The Dairy Industry Of Pakistan Marketing Essay

The Dairy application Of Pakistan market EssayThe dairy farm labor of Pakistan is a very war-ridden industry and has extensive potential. Unfortunately, dairy processors in Pakistan muted have miles to make up before they bottom exploit full benefits of this industry. The draw takings of the verdant has non been up to the mark and as a result the pick up for dairy intersection points outweighs the supply. Tradition on the wholey, nation living in urban beas preferred to assimilate fresh take out delivered to their homes by Gawallas. as yet with the passage of cadence, as people became more and more health conscious in that location was a fight towards the consumption of UHT draw and its demand has been growing ever since. In the UHT take out segment, firms the kindred Nestle Pakistan express and Engro Foods Limited have emerged as atomic number 82 commercialise players. These firms with their bundle of financial re radicals have made huge habilitateme nts in getting state of the art technology, manpower and strengthenceing their promotion efforts. scorn the accompaniment that local dairy processing industries have been subject to come across the quality standards of Nestle and Engro to a greater extent, these firms lack in their merchandise efforts. twelve noon Pakistan Limited is angiotensin-converting enzyme such firm which is macrocosm conventional collect to poor trade efforts and has non been able to reap the benefits of the industry in which it operates. noon Pakistan Limited is a impale of the Noon Family and has been market its yields under the bulls eye name of Nurpur. The firm enjoys market leadership in the category of butter. Initially when the firm launched its UHT draw the market response was good. However with the passage of time, the injury achievement of Nurpur UHT draw has deteriorated due to mismanagement of trade efforts. While management claims that they argon able to sell whatever they produce, the market batch results render that the prevailing performance of the smear has not been up to the mark. The firm relies on the selling concept which is a short call approach and little emphasis is existence given to the concept of pit building. It is the adopt of the hour that Noon Pakistan Limited adopts a long name strategic approach if it wants to secure its position in the market for gray-headed age to come.To atomic number 18na the quality to the fore being set about by Noon Pakistan Limited, a rigorous Literature review was take overed fol blue-pitcheded by interviews with employees of the firm, retailers and consumer surveys. Financial analysis and similitude with Nestle and Engro was done. Even though Noon Pakistan Limited does not concern the financial strength of its competitions, there ar many ways in which the firm can mend its position in the market.The premier footfall in building strong blades is to turn back that the brand has a amply salience. The brand should have top of the mind opine and recognition. Unfortunately the survey results analyzed using SPSS softw atomic number 18 proved that Nurpur milk is not the first brand which comes to the mind when a consumer wants to purchase UHT milk. Majority of the respondents could not purge recall any advertisements of Nurpur milk. A major proportion of the respondents too high schoollighted the fact that Nurpur milk was occasionally short in the market. The results of the retailer interviews also prove that Noon Pakistan Limited has to improve its trade promotion schemes as legal age of the retailers were not satisfied with current distribution practices of the fraternity. The retailers highlighted the fact that the company should improve its promotion activities so that consumers start demanding Nurpur milk.Companies such as Noon Pak Limited, those pretermit to expand, eventually move to the phase out or withdrawal stage. This is beca give intricacy ensures the continuity of profitability, brands, innovation and progress. It also creates employment opportunities and contributes to the exploitation of economy by improving the GDP. Noon Pakistan Limited however is not expanding and considering the intense warring environment that prevails in the dairy industry, if they fail to expand in prospective the company might have to face a stark serving of a complete phase out and therefore should start redesigning their merchandise and management strategies accordingly.Due to weak financial resources, Noon Pakistan Limited should implement alternative strategies to master(prenominal)tain its position in the market. The firm inescapably to invest in consumer promotion activities like in store sampling and essay trials. The firm also needs to focus on its BTL activities in put to strengthen the perceptual positioning of the brand in consumer mind. The firm needs to revise its make upment policies with retailers and start providi ng goods on a credit foot to those retailers who have a good reputation in the market. In short, Noon Pakistan Limited should revise its current practices and trading operations. The firm should let go its old concept of selling and instead focus on building the honor of its brands if it wants to strengthen its position in the market for the future.2.0 Introduction2.1 The Noon chemical groupThe Noon Group of Companies is being managed by the Noon family. The group has qualify and experienced professionals. The Noon Group of Pakistan strives to improve its profitability and safeguard its stake carriers beguile charm maintaining highest quality standards and serving the community1The Noon Group of Companies has versatile ancestry ventures and Noon Pakistan Limited is one such profitable venture of the Group. obscure from Noon Pakistan Limited a brief description of the new(prenominal) demarcation ventures be as follows-1. Noon Sugar Mills LimitedThis venture was in incor porated in 1964 and manufactures white scribble. Initial crushing message was 1500 MT of sugarcane which has been extend to 4000 MT over the passage of time.22. Pioneer cementum LimitedPioneer Cement Limited was incorporated in 1985 with a total enthronisation of Rs.2660 million and achievement subject of 630000 tons per annum. The limit is situated in Chenki, Khushab.33. Noon International Private LimitedNoon International Private Limited is a trading company which was completed in 1972. The company employs 43 people including a team of 15 professional gross sales engineers. This firm represents various international companies of repute in Pakistan and markets their equipment in the fields of textile, power times, sugar, fertilizer, chemical, steel, cement, food and milling44. material Technics Private LimitedIncorporated in 2004 with a total investment of Rs 100 million, Textile Technics is a joint venture between M/S coloured Reed of Spain and Noon International Priva te Limited. The project has a output signal capacity of 22000 meters of reed per annum55. Textile ServicesTextile Services was established in 1994 and provides dishs to over 200 customers of Sulzer Textile Projectile twist Machines. The company employs 32 people and provides training, technical service and spare separate for clients62.2 Noon Pakistan LimitedIncorporated in 1966 with a total investment of 553 million, Noon Pakistan Limited produces various products namely Butter, Cheese, UHT milk, HCLF, Pasteurized milk, Flavored milk, Juices, Water, Desi ghee, Honey and Jam. Instal conduct capacity of the coiffe is 72000 Liters/2 shifts and there are 700 employees. Noon Pakistan Limited has been merchandise its products under the brand name of Nurpur. The plant is located in Bhalwal, Sargodha patch the head office is situated in Lahore7The twelvemonth 2011 was a thought-provoking class for Noon Pakistan Limited. Energy Crisis, security situation coupled with ravage floods h ad exerted significant pressure on the economy and cost of living. Higher inflationary trends continued impacting their spot products particularly cerebrate to fresh milk when shortages led to a cost increase of 16% compared to last year. Additionally, higher ingathering of their products led to severe filling capacity constraints and the market demand could not be met fully. Due to reduced buying power, trend in the market is changing fast as consumers are looking for cheaper products in gloomy packages. Therefore the management at Noon Pakistan Limited has made plans to assess the market requirements and also hike up improve their production efficiency82.3 VisionThe visual sense statement of Noon Pakistan Limited is as follows-Our vision at Nurpur is to be a transformative force in our community and world at adult and to serve as a model of a sustainable bloodline alternative that nurtures social and economic well being in an environmentally sensitive manner92.4 MissionTh e mission statement of Noon Pakistan Limited is as follows-Nurpur is committed to supplying the consumer and customer with the finest, high quality products and to be a leading industry in healthy and nutritious products. Nurpur supports these goals with a corporate philosophy of adhering to the highest ethical conduct in all its business dealings, preaching of its employees, and social and environmental policies102.5 Core ValuesAt Noon Pakistan Limited, consumers are at the forefront of everything they do. The core take to bes of the company include the generation of Ideas that can be constantly challenged to develop next generation solutions, to conduct business openly and fairly while competing fiercely at the alike time, to encourage teamwork with individual flairs, to set tough goals that can be challenged and beaten, to value preservation of the environment and ensure sustainability of organic agriculture, to value mutually adjuvant kindreds among members of local and pl anetary communities112.6 Awards and CertificationsNoon Pakistan Limited has won many honored awards and certifications which are First dairy company in Pakistan to be prove under ISO 220002005, daub of the year award (2006-07) in the category of Butter, imperfection of the year award (2007-08) in category of Butter, Cheese and flavored milk and filth of the year award (2008-09) in the category of Butter122.7 The obtain surgical incisionTo study the operations of the Purchase department, two interviews were conducted with the Purchase Manager. The findings of the interviews have been utilized to disclose the function of the Purchase Department.The purchase incision is responsible for purchasing all materials essential by the head office and plant other then milk which is purchased at the milk collection centre in Bhalwal. Materials which are purchased by the segment range from ordinary items like office and plant stationary to complex materials like Flavors, Spare parts fo r plant equipment and transfer vehicles, Chemicals, Fuel and everything related to the manufacturing process, Logistics and day to day operations. Demand for requisition comes from the pulverization and approval has to be given by the Managing Director. The purchase department presently has 4-5 employees. The department uses a manual governance of keeping records and storing files. The purchase department always keeps 3 copies of requisitions and delivery challans. One copy is sent to the plant, one copy is maintained with the purchase department and one copy is unplowed by the Purchase Manager. The major suppliers of Noon Pakistan Limited are SMC, Sitara Chemicals , Jason Foods and Danisco. Payments to suppliers are made either on cash or credit done the head office. Credit terms depend on contacts and relations with suppliers and can range from 15 days up to a month. According to the Purchase Manager, Noon Pakistan Limited believes in maintaining healthy relations with Suppli ers and this is one of the key strengths of the department The Purchase Manager also stated that in effort of materials needed from local suppliers, the purchase department is given no time and purchase has to be made immediately. However when imported materials are required from foreign suppliers, the Purchase department is informed in advance as shipping takes time. There is no fixed pattern of purchases made throughout the year and it all depends on plant and market requirements. The quality of materials purchased is check up on at the plant and if there are defects the merchandise is returned to the supplier.132.9 The market DepartmentTo study the operations of the market Department of the firm, two interviews were conducted with the merchandising Manager.Marketing research activities are outsourced. The Marketing Department purchases monthly reports from variant marketing research agencies like AC Nielson and Tetra Pak. In this way the marketing department stays in touch with the latest trends and competitor activities. Some of the agencies with which the marketing department works are SABB Marketing, Time and Space, Orient, HRK communications, Aura Communications, TOPAZ Communications and ADZ Communications. These agencies prepare designs of print ads and commercials. The brand manager discusses the various designs with the Marketing Manager and after making necessary amendments and recommendations approval is given to Marketing agencies. The Marketing Strategy of Noon Pakistan Limited is Differentiation dodging. However the strategy to be choose for each brand depends on the market performance and competitor activities. Since UHT milk is difficult to differentiate, the current strategy being adopted is to position it as a milk which is enriched with vitamins needed for healthy harvest-home and development. The target market of UHT milk is Housewives and working females as well as males. Different SKUs are being utilise to target different Soc io scotch Classes like the 1000ml pack is targeted for SEC-A while the 200ml and 250ml packs are targeted towards low income households. The main competitor brands of Nurpur milk are Olpers, Milk Pak, Good Milk and Haleeb. The marketing department does not go for an offensive strategy because Nestle and Engro are huge giants with bundle of resources. Noon Pakistan Limited can be classified as an Analyzer because it is operate both in a stable and driving market. Another reason for not adopting an offensive strategy is that volumes are low. The main weakness of the Marketing Department is that very little attention is being paid towards building brand equity. The department is centering on increasing sales which is a short term approach rather than focusing on building their brands 142.10 Organizational Chart of the Marketing DepartmentFigure 3 Organizational Chart(Marketing Department)Source inbred accompany DocumentsThe steel Manager is responsible for dealing with various M arketing Agencies and reports to the Marketing Manager. The Marketing Manager reports to the General Manager of gross revenue and Marketing152.11 The Sales Department cardinal interviews were conducted with the Sales Analyst of the firm to get insights regarding the operations of the Sales Department.The organizational structure of the Sales Department even offs of the General Manager of Sales and Marketing, depicted object Sales Manager, Regional Sales Manager, Area Sales Manager, Field Managers and Sales officers. Territories have been assigned according to location and comprises of Central Zone, Southern Punjab unvaryingise and Northern zone which includes RWL/AJK, Hazara belt and Pakhtoon.K belt. The process of foreshadowing yearly sales is that last old age closing sales are doubled and the sum of money is set as the Sales Target for the next year. There are more than 280 distributors all over the body politic and each Sales Officer has to monitor and look after three to four distributors. If targets set in the year 2012 are met, the entire Sales Team will go on a vacation to Dubai on the companys expenses. Noon Pakistan Limited has also started exporting its products to countries like England, Kenya and Afghanistan.162.12 Marketing Mix of Nurpur UHT milkNurpur UHT milk has been positioned as a milk which is enriched with vitamins needed for healthy growth and development.17 The milk is packed in Tetra Aseptic Packaging which allows long lasting storage and shelf space. Currently three SKUs are available in the market which are 200ml, 250ml and 1000ml. Initially the determine insurance policy adopted for Nurpur milk was market sixth sense pricing, which means prices were low compared to competing brands. Recently the pricing policy has been changed and forthwith the pricing policy is competitive pricing policy as shown -Product boxingUnit/CtnRetailer MarginTrade PriceConsumer Price1.UHT milkCtnsUnitsCtnsUnits1000ml126.09%101884.83108090200 ml244.35%39116.2940817250ml275.97%58621.762123 put off 3 Price List of Nurpur UHT milkSource Company Internal DocumentsDue to low volumes produced the company has adopted the policy of selective distribution. The company offers various discounts to retailers to push their products into the market18 . The indirect distribution channel being used is shown below-Figure 5 Distribution ChannelSource Company Internal Documents2.13 SWOT AnalysisStrengthsMarket leadership in selected product categoriesStrong and Experienced Sales TeamStrong Supplier relationshipBrand Loyal CustomersStrict adherence to Quality StandardsFirst dairy company in Pakistan to be certified under ISO 220002005WeaknessesWeak coordination among departmentsNo emphasis on building brand equityNo baronial HR DepartmentCentralized Decision MakingNo policy of recruiting fresh bloodSelective DistributionOpportunitiesExporting products to foreign countriesincrease demand for dairy products due to urbanization and increasing cosmosEnsuring approachability in untapped marketsLaunching innovative products for health conscious consumers tone ending for backward integrationThreatsReliance on fewer suppliersRising prices of sugarRising prices of oil increasing transportation expensesEnergy and Power Crises procurance of Quality Milk as milk production fluctuatesRising puffiness decreasing purchasing power of consumers3.0 Literature ReviewPakistan has been classified as the third largest milk producing and consuming field in the world. There is a huge potential for liquid dairy products because 94% of the total population still consumes unpackaged milk. Dairy Processors in Pakistan are orgasm up with innovative products. An example is Tea Creamer which has been quite successful because tipsiness milk with tea accounts for 32% of total milk consumption in Pakistan. Consumption by low income consumers in developing markets is forecast to increase by from about 70 cardinal liters in 2011 to 80 billion li ters in 2014 and many of these consumers are expected to switch in coming years from drinking loose milk to packaged milk19According to Tetra Pak, global consumption of liquid dairy products is set to rise by a compound annual growth rate (CAGR) of 2.9% in 2011-2014, accelerating from 2.5% growth in 2008-2011, led by buoyant demand in Asia, Africa and Latin America. Asia, Latin America and Africa are all expected to record higher growth rates in consumption in 2011-2014 than in 2008-2011. Asia is forecast to consolidate its position as the worlds biggest market for liquid dairy and dairy alternatives, while Latin America is forecast to overtake Western Europe as the worlds second biggest market by 2014, the research shows. Demand in Asia-Pacific is forecast to rise by 4.6% (CAGR) in 2011-2014 to some 165.3 billion liters20The research shows that there is a huge potential for dairy processors and demand for dairy products peculiarly UHT milk is likely to go up in future years to com e. This demand for dairy products will not plainly exist in Pakistan but also in developing countries abroad. The demand for milk in neighboring countries also provides huge opportunities for dairy processors and they can expand their operations in those countries by either exporting their products or setting up plants. This research by Tetra Pak provides sound evidence that the future for dairy processors is quick-witted if they can overcome certain issues of availability, quality of milk and reduce operating expenses.Pakistans milk and dairy products industry has already reached $26 billion as of March 2012. Engro is the market leader in the UHT milk segment with a share of over 44%21A major issue being set about by the dairy industry of Pakistan is that the total production of milk in the country is not fulfilling domestic needs. While human beings population and consumption per capita has been increasing at the rate of 3% annually, milk production in the country is not incre asing at the equal pace22In Pakistan, Buffalos are the main source of milk production with a contribution of 66%, followed by Cows with a contribution of 32% and Goats and Sheep which contribute 2% of the total milk produced. The major Buffalo breeds are Nilli-Ravi and Kundhi, while Sahiwal and Red Sindhi are supreme cow breeds. A majority of small holding farmers, who fulfill 90% of the total milk requirements of the country are not linked to the formal dairy market. The reasons which have been attributed to low productivity of animals are low genetic life of cattle, delay in puberty, scarcity of feed resources, high disease incidence, disorganized marketing system and traditional farming practices. The low production of milk in the country places a huge burden on dairy processors and in the year 2008-09, dry milk products worth Rs. 1.1 Billion had to be imported due to shortfall of milk production23This hold provides information regarding the major sources of milk in the count ry. It also clearly indicates a major issue being faced by dairy processors in the supply chain, which is procuring quality milk for further processing. Milk is the major raw material for dairy processors and insufficient milk production means that dairy processors have to operate with constrained capacity and cannot expand into new markets to meet future demands of milk. As the article highlights that not alone is the productivity of animals low but majority of farmers do not have access to the formal dairy market.In Pakistan, 97% of milk produced is consumed by producers in far flung areas and only 3% is being touch and marketed through formal channels. Demand for milk is present not only in Pakistan but neighboring countries like Iran, UAE, Saudi Arabia, Malaysia and Philippines which can be harnessed to advantage. Apart from bacteria of tuberculosis and hepatitis that naturally occur in milk, the Gawala adds many more impurities specially contaminated water for milk dilution. otherwise impurities like ice slab, soda bicarbonate, and formalin are added to stay fresh the milk from intense weather. Improper marketing channel is one of the major constraints being faced by the dairy sector. The informal private sector comprises of various agents in the supply chain each performing specialized roles. These comprise of producers, collectors, middlemen, processors, traders and consumers. Seasonal fluctuation hampers milk production and consumption in Pakistan. Milk production is maximum in the months from January to April due to availability of green cannon fodder and reaches minimum in months of May to August. Alternatively milk consumption is high during summers and low in winters. Cold storage facilities are limited in Pakistan due to high cost of operations and shortage of electricity. Dairy processors like Nestle are looking at options to reduce or travel by their reliance on small farmers due to milk adulteration and delays in getting the quantity of m ilk which hampers production. Dairy processors should vertically integrate their activities by Corporate Farming and offer additional services and support to moderate and large farmers in order to get bulk quantities of milk from them24This article highlights that opportunities exist for dairy processors to export their products in neighboring countries. It also explains how milk is collected and various contaminations which are added to raw milk. Procuring bulk quantities of milk is a big issue for dairy processors and their viable options are to reduce their dependence on small farmers. The constraint of seasonal fluctuation and ensuring quality standards is also a prime concern for dairy processors since all these factors hamper production and ultimately sales.The milk marketing chain in Pakistan can be classified into an informal marketing chain and a formal marketing chain. The informal milk marketing chain is highly unorganized and milk is delivered under insanitary conditio ns. The formal marketing chain on the other hand is more organized and utilizes Cold Storage Tanks to deliver milk from collection centers to processing units25The informal marketing chain provides the end consumer with low price dairy products at the cost of poor quality standards and unhygienic conditions. The formal marketing chain on the other hand is more conscious towards meeting health standards. However consumers also have to pay more for purchasing their products26The demand drivers of the dairy industry include increased spending on healthy dairy, increasing nuclear families and working women, increase in demand for functional dairy, organized retail and private nock penetration, changing demographics and rise in disposable incomes and increasing urbanization. The challenges being faced by the dairy industry are that milk productivity is still too low, R D is low, human resource challenges have to be addressed, supply chain hindrances have to be minimized and quality sta ndards need to be improved27The processing of UHT milk involves six touchstones. In the 1st step fresh milk from cows enters into the UHT process at 39.2 degrees Fahrenheit and contains 50 kinds of bacteria or so of which are harmful to health. In the 2nd step the milk flows through pipes in which the temperature gets hotter and hotter until it reaches a holding tank and bacteria gets killed as the milk flows through the pipes. In the 3rd step the milk is heated to 278 degrees Fahrenheit for 3 seconds which kills 99.9 % of the bacteria. In the 4th step the milk is quickly cooled down to 39.2 degrees Fahrenheit which preserves essential nutrients and vitamins. In the fifth step the UHT milk is packed in Tetra packing within seconds to prevent bacteria from entering again in closed pipes and tanks. Finally in the last and 6th step the packed UHT milk is ready to be transported28Tetra Pak is the pioneer in aseptic packaging. In this type of packaging the product and the package are s terilized separately and then combined and fuddled in a sterile atmosphere29The reason why dairy processors like Noon Pakistan Limited use Tetra Packages is because it allows products to be stored for up to a year without refrigeration which increases shelf life of milk.Branding is one of those marketing concepts which has spacious importance since times immemorial. This is because it is the distinguishing swash between various goods and services. Customers perceive a concept of brand as something with which they can easily associate attributes of a product and to build a strong trust over time. This in turn results in brand equity which is long lasting and is a result of effective marketing efforts on the part of management of the company. With the approach of technology and trends of packaged products, branding is no more a source of acknowledgement of a product but way more than that. It is now used for building emotional attachments to both the companies and the products. Ap art from the mere appellative of the product there are other attributes of branding such as customers involvement, stress on higher quality and standards and other intangible attributes which are related to the brand name and in particular its symbol. Branding helps in creating images in the minds of consumers so that they can be ensured that their product is unique and different from the rest. Therefore, it can be tell that a brand can only be recognized as a strong entity if it continues to provide attributes that it has been declare and are provided consistently.This shows the importance, growth and need for branding a product and service in recent times. This is because initially, consumers associated the brand with something that can be used for identification purposes only. However, now we can see that branding is way beyond that and is interested with perceptual positioning of a product more than a distinguishing feature alone. Also a brand can emerge as a strong and well established brand only if the consumers are able to experience consistent delivery of attributes that have been promised by the company. Therefore, no brand can survive in the market if it is unable to fulfill its brand promise and this is a new phenomenon towards which we are seeing a prototype shift in the market30The concept of brand cognisantness is all related to the mind of the consumer. If a brand has a strong presence in the mind of the consumer he is said to be aware of it31 . It is also delineate asa measure of the percentage of the target market that is aware of the brand name32In order to create brand awareness in the mind of consumers33 ,companies can take use of advertising by marketing their product again and again which will create a few competitive advantages to them. For exampleBrand familiarityName familiarity will prove perpetration to the brandIf a brand isnt recalled during the point of purchase it is of no use and brand salience ensures thatBrand awarenes s will be the some durable intangible assetAccording to Aaker, companies can generate brand awareness through two steps by firstly extend the sales base and then by improving their skills beyond the regular mediums of advertisement34 . There are several ways to measure the brand awareness of a company and these attributes are described belowBrand veritableisation Brand recognition in simplest terms refers to the brand identification when consumers are provided with merely a cue about the brand prior to the actual exposure. This means, that this brand can be easily differentiated from others based on previous knowledge about the brand35Brand Recall Brand recall basically refers to the aptitude of the consumer for remembering the brand from the minds memory when provided with category of a product or any other cue36Top of mind Brand The brand which is named by the consumer first when provided with the product category or motley is known as top of mind brand37Dominant Brand When a sked from the consumers, if a brand name is recalled by the majority of the respondents then that brand is said to be the dominant brand38Therefore from the above research it can be analyzed quite easily the significance of the brand awareness. A brand which is able to achieve maximum brand equity and becomes a dominant brand can undoubtedly become the largest market share holder amongst the competitors. Building brand awareness however, is a challenge that is faced by the companies and they need to make their marketing efforts strong in order to ensure that among a huge pool of consumers, the brand awareness of their brand is most dominant as it will provide both economical and perceptual benefits to the compa