BUSINESS POLICIES AND STRATEGIES MILK

OLPERS

INTRODUCTION
Engro chemical Ltd. is a blue chip organization in Pakistan, estalished in 1964. Now Engro group has launched his milk division in Pakistan in 2005 known as Engro Food Limited. Engro collects pure milk from all over Pakistan & after Packing this fresh milk into tetra packages provides it to all over Pakistan. The main product of Engro Food Limited is Olpers milk. 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. 1.3 billion which provides direct employment to 750 people Olpers introduced a true paradigm, bringing the dairy brand to the fore. The name itself made it sound like a foreign brand, giving perception of quality, and was unlike anything previously experienced by Pakistani consumers. They tried the consumers to consider Olpers as a contemporary and modern brand, and all of their communication and brand attributes were geared toward ensuring it. The brand also worked to ensure it established an image of being a healthy and natural product. Its optimistic and vibrant tag lineGood Morning Lifealong with the unique red color, became the soul of the Olpers brand identity across various media outlets. Olpers is highlighted and expanded upon the various occasions in which milk could, and should, be enjoyed and kept driving home that message through its various promotions. Olpers became the "All Purpose Milk" and could be consumed with breakfast or blended with tea (arguably the most popular beverage for the masses in Pakistan), and appreciated by all members of the family. Firstly we would thank Allah for giving us the opportunity and the resources to be able to do something productive with our lives.

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INTERNAL ENVIRONMENTAL ANALYSIS

Customer focus The company is committed to strict quality standards in all its operations from the collection of milk to the provision of hygienically processed nutritious products to its customers. The company follows the philosophy of "delighting the customers" by providing them quality products at the right price on their door step. Olpers treats them as partners. Keep channel of communication open with them because they are the only reliable source that can provide them best feedback about the product. They invigorate and delight their customers to become more health conscious. Human Resource Management The workforce of Olpers is very efficient and innovative and they are team oriented. The job descriptions of the working teams are quite flexible and get enough scope to show their personal and collective skills and efficiencies. Engros is labor and human resource is at the top among all the workforces of Pakistan. This is because of their efficient HR practices, the most remarkable of which are the recruitment, hiring, job placement and performance appraisal. The performasnce appraisal sestem of Engro has been declared to be the best in Pakistan. Distribution Network Engro Foods Limited has its own distribution network which is no doubt developing very fast. It aims at fulfilling the companys intention to become a big player in the industry, both on a ational and international level. Its

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performance has been ambitious and currently Olpers is available in 80 cities across Pakistan ENGRO has divided Pakistan into five regions for milk distribution namely: Karachi, Lahore, Islamabad, Peshawar and Multan. One problem with this is that their major suppliers are located in Punjab only.

EXTERNAL ENVIRONMENTAL ANALYSIS

Competitive Analysis The organization keeps a bull eye on the activities of competitors and tries to off set all the possible threats, which they can encounter in the future. Olpers continuously measure and monitor the market trends and competitor moves. They are getting feed back from their sales teams and dealers about what is happening in the market. Advertising agencies are also giving them feedback regarding the market and competitors. They are guiding Olpers what should be the next move. The main competitor of Olpers is Nestls milkpak and Haleeb. Nestle milkpack has not only increased local sales substantially but has also been very successful in its export sales which have increased many times over since it first explored neighboring markets. There are some minor competitors as well which are dominant in their local cities due to the convenience factor like Candia, Dairy Queen, Gourmet Milk etc. Political Factors Analysis There are no specific government rules and regulation that can creat problem for olpers but because of unstable political conditions there is an uncertainty of conducting operations, collecting and supplying milk from and across the country. Economic Factors Analysis Inflation rate of Pakistan for the current fiscal year has grown to 7.9 percent. This thing is really hurting the purchasing power of Pakistani consumers.
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Packaged milk industry is already considered as more costly compared to open milk so it is becoming out of reach of general public. As a result, there is an increased pressure on Olpers to either decrease their prices or at least keep prices stable. Social Factors Analysis In Pakistan the norm is to get up in the morning and get the fresh milk (straight from the cow) from the milkman. It is a general perception that only loose milk is fresh and free from preservatives and thus healthy. For substantial penetration of the market, packaged milk providers have to overcome all such perceptions and generate awareness about the safety and healthiness of packaged milk. This will however require a lot of time and patience because most of the people are not willing to spend additional amount of money on packaged milk when they are convinced that it has a lot of preservatives and is unhealthy. Technological Factors Analysis Milk yields per animal have been increased through scientific feeding & breeding which is really benifitting the local dairy farmers. Currently, most equipment for storage and processing is being imported from Western countries. Olpers has also started fixing such new plants and applying such innovative techniques in their farms. They have also started making their own farms.

SWOT ANALYSIS
STRENGTHS Engro at Olpers Back Olpers is a brand of Engro group which is a blue-chip company of Pakistan with a strong financial and organizational position and image so it can easily

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use the resources of Engro. It can use its distribution line and its research and development department for its own sake. Personal Relations with farmers Engro has a strong bond and long term relationship with the farmers who are willing to supply milk to the company. Focus on R&D Olpers has focused a lot on research and development and has got an identity in the dairy industry within a short span of only 3 years. Positive response from customers In first year, Olpers milk crossed 1.4 billion sales figure which shows customers satisfaction upon Engro food products. Its taste, branding and world-class quality proposition system has helped it a lot carving this image in the customers. All purpose milk Olpers is the only packaged which calims itself to be all purpose milk. Strong relations with consumer & product research agencies Olpers has strong bonds with the following agencies except for its own R&D department AC Nielsen Mindshare JWT Asiatic MARS marketing and advertising agencies. Modern Equipments and Plants Olpers has a good hold on equipments like Third-generation UHT milk plant Bacteriofuge technology

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Plant in Central Punjab (Sahiwal) with an investment of Rs. 2 billion (US $ 33 million). WEAKNESSES Brand loyalty of customers towards competitors Consumers are brand loyal toward competitors products like Nestle milkpack and Haleeb, because of which Olpers is still not the best milk selling brand in Pakistan. Over speediness Instead of solidifying their brand, Olpers came out with Olwell, a skimmed variety and now with Tarang as tea whitener. That doesnt enhance the brand as such, they just diversified it. Though Olwell is good enough but not as important as enhancing the brand image. If they were to introduce these products to increase their product line depth they should have used the same brand name i-e Olpers. Olwell TV Commercial Olwells ad which was based on Western life style failed to recognize in Pakistan, where Muslims thought they had ignored the ethics, religious beliefs and cultural values. Not owning red color There is no color association attached to Olpers. Red reminds us of Goodmilk also. Although olpers came up with a new color that was red but they did not own it because very soon they introduced Olpers cream in blue color and Tarang in multicolor package. Milk collection & distribution centers Olpers 34 out of 40 milk-collection centers are located in Punjab and only 1 in Sukkhur (Sindh). It increases in collection & distribution costs. It also increases the chances of milk getting spoiled because of increased travelling time.
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Narrow brand portfolio Olpers brand portfolio still consists of just Olpers Milk, Olwell Milk, Olpers Cream and Tarang tea whitener. They should have gone for more food items. No focus on customer feedback Olpers does neither own a website nor does it has an e-mail address for getting a quick feedback from its consumers. OPPORTUNITIES Flavored milk Olpers can introduce flavored milk in order to capture the attention of kids and taste conscious milk consumers. Hygienic trend in the society Growing dissatisfaction with loose milk and increasing awareness about health and hygiene issues have led to increased processed milk consumption. People are switching from unhygienic to hygienic milk so this is a high time for Olpers to promote itself more in the market. Increased funding by Government Government has decided to increase farmers fundings so it can go for more milk collection from the farmers in order to increase its supply in the market. Market development On average a Pakistani spends about 42% of his income on food so there is a potential for Olpers to go for other food products as well. Olpers should go for more market penetration and market development in Pakistan. THREATS No entry barriers There are no entry barriers in the dairy industry of Pakistan so the local and international brands can easily compete with it. Perceptions and Price Differentials

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Consumers perceptions and price differentials can cause a threat for the company. It is important that Olpers comes up to the expectations of the customers For example, lose milk is still cheaper than packaged milk and that is also one factor that people still prefer to buy lose milk. Political Conditions of Pakistan Political conditions of Pakistan are very uncertain and this may cause serious problems for Olpers. More shelf life of competitors Olpers has a shelf life of three months while Nestle recently has claimed that its shelflife is four and a half months. Other brands can also bring about such a technology which can enhance it.

VALUE CHAIN ANALYSIS

Departments In Engro foods they have maintained the following departments: 1.Administration 2. Finance and Accounts 3. Human Resource 4. Marketing 5. Milk Procurement 6. MIS 7. Production 8. Quality Assurance 9. Supply and Distribution PRIMARY ACTIVITIES The following are main levels of primary activities which assist Olpers maintain a good quality standard of milk and their services as well. Inbound Logistics

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Milk is collected from villages, forms and other local milk men. This milk is sent to plant through own tankers. Some suppliers also collect milk and sent it to plant by their own means. This milk is first tested in reception lab after weighing. When the tankers enter into the olpers Premises, a token is given to him, which contains the following things: Name of the supplier/Area Number of the tanker Quality assurance clearance no. Operations Olpers carries out its operations very carefully in order to maintain its Freshness Adulteration Bacterial content Production is the functional area responsible for turning input into outputs through a series of production processes, and the production manager is responsible for making sure that raw material are provided and made into finished goods effectively. The production manager makes sure that work is carried out smoothly, and must supervise procedures for making work more efficient and more enjoyable. The production department performs many functions like shift in-charge, after taking his control they review the on-going production, how much it is done and how much is needed in order to meet the order. So they keep the process till the orders get completed. They continuously communicate with the employees handling machinery and other packaging equipment along with the quality assurance. Outbound Logistics Warehouses of Olpers are under the supply chain department. Olpers has 400 distributors all over Pakistan. All the products after packing are
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OLPERS

transferred to the warehouse from where they are loaded on the vehicles and transported to these distributors after generating the Daily stock report Release report Order sheet Loading slip Dispatch report Production Department Marketing and Sales Olpers positioned the brand by selling proposition for olpers is: jo dil khol kay jeetay hain unheen k lye ha olpers. Olpers has its billboards on all the important places of big cities. It has shown many famous celebrities in its TV ads to capture more attention of the consumers. Olpers targets all types of consumers promoting it as All purpose milk TV commercials of Olpers are full of life and energy. They also show synergic relation with the religion, culture and family. Olpers has 64 sales teams all over Pakistan Olpers went with red as its color it created a whole new perceptual niche for Olpers. The color also helped to enhance the in-store visibility and presence for Olpers packaged milk. Services Olpers offers special discounts to retail outlets Olpers guarantee three months freshness and readily changes the batch which is not found to be up to the mark. Olpers also assures of exchanging the expired lots with some of its specific retailers.
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SUPPORT ACTIVITIES The following support activities are an important part of the value chain of Olpers. General Administration The top management at Olpers is committed in their works and they know the importance of coordination and interaction of different departments in order to achieve better results. Weekly meetings are held between different departments in order to solve problems as well as to make accurate decisions so that resources are not desecrated. Human Resource Management The workforce of Olpers is very efficient and innovative and they are team oriented. The job descriptions of the working teams are quite flexible and get enough scope to show their personal and collective skills and efficiencies. Engros is labor and human resource is at the top among all the workforces of Pakistan. This is because of their efficient HR practices, the most remarkable of which are the recruitment, hiring, job placement and performance appraisal. The performance appraisal system of Engro has been declared to be the best in Pakistan. The employees are working properly according to company policy and if the employee needs any leave due to some reason they have to manage other person should be present there in the absence of that particular person, and the production run smoothly and effectively.

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Technology development Olpers makes sure that the technology used is always up-to-date. They have a team consisting of continuously developing new ideas and implementing them into the operations. They have very heavy machinery and unique plants which are used for Pasteurizing, purifying and preserving the milk. The tankers used for transfer of milk from one place to another are also well protected against heat, light and bacteria. Olpers mostly uses imported plants and equipments which they bring in the name of Engro chemicals and foods. The laboratories of Opers are well equipped with all the physical and chemical tests for assuring the milk quality. The research and development department of Olpers is very efficient and has always an eye on the emerging market opportunities. Procurement Milk is collected from the agricultural or the dairy farmers. Olpers has a strict and stringent quality policy regarding intake of raw milk. At every reception house quality tests are conducted to ensure that only fresh milk of the highest quality is accepted at the plant premises. recognized tests are used to check for milks Adulteration, Microbiological contamination Adequacy of nutritional contents. The following tests are performed in the reception lab: Tests for detecting Taste Smell Color Temperature Clots on boiling
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The internationally

BUSINESS POLICIES AND STRATEGIES MILK

OLPERS

PH test Fat test Iodine value Engro has built good relations with its suppliers and its technological equipment providers. It gets most of its parts and machinery from abroad.

STRATEGIC RECOMMENDATIONDS
BRANDING STRATEGY Olpers should position its brand very firmly in the market and then it should go for other differentiated brands. It should provide low fats, high calcium content milk under the same brand name i-e Olpers because brand name gives a unique identification in the market place, Using Olpers name gives positive associations to customers that this product is used by us and we have a trust on this name so using this product also enhance the product image, corporate brand identity and customer loyalty as well. MARKET PENETRATION STRATEGY Olpers should look for more market penetration by increasing its distribution network and reaching the far away market places. GLOBALIZATION STRATEGY There is a potential in the dairy industry not only in Pakistan but also in the neighboring countries, so Olpers should move into that as well. However it will first have to improve its distribution network. INVESTMENT IN R&D Olpers should invest more amount on research and development because without an efficient R&D it may not know what and where to serve and in what way. PROMOTIONAL STRATEGY Olpers should spend more on its advertising and marketing. It should give on more sensational reminders of what the customers actually perceive from
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Olpers. It will help Olpers to carve out not only its premium image but also the brand association with Olpers in the minds of the customers.

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