2011

Olper s Milk Case Study

Muhammad Ateeq Khan Assistant Brand Manager - Olper s Milk EFoods Limited

You have just joined EFoods as Assistant Brand Manager Olpers Milk after doing MBA from a well reputed Business University. The Olpers brand team is currently working on Brand Plans for the coming year and has setup a strategic meeting which you are to lead. This is your time to shine as the meeting will be attended by your creative agency as well as the Brand Manager, GM Dairy and VP Marketing. The single most critical objective of the meeting is to decide how to create differentiation for Olper's Milk within All Purpose milk category? You will have to go through the complete background of the brand and come up with a logical solution to present your case to the forum. This is the time to prove your worth.

Here are the facts

Birth of an icon Olpers Milk is the Flagship brand of Efoods and was launched in Mar 2006. This was the first brand of Efoods which launched it into the food business. Being a dairy brand Olpers was all set to challenge the giants of the indsutry. Haleeb and Milkpak.The brand grew exponentially displacing Haleeb and taking the th no.2 position in just 4 year of its launch.The brand is now eagerly targeting Milkpak to become the largest All-Purpose UHT Milk in Pakistan

Role of Olpers Milk in EFL Portfolio Being the flagship brand of the company Olpers has played an important role of providing a platform for launch of many value added brands across categories.

O mo re

OL WE LL

Olper s Cream

Ow su m

Olfr ute

Omore, Olwell, Olpers Cream, Owsum and Olfrute are all launched with endorsements from Olpers Milk to have credibility.

Olpers has also helped provided the company with the volume, both for setting up a large milk collection system and also for setting up a national sales network.

Milk Industry The Milk Industry can be sub-divided into two segments; Processed Milk and Unprocessed Milk. The unprocessed milk is primarily loose milk sold in milk shops and door to door Gawala system and constitutes around 80% of the Milk Industry. Processed Milk is sub-divided into Chilled Dairy, Ambient Dairy and Powder. The ambient dairy segment is also known as the UHT segment as it is available in Tetra Packaging and is processed through Ultra Heat Treatment, Homogenization and Standardization. The Ambient Dairy or UHT Segment can be further divided into All-Purpose Milk, HCLF, Tea Creamers, Flavored Milk and Liquid Creams. Some of the major Brands in the category are mentioned below.

Segment All-Purpose Tea Creamers HCLF Flavored Milk Liquid Creams

Major Brands Olper s Milk, Milkpak, Haleeb Tarang, Everyday , Tea Max Nesvita, Olwell Owsum, Pakola Flav Milk, Nesquick Milkpak Cream , Olper s Cream

Table i: Major Brands in UHT

All Purpose Industry

All Purpose Industry

120 100 100 80 60 45 40 25 20 5 0 2006 2007 2008 2009 2010 10 10 10 10 22 20 40 70 7575 75 60 60 80 70 85 Olper's Milk Haleeb Milkpak Others

Source: Fictitious data, for illustration purposes only

Olper s grew exponentially since launch and displaced Haleeb the market leader which then enjoyed a lion s share of 54% market share. Milkpak grew slowly but steadily taking share from Haleeb.

Brands Olper s Milk Milkpak Haleeb Others

Volume 5 70 100 10

Market Share 3% 38% 54% 5%

Table ii: All Purpose Market Share (2006) Source: Fictitious data, for illustration purposes only

This created a direct competition between Olpers and Milkpak as the two leading brands of the segment. Brands Olper s Milk Milkpak Haleeb Others Volume 70 85 22 20 Market Share 36% 43% 11% 10%

Table iii: All Purpose Market Share (2010)

Source: Fictitious data, for illustration purposes only

This was further fueled by the fact that due to inflationary pressures the Industry became stagnant and grew with a CAGR of just 1%.

Marketing Mix The 4Ps of marketing in this category leave little room for creating differentiate from one another. The basic commodity is Packaged Milk or Ultra Heat Treated (UHT) and Homogenized Milk. However in 2009 Milkpak, as part of the global Nestle strategy, introduced Iron fortification in the milk. Although this was not well received by the consumers initially who want their milk to be natural, have started to accept this as part of the package. The price of Olpers Milk and Milkpak are same with Haleeb offering a continuous consumer discount to build volume. The Sku Mix is also the same except for the 1500ml economy pack by Olpers Milk. All Brands are also nationally present with different geographical strengths due to sales volume.

Table iv: All Purpose Brands Marketing Mix (Jan 10)

This leaves the fourth and most important element of the marketing mix i.e. Promotion to be exploited to create differentiation. Over the years the two brands have launched a mix of functional, thematic and sensory communications to differentiate themselves. The messages of the brand have also changed from time to time in the bid to have clear differentiation for what they stand for. Olpers Milk has also used the holy month of Ramadan as a medium to break clutter and differentiate itself by launching heavy thematic / functional campaigns in the holy month.

Olper s Milk Communications

20 06 20 07 20 08 20 09 20 10 20 11
Launch

Optimism

Distribution Strength / Excellence at Source Complete Milk

Complete Milk

Celebrate the Tastes of Life

Table v: Olper s Milk communications over the years (See attached commercials for detail)

Milkpak Communications
20 06 20 09 20 10 20 11
Strength

Iron Launch / Bharosa

Bharosa

Health / Strength

Table vi: Milkpak communications over the years (See attached commercials for detail)

Milkpak has also recently shifted to a higher quality packaging with Photo printing to match its competitor
Olpers which has this quality since launch. However both source their packaging from Tetrapak and hence have the same quality of packaging.

New Thematic Pack

Table viii: Milkpak packaging switch over to Photo processing

Both brands have also launched Limited Edition Packs (LEP) for various occasions. With Olpers Milk th trying to own the month of Ramadan and Milkpak trying to own national days such as 14 Aug.

2006

2007 2008 2009 2010 Ramadan LEP Packs

14 Aug LEP

th

Table ix: Olper s Milk and Milkpak Limited Edition Packs

All Purpose Brands Image Parameters

MILKPAK

OLPERS

8 3 2 3 2 2 3 2 3 2 1

10

Table x: Olper s Milk and Milkpak Limited Edition Packs

Source: Fictitious data, for illustration purposes only

However the fact remains that the consumers still perceive both the brands similar to each other as seen in some of the important image attribute ratings. Both brands have not been able to achieve differentiation as they are strong or weak on the same factors.

The strategy meeting is about to begin. All the attendees including the VP Marketing take their seat. The Brand Manager introduces you to the forum and hands the floor over to you. Everyone is now anxiously waiting for you to start the discussion on how to create differentiation for Olpers Milk within All Purpose Category.