Project Submitted to:

Sir Waqar Qadri

Presented by:

Mashal Ilyas (A1BM-310001)

Mir Muneeb (A1BM-310012)
Zohaib Uddin (A1BM-310020)

16
 Table of Contents

Acknowledgement………………………………………………………………………………3

Company Profile and History………………………………………………………………….4

Corporate Structure of Engro Corporation…………………………………………………..5

Engro Foods Limeted…………………………………………………………………………..6

Engro Foods Brands……………………………………………………………………………7

Milking the Market……………………………………………………………………………..8

Mission and Vision Statement………………………………………………………………….9

 Mission Statement………………………………………………………………9
 Proposed Mission Statement…………………………………………………....9
 Vision Statement………………………………………………………………...9
 Proposed Vision Statement……………………………………………………..9

SWOT Analysis…………………………………………………………………………………10

 External Factor Evaluation……………………………………………………10

 Opportunities…………………………………………………...10
 Threats…………………………………………………………..11
 Internal Factor Evalutation……………………………………………………11
 Strength………………………………………………………….11
 Weaknesses……………………………………………………...12

Overt Marketing Activities…………………………………………………………………….13

 Product…………………………………………………………………………..13
 Price……………………………………………………………………………..14
 Place……………………………………………………………………………..14
 Promotion……………………………………………………………………….15

16
 Acknowledgement

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. Waqar Qadri, whose teachings helped us throughout this project.
His guidelines have been very useful for us in completion of this project. He helped us find new
ways of being innovative and creative as he always use to in his classes. This project wouldn’t
have been possible without his participative and friendly way of teaching.

We would also like to thank Mr. Asad Umer, Ex-CEO Engro Corp. 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.

Company Profile and History

16
Engro Corporation Limited is one of the largest industrial corporations in Pakistan operating in
various sectors including Fertilizer, Foods, Energy, Chemicals and Business Automation
Solutions. It is a public limited company and is listed on the Karachi Stock Exchange (KSE). It
started operations in1957 as an Esso/Mobil joint venture which discovered the Mari Gas field
near Daharki. The construction of a urea plant commenced at Daharki in 1966 and production
began in 1968. At US $43 million with an annual production capacity of 173,000 tons, it was the
single largest foreign investment by a multinational corporation in Pakistan at the time.

A full-fledged marketing organization was established which undertook agronomic programs to

educate the farmers of Pakistan. As the nation’s first fertilizer brand, Engro (then Esso) helped
modernize traditional farming practices to boost farm yields, directly impacting the quality of life
not only for farmers and their families, but for the nation at large. As a result of these efforts,
consumption of fertilizers increased in Pakistan, paving the way for the Company’s branded urea
called “Engro”, an acronym for “Energy for Growth”.

As the nation’s first fertilizer brand, Engro (then Esso) helped modernize
traditional farming practices. I n 1 9 7 1 , E s s o P a k i s t a n F e r t i l i z e r C o m p a n y
L i m i t e d b e c a m e E x x o n Chemical Pakistan Limited and then later Engro Chemical
Pakistan Limited as a result of the most successful employee buy-out in Pakistan’s corporate
history. Renamed as Engro Chemical Pakistan Limited, the Company has gone from strength to
strength, reflected in its consistent financial performance, growth of the core fertilizer business,
and diversification into other businesses. On January 1st, 2010, after a demerger of the
fertilizer business, Engro Chemical Pakistan Limited was renamed Engro Corporation
Limited and established as a holding company. The principal activity of the Holding Company is
to manage investments in subsidiary companies and joint ventures.
AGEMENT

CORPORATE STRUCTURE OF ENGRO CORPORATION

16
Engro Foods Limited (EFL)

16
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.

With an acquisition of Al Safa – a fast growing and established Halal meat brand – Engro Foods
is now venturing into North American market starting from Halal Foods category. The new
organization, Engro Foods Canada Ltd. with a subsidiary Engro Foods USA, intends to
aggressively grow the business in this market.

With the vision of Elevating Consumer Delight Worldwide, Company’s signifcant focus will be
towards the global operations in the years to come.

Engro Foods strategy from the very beginning was to make heavy investments in the
infrastructure development and brand building in the initial years. At present, the
Company h a s r e a c h e d a p o i n t w h e r e i t h a s b u i l t t h e c r i t i c a l m a s s i n t e r m s
o f i t s i n f r a s t r u c t u r e a n d significant top of mind with consumers. With
established leadership in the Ambient UHT m a r k e t , w e l l d i v e r s i f i e d p r o d u c t
p o r t f o l i o a n d s t r o n g t o p o f m i n d b r a n d a w a r e n e s s , t h e Company is poised to
normalize its marketing investments in line with the industry standards and benefit from the
momentum built in the recent years. The impact of the heavy investments in initial years
resulted in the losses carried in the book. However, going forward the Company plans to
deliver significant improvement in the bottomline trends as it benefits from the investments in
the initial years.

Engro Foods Brands:

16
Milking the Market

Pakistan, according to recent statistics, is the third l a rg e s t m i l k p r o d u c i n g

c o u n t r y i n t h e w o r l d ( 3 2 b i l l i o n l i t e r s p e r y e a r f r o m 5 0 m i l l i o n animals,

16
with urban consumption at nearly seven billion liters). However, despite
this high r a n k i n g , p a c k a g e d m i l k , e v e n a c c o r d i n g t o t h e m o s t o p t i m i s t i c
estimates, has a mere four percent penetration. No wonder then that
p r o c e s s e d m i l k c o m p a n i e s ( P L M C s ) h a v e b e e n 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.
Engro introduced itself in foods only comprising of dairy products. It came with Olper’s, Olper’s
Lite, Olper’s flavored Milk, Olper’s Cream, Tarang, Dairy Omung, Omung Dobala, Omung
Lassi, Tarrka (Desi Ghee). Engro Corp. claims that over 50 million people within whole Pakistan
starts their day with Olper’s. Olper’s also has wiped Milk Pack out from the Market at a big
scale. Tarang is now preserved by families belonging to middle-middle class, and Omung is
preserved by families belonging to middle-lower class. Omore’s have brought newly flavors of
ice-creams which has influence the consumers of Wall’s at large, as a result of which many retail
shops do have the Omore’s products instead of Wall’s. Engro has introduced Omung Dobala
which provides the cheapest fresh cream in packaging so as to targeting the middle class
families.

That’s how what we say Engro is Milking the whole Market.

MISSION AND VISION STATEMENT

Mission Statement

16
Engro is progressing day by day because they have a
v i s i o n a n d m i s s i o n t h a t k e e p s t h e m motivated and keeps them going. Their
mission as they describe as:
“Our mission is twofold, to help farmers maximize their farm production by providing quality
plant nutrients and technical services upon which they depend. To create wealth by building new
businesses based on company and country strengths in petrochemicals, information technology,
infrastructure, food and other agriculture sector.”

Proposed Mission Statement

“We aspire to make Engro the most successful premier food producer in the world. We are
committed to supplying the consumer and our customers with the finest,
h i g h q u a l i t y products; satisfying real life needs with unique ideas, fulfilling a promise to
deliver the best, ensuring the everything we make ,caring for people, communities and the
environment. EFL support these goals with a corporate philosophy of adhering to the highest
ethical conduct in all its business dealings, treatment of its employees and social and environmental policies.”

Vision Statement

“Our vision is to become a fast expanding mega foods company.”

Analysis of Vision Statement

The essence of the vision statement is to explain what the company wants
t o a c h i e v e a n d strive for in the long run. Now for Olpers, they simply explain what they
want to become and what their business is all about. So firstly, what their business is
about; they fall under the foods industry as they produce premier milk. Moreover,
what their striving objective is that they want to expand and capture their milk
market and have the opportunity to expand and grow in other departments in the food
industry.

Proposed Vision Statement

“To be the premier Pakistani enterprise with a global reach, passionately pursuing value creation
for all stakeholders”

SWOT ANALYSIS
External Factor Evaluation (EFE)

Opportunities

16
•Increased Funding by the Government: Government has decided
to increase farmers’ funding. This is an opportunity for ENGRO foods because
previously due to weather c o n d i t i o n s a n d o t h e r r e a s o n s t h e r e w a s l o t s o f
w a s t a g e o f m i l k b u t n o w t h a t c a n b e reduced as farmers will be better able to store
milk for longer time periods.

•Consumption of Processed Liquid Milk is increasing at the rate of 12%:

Competitionm a y c r e a t e o p p o r t u n i t i e s f o r t h e c o m p a n y b e c a u s e e a c h
c o m p e t i t o r i n t h e m i l k industry wants to increase penetration of processed liquid milk
and so they will create awareness for consumers through different advertising media.
This will ensure the increase in the consumption of processed milk instead of lose
milk and so will in turn lead to increase in sales for the company. Therefore there
will be an opportunity for accelerated growth.

•Third Larger Producer of Milk: Pakistan is the Third largest producer of milk in
the world with a total production of 32 billion liter of milk a year, whose value is
more t h a n t h a t o f t h e c o m b i n e d v a l u e o f w h e a t a n d c o t t o n , f r o m a t o t a l
h e r d s i z e o f 5 0 million milk animals (buffaloes and cows).

•More than 39% of un segment market: More than 39% of the Pakistan milk
market is not catered by the PLM industry which includes villages, small towns and
other niche market.

•Awareness: Growing dissatisfaction with loose milk and increasing awareness

about health and hygiene issues have led to increased processed milk consumption.

•Annual Production of Milk is increasing 3 billion liters per year: Livestock

accounts for 46.8 percent of agricultural value added and about 10.8 percent of
the GDP. Milk is the largest commodity from the livestock sector accounting for 51
percent of the total value of the sector. Due to the steps taken by the government
and private sector, country’s annual milk production is expected to grow at an
additional 3 billion liters in the next few years. This is quite an opportunity for
ENGRO foods as there is lot of growth in this part of the sector.

Threats

16
• The Effect of Recession: D u e t o r e c e s s i o n t h e P u r c h a s i n g P o w e r o f
t h e c o n s u m e r s a r e d e c r e a s e d b y 11%.Due to which consumers become price
sensitive which is the biggest challenge PLM market is facing.

• Traditional Guwala system:

D o o d h Wa l a c u l t u r e i s a l s o a b i g g e s t c h a l l e n g e P L M m a r k e t i s f a c i n g . 4 7 %
o f t h e market is covered by the Guwala system.

• Political instability:
There is also very high very of political instability in the country.

• Nestle’s back behind Milk Pack:

Milk Pack can retain its lost customers which are occupied by Olper’s by again investing in
promotional campaigns.

Internal Factor Evaluation (IFE)

Strengths

• Engro’s back:
ENGRO is a well-established brand name in Fertilizere, IT and
infrastructure b u s i n e s s . T h e b r a n d i s w e l l k n o w n , s o customers will
a u t o m a t i c a l l y h a v e a b r a n d a s s o c i a t i o n w i t h E F L a n d s e e i t a s a premium
quality product. ENGRO is world renowned so it can easily attract foreign investors
in backing it against other competitors such as Nestle. ENGRO can easily afford
research and development costs for EFL in order to introduce new products. It can
also distribute the brand through better channels because of its long term relationship
with distributors in the agriculture sector.

• PR with the 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. T h i s
is an added advantage and strength for the company because it will never
c r e a t e shortage of milk production. The farmers also won’t have to look elsewhere
to sell their milk.

• S t ro n g C o n s u m e r a n d p ro d u c t re s e a rc h :
E F L h a s d o n e a s t r o n g c o n s u m e r & p r o d u c t research before and after
launching the product. This has provided them the perfect l a u n c h i n g p a d t o
e v e n t u a l l y e m e r g e a s a g l o b a l p l a y e r i n t h e f o o d i n d u s t r y. To
develop its future portfolios, EFL has hired various global research partners like
AC Nielsen, Mindshare, JWT Asiatic and MARS marketing and advertising agencies.

16
• T h i r d G e n e r a t i o n P l a n t : E F L o n l y, h a s t h e t h i r d - g e n e r a t i o n
U H T m i l k p l a n t i n t h e c o u n t r y. E F L p l a n t i s t h e o n l y p l a n t i n P a k i s t a n t h a t
u s e s B a c t o f u g e t e c h n o l o g y t o virtually eliminate bacteria and ensure premium
quality and hygiene. Moreover, it is a l s o s e t t i n g u p a n o t h e r m i l k p r o c e s s i n g
p l a n t i n C e n t r a l P u n j a b ( S a h i w a l ) w i t h a n investment of Rs. 2 billion (US $ 33
million).

Weaknesses

•Milk Collection and distribution costs: EFL’s 34 out of 40 milk-collection

centers are located in Punjab, whereas its only milk processing facility is situated
near Sukkhur (Sindh). It increases the milk collection & distribution costs; and also
increases the chances of milk getting spoiled because of increased travelling time.

• Narrow Brand Portfolio: It has been more than 6 years now, when EFL launched
its first dairy product, Olpers Milk on March20, 2006. But EFL’s brand portfolio
still consists of just few products.
Whereas its competitors like Nestle and Haleeb Foods have
a m u c h diversified line of dairy products.

• P a c k a g i n g : E F L i s d e p e n d e n t u p o n Te t r a P a k f o r t h e p a c k a g i n g o f i t s
e n t i r e d a i r y products. Tetra Pak is the only option available to Olper’s
for packaging because it is having monopoly in the packaging sector in Pakistan.
Due to this reason, Tetra Pak can charge them higher and it could increase the production
costs.

Overt Marketing Activities

16
  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: Olper’s Milk, Olper’s Lite, Olper’s flavored Milk, Olper’s Cream,
Tarang, Olwell, Omung Lussi, Dairy Omung, Omung Dobala,
Olfrute, Nutty/CaramelCones, Tarrka, Frooze icepops,
Strawberry/Mango/Vanilla Affair, 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 0.5 liter and 0.25 for dairy Milk. Choc bars
And soft serve ice cream are one person use and bowls and packs
including 1 and 0.5 liter as well.
 Service: Satisfying the dessert needs of the population in the best possible
manner and delivering quality every time to the consumer

16
  Returns: Only in the case when product is expired.

Price
List Price: Price varies for different ice creams. Depending upon

 Cups Rs 15 and Rs 30
 Soft serve ice cream Rs 10-50
 1Ltr ice cream Tub Rs 150
 2ltr ice cream Tub Rs 275
 Cones Rs 30-40
 Olper per Ltr Rs 90
 Olper (200ml) Rs 25
 Trang Tea Whitener(200m.l) Rs 22
 Olper’s Cream 200 m.l Rs 65
 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 but now they are available throughout Pakistan.
 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 of ice-creams 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.

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.

16
  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.

Covert Marketing Activities

Research and Development:

Engro always has invested in its Research and Development for studying the market and
consumer behavior of Pakistan. It launched Tarang with a Punjabi touch i.e. showing people
dancing around the bonfire wearing Punjabi dresses and men holding Dandasa. That was the
main reason why Tarang was first launched in Punjab. It doesn’t only keep eye on its consumers,

16
retailers and stake holders, but it keeps a glance at its competitors i.e. Unilever,
Nestle and Pakola and on their customers as well. It is a output of their Research that a big
portion of Milk Pack customers are now using Olper’s.

Management Information System (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.

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.

 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

16
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.

Formulation Of Strategies:

Engro has strongly designed the strategy of their food brands. They have planning to wipe out his
competitors by 2015 and is also utilizing themselves the level best to work upon it. Their every
brand has a unique strategy which is not easy to copy as well by the competitors. Their
marketing and promotional strategy is somewhat the basic reason of success of their business.
For example, the ad of Olper’s Qawali in which Atif Aslam was featured is one the most
favourable ad of Pakistan which people had even watched by subscribing on youtube. As a
reason of which Olper’s enjoyed heavy sales in those Ramzans.

16
Product Positioning Map

16