth rate and the market share is incredible. There is a lot of potential in
both of these products and company can increase its market share by massively investing in
these two products. Investing Strategy must be used in order to constant the growth, the
company must constantly invest in order to grow the current level of market share.
Growth Rate +5% (Olper), +8% (Trang)
Ice Cram Market Share Tea Whitener Market Share
Omore 38% Trang 51%
Walls 45% Every Day 27%
Yummy 17% Tea Max 22%
Cash Cows
Olper is one of the well renowned brands by Engro foods and this has lead to a drastic
change in the diary industry of Pakistan. Before olper, haleeb and milk pack had the monopoly
in the tetra pack diary industry but after the olper success a lot of other brands like good milk,
nurpur etc got enter into the market. Now the market of the olper has a relatively high market
share and the third largest milk producer in Pakistan. Olper milk and cream come under the
same umbrella of brand nameolper. Harvesting Strategy should use and Engro should milk its
cow for the Omore and Tarang in order to increase their current market share.
Growth Rate +4
Milk Market Share Cream Market Share
Opler 21% Olper Cream 28%
Milk Pak 45% Nestle Cream 52%
Haleeb 34% Haleeb Cream 20%
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28. Question Marks
At the end of year 2010, Engro food has launched its first juice brand name Olfrute.
Olfrute has relatively low market share but the growth potential is quite high. Olfrute is facing a
tough competitor with a strong brand name of Nestle. The initial promotion and the sales
figures depict that it can be a successful product but still the results of this brand has yet to
come. In this particular period Engro food has also launched flavored milk with brand name
owsum. Though the experiences of haleeb in the case of candia was bitter, now just see what
Engro will do in order to make this brand a success.
Growth Rate +2
Juices Market Share
Nestle 49%
Olfrute 13%
Country 25%
Halleb 13%
Dog
Engro has lauched a brand with the name Olwell with high calcium and low fat. This has
get a great failure and the market share of Olwell as compared to nesvita is quite low beside
this its sales are started decreasing as compared to the previous year figures. Divesting Strategy
can be used as from the past two years the market share has been started losing and also the
there is slow market growth for this product.
Growth Rate +1
Milk Market Share
Dairy Omang 10%
Milk Pak 45%
Dairy Queen 38%
Halla 7%
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29. MAJOR COMPETITORS:
Engro Foods Limited is fully aware of its competitors. The company had to consider the
areas including (product design, segmentation, target market, advertising, time to launch a new
product, time for necessary changes & constant over view). The major competitors in case of
offering the UHT milk are
o Nestle
o HFL
o Millac
o Halla
o Prime
o Nurpur
o Nirala
o Dairy Crest
Other than the brand mentioned above Olper’s also faces an indirect competition fromthe
local milkman the GAWALA.
INTERVIEW QUESTIONS DUEING OUR VISIT TO MANAGEMNT OF ENGRO FOODS.
Question No. 1 In last 2 years how many products your organization has launched?
Answer: Lasttwo years alfruit, owsum, omore, tarang and some other products
are lunched.
Question No.2 What are the number of products you launched since your entrance in
market?
Answer: Olpers (cream and milk ) tarang (liquid, cream and powder)owsum alfruit,
tarqa aslighee, omore,alwell (for diet),different kinds of clorious product(milk) are major
products launched by us.
Question No. 3 What is your core competitive advantage over your competitor?
Answer: Aggressive style of business launching more products in short time.
Question No. 4 What is the % discount rates you give to your supplier, retailer and
wholesaler?
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30. Answer: The discount rate for retailer and wholesaler is according to
market. And if target achieved extra benefit will be given to them.
Question No. 5 What is the core strategy behind the advertising of your products?
Answer: To target the audience e.g Owsum for children, Olpers for all purpose,
Tarang for Sweetlovers like Punjabi’s.
Question No. 6 How vast are your distribution channels in Pakistan?
Answer: Over 500 + distribution channels covering all over Pakistan.
Question No. 7 Does you have your own transportation to take product to outlets or
you outsourced the transportation system?
Answer: Not exactly but we are using outsourced transportation for to carry our
products.
Question No. 8 What are your different marketing strategies for the promotion of
product?
o Targeting audience
o Nominal price
o Good discount to distributor when they achieve the target
Question No. 9 How you make profitable relationship with customer?
Answer: We visit city school and Beconhouse for profitable relationship programs
of Olpers and Tarang house full programs are organized all over Pakistan to attract the house
wife to use our product
Question No. 10 What are your target markets?
Answer: Pakistan, Afghanistan and Oman (and for all ages) Teenagers, children
and old persons as well.
Question No. 11 Are there any customer relation centres for complaints?
Answer: No customer complaint centre but we have taken feedback through
distributors. Retailers and local shopkeepers and then try to solve them and make product as
good as possible.
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31. CONCLUSIONS:
ENGRO FOODS LIMITED is the subsidiary of ENGRO group. Their brands are one of the top
brands in Pakistan in the milk sector. Their products OLPERSMILK ,OLPERS CREAM,AWSUM
FRUIT MILK ,TARANG TEA and OMORE ICE CREAM purchased heavily by customers. This is due
to marketing Strategies, Promotion, price and quality of their products. Above mentioned are
the Marketing Strategies of their products due to which there Revenues increases day by day.
They provide the customers what they want; their distribution channels are vast and their
prices are nominal. These are Reasons for the success of their brands.
References:
Area Sales Manager
ZAREEF AGHA
http://www.engrofoods.com
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