Engro Foods vs Unilever Foods

This Case study is conducted for making a comparison between Unilever Foods and
Engro Foods. We here discuss Management, Strategic, and Marketing Strategies of
both companies. We also discuss the attacking strategy used by Engro Foods and also
highlighted the defensive strategy used by Unilever Foods.

13

Engro Foods vs Unilever Foods

Case Study Submitted To:

Prof. Zia Ur Rehman

Group Members:

Aakif Ajmal

B.C.09-740

Salman Daud

B.C.09-735

Rashid Mehmood

B.C.09-734

Saleh Rabbani

B.C.09-752

Hasnain Rasheed

B.C.09-725

Shakeel Nawaz

B.C.09-729

Hailey College Of Commerce

University Of The Punjab Lahore

2013

Engro Foods vs Unilever Foods

2013

Economy Review of Pakistan

Pakistans economy can be characterized as semi-industrialized. The countrys industrial sector
constitutes 24.3% of the countrys gross domestic product. Pakistan has a total labor force of
55.88 million (as of 2009)1. The largest industries of the country are textile, cement, agriculture,
fertilizer, steel, tobacco, edible oil, pharmaceuticals, construction materials, shrimp, sugar, food
processing, chemicals and machinery. Pakistans industrial sector experienced tremendous
growth between 2008 and 2011 despite the shortage of electricity. However, it is worth noting
that net foreign investment in industries of Pakistan constitutes only 2.5% of the countrys
GDP.2
Food Industry in Pakistan
Food industry has become second largest economic sector sharing 17% of GDP in Pakistan.
Despite the food shortage in the country, food industry in Pakistan has become the second
largest industry sharing 17 percent of the gross domestic product (GDP) as Pakistanis are
spending 42% of their total income on the food and beverages.3
There are 1,000 larger-scale food-processing enterprises in Pakistan and overall food retail and
wholesale business accounts for 17 percent of the GDP.
Being a labor-intensive, agriculture-based country, it is no surprise that the food industry
employs over 20 per cent of the countrys working population. Approximately 75 per cent
population consists of farmers, orchard men, cattle men, fishermen and others involved in the
production of raw materials.4
The food industry works in four phases; production, process, transportation and distribution.
Thus we can see how it involves everyone right from a small farmer to a retail distributor. The
linkages in this chain are very crucial and a slight disturbance in anyone phase can disrupt the
entire cycle. The food industry has been classified as a major sector of food beverages and
Tobacco. Thus apart from agricultural inputs like wheat, maize, cotton and sugarcane, fruits,
vegetables and dairy also play a vital role.
Citrus fruits and Mango are the major fruit produced in Pakistan. The country stands among the
top ten citrus fruit producers in the world and amongst the top five in mango production.

Government of Pakistan, Ministry Of finance.

www.pakboi.com.pk
3
Pakistan Council of Scientific & Industrial Research.
4
http://en.wikipedia.org/wiki/Economy_of_Pakistan
2

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Introduction to Engro Pakistan

Engro Chemical Pakistan Limited is the second largest producer of Urea fertilizer in Pakistan.
The company was incorporated in 1965 and was formerly Exxon Chemical Pakistan Limited until
1991, when Exxon decided to divest their fertilizer business on a global basis and sold off its
equity of 75% shares in existent company. The Employees of Engro, in partnership with leading
international and local financial institutions bought out Exxons equity and the company was
renamed as Engro Chemical Pakistan Limited.5
Engro is a public limited company listed on the Stock Exchanges of Karachi, Lahore and
Islamabad. The principal activity of the Company is manufacturing, purchasing and marketing of
fertilizers. The Company is also involved in the production and marketing of seeds and has
invested in joint ventures engaged in chemical related activities. As part of its diversification
strategy, controlling interest was acquired in a company offering industrial solutions in
automation and control. A new milk plant has been established at Sukkur the milk is branded as
Olpers.
Back Ground Of Engro Food Limited
Established in 2005, a 100% owned subsidiary

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 billion which provides direct employment to 750 people. First
investment of dairy plant Processed milk market is growing at approx. 20% per annum
Olpers achieved peak market shares of 12.3% within 6 months of launch Other products
launched Olpers Cream, Olwell.
High Calcium Low Fat Milk (Premium Brand) Plans to expand product portfolio Milk
processing capacity to increase by 200% to 200 million 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
tons to 119 tons by the end of 2007 with global food major in advanced stage of
negotiation.6

www.engrochemicals.com

www.engro.com.pk\websearch\marketing-sales.apx.html

Engro Foods vs Unilever Foods

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Top quality brands like Olpers, Olwell, Tarang, Omore and Owsum have been successfully
launched under the helm of Companys dairy products. To support these brands and their
highest standards of quality, Engro Foods has invested heavily in milk processing and milk
collection infrastructure.
At a glance (as of December 2011)

Total Employees: 1,376

Total Revenue: Rs 29,859 Million7
Muhammad Aliuddin Ansari (Chairman)
Appointed President and CEO of Engro Corp in May 2012, Muhammad Aliuddin Ansari holds a
degree in Business Administration, with a specialization in Finance and Investments. Ansari
started his career as an Investment Manager at Bank of America in London which later became
World invest after a management buyout.
Thereafter, he worked as CEO of Emerging Europe for Credit Lyonnais Securities Asia. He has
also worked as CEO AKD Securities and Dewan Drilling, Pakistans first independent drilling
company. Ansari currently holds directorships in all Engro companies, and is also a member of
the Board of Directors of Dawood Hercules Corporation Limited, Dewan Drilling Limited, Dewan
Petroleum Limited, Pakistan Chemical and Energy Sector Skill Development Company and
Pakistan Business Council. He has also chaired a number of SECP committees and has served on
the Boards of the Karachi Stock Exchange, NCCPL, Lucky Cement and Al Meezan Investment
Management amongst others. He joined the Engro Corp Board in 2009.8
CEOs Message
At Engro Foods, engro pride ourselves on going above and beyond what
is expected of us. Despite facing a challenging business environment,
2012 proved to be an unmistakably outstanding year for Engro Foods as
it grew in size, productivity and scalability by leaps and bounds. Through
the year the primary focus was evident in our quest for performance
driven efficiency, where we sought to weave efficiency as a binding
thread running through every fabric of our business including our
operational, logistical, capital and people management frameworks. With
all key business areas optimized for maximum efficiency, we achieved
significant growth and high returns on all our investments, a trend that
7
8

Annual Report Engro Pakistan Limited 2011

Annual Report Engro Pakistan Limited 2012

Engro Foods vs Unilever Foods

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will continue to drive our success in the coming years. In 2012, we made conscious efforts to
reignite the mindset that sets us apart as an excellence driven organization by embedding
innovation within every facet of our operations including our business, marketing,
manufacturing and communication strategies. Deeply shared by our people, this passion for
innovation continues to drive our business growth, making our brands sought after across
Pakistan and beyond. As we strengthened our operations, sustaining our inclusive business
model to impact lives and foster long-term economic growth remained a key area of focus for
Engro Foods in 2012, as we sought to expand our footprint and create more opportunities for
the small-hold dairy farmers who make an invaluable contribution to our business. This was in
stark contrast to a CSR-focused approach where benefitting the peripheral rural community and
bottom of the pyramid was made an intrinsic focus area of our business model. In our efforts to
improve livelihoods and the quality of life for the thousands of dairy farmers who serve us,
Engro Foods will continue to invest in productivity initiatives at the grassroots level to help
farmers reap the full benefits of sustainable agriculture. To this end, we were amongst the
winners of the G20 Challenge on Inclusive Business Innovation; further highlighting our
commitment to pioneering business models which positively impact Pakistans marginalized
rural communities.
During the year, there was tremendous emphasis on reigniting organizational innovation focus
which has long remained a hallmark of our business operations.
Background of Unilever
The company under its present name of Unilever was founded in 1929 when two major
companies, Margarine Unie and Lever Sunlight, merged. Margarine Unie was itself the result of
a merger of two Dutch-based margarine companies, Van den Bergh and Jurgens. From the
beginning, Unilever adopted a dual structure involving two headquartersone in London
(Unilever PLC) and one in Rotterdam (Unilever NV) and shared a common board of directors,
with a British citizen always heading the British PLC branch and a Dutch citizen always heading
the Dutch NV branch.
By 1930, a third major company merged with Unilever: the United Africa Company (UAC),
basically a large trading conglomerate with very strong positions in the African export-import
trade (mostly involving Western Africa). In 1929, the two parent companies already owned
factories and trading subsidiaries in Asia and Africa. Both remained dependent on vegetable
and marine oils for their margarine and soap products and so they expanded their activities into
countries where they could acquire these basic raw materials.
In the early years, Unilever developed into a company with worldwide activities. It built or
purchased factories in Japan (1909), Argentina (1928), Brazil (1929), Thailand and Indonesia

Engro Foods vs Unilever Foods

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(1932), India (1933). Between 1945 and 1980, expansion of Unilever activities took place mostly
in Europe. Unilever diversified into new areas including frozen foods, fish production, fish
restaurants, transport, animal feed, chemicals, and printing. This diversification took place
mostly in Western Europe and specifically in its home-countries the UK, the Netherlands, and
West Germany. Unilevers soaps and detergents sectors expanded steadily worldwide, primarily
through acquisitions. Meanwhile, Unilevers food sector remained predominantly a Western
European company.9
The 1890s, William Hesketh Lever (founder of Lever Bros) wrote down his ideas for Sunlight
Soap, his revolutionary new product that helped popularize cleanliness and hygiene in Victorian
England. It was to make cleanliness commonplace, to lessen work for women, to foster health
and contribute to personal attractiveness, that life may be more enjoyable and rewarding for
the people who use our products.
This was long before the phrase Corporate Mission had been invented, but these ideas have
stayed at the heart of Unilever business. Even, if their language and the notion of only women
doing house work has become outdated.10
History of Unilever in PAKISTAN
It is the largest consumer products company in Pakistan, UPL is a part of the consumer products
giant Unilever. UPL was established some fifty years ago in the then newly created Pakistan.
The town of Rahim Yar Khan was the site chosen for setting up a vegetable oil factory in 1958
and that is where the first UPL manufacturing facility developed. The UPL Head Office was
shifted to Karachi from the Rahim Yar Khan site in the mid 60's. By this time the once dusty and
sleepy village was the hub of activities for UPL. A residential estate situated near the factory is
the home of UPL employees at Rahim Yar Khan.11
Ehsan A.Malik (Chairman)
Ehsan joined the Board on August 31, 2006 and is also the Chairman and CEO of Unilever
Pakistan Limited. Prior to this, Ehsan was Chairman and CEO of Unilever Sri Lanka Limited. His
earlier international appointments covered Unilevers regional business in Egypt, Lebanon,
Jordan, Syria and Sudan as well as Unilevers Head Office in the UK. Ehsan is a Fellow of the

http://en.wikipedia.org/wiki/Unilever#History
www.unilever.com/history

10

11

www.unilever.pk/foundation

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Institute of Chartered Accountants in England and Wales and alumni of the Wharton and
Harvard Business Schools.12
CEOs Message
The business aims to continue on its journey of profitable
growth. This will not be easy due to various external
challenges i.e. law and order conditions, currency
depreciation, inflationary pressure, employee attrition, poor
GDP growth and competitive intensity.
Unilevers understands of consumers, access to Unilevers
global expertise, R&D Capability / Innovations and better
customer service will help us to counter the aforementioned
challenges. Besides, Unilever will continue to provide
consumers with better value products driven by strong brand
equity. As a means to achieve this, it will also leverage
Unilever ability to attract, develop and retain the best talent
in the country.

Competition
There is a strong competition exists between Engro Foods and Unilever Foods but in few
products in common:
Unilevers Foods Brands:

12

Ice Cream ( Cornetto, Fruttare, Walls Dessert, Magnam Classic, Peddle Pop)
Knorr
Blue Band

Anuual Report Unilever 2012

Engro Foods vs Unilever Foods

Engros Foods Brands:

Omore
Olpers tarrka
Omang Dobala

2013

Engro Foods vs Unilever Foods

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Products Comparison (Unilever Vs Engro):

Unilever was dealing in the products such as ice cream, home kitchen item such as knorr and
healthy morning diet blue band. There is a vast diversity in these products.

Cornetto

Cornetto, first produced in 1976 in Italy, has since risen to become one of Unilevers Ice Cream
power Brands worldwide. Cornetto was introduced in Pakistan in 1995.13

Fruttare

Fruttares mission is to inspire in people the freedom to indulge by providing both pleasure and
health through the natural goodness of fruit without the guilt of too many calories. It was
especially produced to attract the children.14

Knorr

Great flavor is at the heart of Knorr, it adds taste whatever you want in your food. Unilevers
biggest brand.15

13

http://www.unilever.pk/our-brands/detail/Cornetto/323310/?WT.contenttype=view%20brands
http://www.unilever.pk/our-brands/detail/Fruttare/329260/?WT.contenttype=view%20brands
15
http://www.unilever.pk/our-brands/detail/Knorr/338048/?WT.contenttype=view%20brands
14

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Magnum

Celebrate pleasure with the tempting Magnum range an irresistible combination of thick,
cracking chocolate with creamy vanilla ice cream.16

Walls deserts

Launched in 1995, brands across the In-home portfolio are built on the belief that all families
need small moments of pleasure in their lives and treats that make them smile and lick their
lips with delight. Who better to provide this but Walls, with its exclusive In-home range!17

Paddle pop

You only have to take a bite from one of the frozen desserts in the much-loved Walls kids'
range to experience its true magic. But with so many yummy choices, the only problem is
figuring out where to begin!18

Blue Band

Blue Band is a daily source of essential fats and vitamins that help children to grow develop and
thrive. Blue Band was launched in Pakistan more than 20 years ago. It is a good source of 7
essential vitamins (A, B1, B2, B6, B12, D3 and E) that are necessary for healthy growth and
development, both for children and adults.
1.
2.
3.
4.
5.
6.

Vitamin A helps maintain good vision and healthy skin.

Vitamin B1 helps to boost energy in your body.
Vitamin B2 provides energy from carbohydrates.
Vitamin B6 helps nerves and forms red blood cells.
Vitamin D is good for bones and teeth.
Vitamin E helps to protect against heart attack and cancer.19

Engro Foods launched different product but some of them are especially in competition of
Unilever foods products.

16

http://www.unilever.pk/our-brands/detail/Magnum/329257/?WT.contenttype=view%20brands
http://www.unilever.pk/our-brands/detail/Wall-s-Desserts/336688/?WT.contenttype=view%20brands
18
http://www.unilever.pk/our-brands/detail/Wall-s-Kid-s-Range/330381/?WT.contenttype=view%20brands
19
http://www.unilever.pk/our-brands/detail/Blue-Band/337778/?WT.contenttype=view%20brands
17

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Omung Dobala

Launched in 2012, Omung Dobala is our low priced, nutritional vegetable and dairy blend cream
that offers an economical alternative to dairy-based UHT cream. Omung Dobala is also one of
our leading brands in Afghanistan and is being used as a staple diet, as it provides consumers
with an energetic start to their day!20

Olpers Tarrka

Launched in 2007, Olper's Tarrka is our premium desi ghee distinct for its pure flavor and
aroma. A leading asli desi ghee brand that is extracted from milk, a dash of Tarrka in your
favorite cuisine is all it takes to bring out the flavor of your food and leave you craving more.21

Ice-cream

Launched in 2009, Omor's scrumptious range of ice-cream and frozen desserts are a glorious
treat for everyone, be it children or adults.
With its rich, creamy taste, high nutrition content and wide-range of flavors and formats,
Omor is a delectable ice-cream and frozen desserts brand that seeks to cater to a wide range
of consumer groups and taste palettes. Available in more than 30 SKUs including ice-lollies,
tubs, bricks, cups, cones, and sticks of different sizes, Omor has become a household name
across Pakistan.22
Other Differential Products
Unilever

Lipton Yellow Label

Lipton was launched in Pakistan in 1948 and is one of the oldest brands in the country. Our vast
experience in the world of tea blending in Pakistan and around the world means only two
things; Quality & Reliability.
In the modern world, the tea category is often considered to be lacking excitement & thrill.
Lipton plays the role of an energetic brand that aims to modify this perception and redefine the
meaning of tea in peoples lives. By celebrating positivity in everyday life, Lipton helps its
consumers incorporate confidence, optimism and cheerfulness in their lives.
Liptons portfolio in Pakistan consists of Lipton Yellow Label Tea, Lipton Mega Daane, Lipton
Teabags, Lipton Green Tea and Lipton Flavored Tea.23
20

http://www.engrofoods.com/dobala.html
http://www.engrofoods.com/tarka.html
22
http://www.engrofoods.com/icecream.html
23
http://www.unilever.pk/our-brands/detail/Lipton/337236/?WT.contenttype=view%20brands
21

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Rafhan Desserts

Rafhan makes the best desserts and helps consumers celebrate all their special moments in a
delicious and wholesome manner. Rafhan Desserts have gained the trust of their consumers
due to its superior quality ingredients and cutting edge processes.
Rafhan is present on every kitchen counter providing health, taste and a whole lot of energy
from its range of delicious custards, colorful jellies, tasty Ice cream Powder, nutritious Corn Oil,
and superior quality Cornflour. With its new packaging, Rafhan has enhanced its premium look
and feel.24
Engro

Gaining the dairy edge!

Engro Foods have become a trusted name and the preferred choice in the dairy business. There
dairy products redefine quality standards and enrich life for thousands of consumers in a
multitude of ways every day such as Olpers milk, olpers lite, dairy omung, flavoured milk.25

Tarang

Pakistan's No. 1 tea-whitening brand, Tarang is a specialized tea creamer that makes the
perfect cup of tea guaranteed to transport tea-lovers into a state of sheer bliss any time of the
day. The only team-creamer that combines convenience with lasting quality and real value for
money, Tarang is available in liquid and powder formats that further extend the brand's appeal
to a wider audience.
With its distinctly fresh aroma, rich taste and strong focus on enhancing the tea-drinking
experience for everyone, Tarang has evolved into our biggest and most profitable brand since
its launch in 2007, after securing a firm place in the hearts of millions of tea-enthusiasts all
across Pakistan.26
Strategic Management at Unilever Foods
Now we will proceed with strategies being pursued by the Lever Brothers Pakistan Limited at
different organizational level. First we will discuss the corporate level strategy.

24

http://www.unilever.pk/our-brands/detail/Rafhan/338051/?WT.contenttype=view%20brands
http://www.engrofoods.com/ourbrands.html
26
http://www.engrofoods.com/tarang.html
25

Engro Foods vs Unilever Foods

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Corporate Level Strategy

At corporate level Lever Brothers Pakistan Limited is pursuing the strategy of vertical
diversification i.e. driving away from the previously adopted strategy of vertical integration i.e.
now they dont want to perform more than one step of the processes involved in converting
raw materials into a product delivered and ready for consumption. Lever Brothers Pakistan
Limiteds operations are so complex and involve 200 brands in Pakistan so now they wanted to
reduce the operational complexity and going for strategic alliances with their suppliers, instead
of producing themselves and going into complex operations now they want their suppliers to
produce for them.
Through vertical diversification they will be able to eliminate the operational complexity and
costs of buying and selling i.e. the transactional costs. Now they mainly wanted to step away
from operations and want to focus more on customers.

Business Level Strategy

At business level Lever Brothers Pakistan Limited is adopting a very unique and interesting set
of strategies. First and foremost strategy they want to follow is the cost leadership. They
wanted to control cost as much as possible and want to reduce cost by every mean.
First cost efficiency is achieved through outsourcing operations and stops producing themselves
and goes for cost efficient subcontracting.
Second they want to achieve cost efficiency through responsive and cost efficient supply chain,
want to be in touch with suppliers all the time and for that they have connected themselves
with the suppliers and to their suppliers as well to minimize cost related to forecasting now,
they want better forecasting through computer networks so to get the real time information
about the inventory, stock, demand and supply. They are now reducing the inventory as well as
average carrying the inventory of only 3 days and getting closer to the concept of just in time
except for those products for which they have to brought in raw materials from far flung areas
like tea and moreover routings of logistics as well like air routing or ship routing to curtail the
costs other than cost efficiency, they have adopted the strategy of consumer connectivity i.e.
Want to stay closer to consumers rather to operations and want to focus all alternations to
consumers through more research and customer profiles and demographics and wants to
explore new customers and usage of products.

Operational Level Strategy

At operational level, Lever Brothers Pakistan Limited has always adopted the strategy of TQM
only never went for CPR i.e. they have not come up with a new brand in last few years. Only the
improvements or new variants in existing brands or using the same old brand name to
introduce a new product like Lifebuoy Shampoo or Fair & Lovely Soap. So it can easily be said

Engro Foods vs Unilever Foods

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that they believe more in adopting changes rather generative ones or go for single loop learning
only because according to them its very expensive to introduce a new brand name.

Strategic Management at Engro Foods

Corporate Level Strategy

Engro Foods is horizontally integrated itself and increase its number of products. At this time
company has a lot number of products in the market.
Engro use the management strategy of pyramid, in which products are designed on the base of
3 main factors of any economy such as economy class products, middle class products and
premium class products.
Economy class products refers to those product which can be purchased by a low income
bracket group, those products includes dairy omung whose price starts from just 10 RS/whereas tarang dobala & ice lollies as well fall in the same category. The main motive behind
diversifying the products into economy class is to enhance the customer and gain more profit.
Middle class products refer to those products which can be purchased by the low income and
middle income brackets people. Tarang, Olpers Milk, Tarkka and Owl el Milk fall in the category
of middle class products.
Premium class products are referred to those products whose prices are comparatively high
than economy and middle class. These products help engro to catch the market of elite class
too.

Premium

Olw el Milk

owsm Milk

olfrute

Omore (P)

Middle

Tarang

Oplers Milk

Tarkka

Olw el Milk

Economy

Dairy omung

Tarang dobala

Ice lollies
27

27

Macquarie research 2012

http://xa.yimg.com/kq/groups/15240720/327693974/name/engrofoods240512e117710.pdf

Olper Cream

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Business Level Strategy

Engro Foods wants to achieve more market share than other competitors. In order to achieve
the more competitive advantage company uses the differential strategy by differentiate its
products from other competitors. Engro Foods differentiate itself in the form of taste, quality
and availability of their product in the market e.g. most of the Engro Foods product are related
to dairy such as milk while on the other hand most of Unilever foods product are related to tea.
Engro Foods is trying to attain market share by launching differential products.28

Engro Foods Launches Omor in Competition of Walls

Omor Market segmentation

1. Geographic
At the start the only market Omor served was Lahore. After the year they expanded their
business and entered in other cities as well like Karachi. Omor covers Punjabis cities more
strongly because they are closer to its Sahiwal factory Omor.
2. Demographic
Omor has Ice cream for nearly all demographic segments. Take away packs and tubs for
Families, Ice-cones for teenagers and cups and ice-pops for children. They also include all
income groups as well.
3. Behavioral
Omor is planned to be in among one of those Ice-cream companies who are offering diet Icecream for those people who have diabetes problem or are diet conscious when they newly
enter in market .It is a large untapped market segment which they are plan to serve. In this
segmentation, they choose occasional and benefit sought segmentation.
4. Target market
Omore choose Differentiated Marketing Strategy (develop different marketing mix for different
segments) Families, Individuals (youth and adults), Children.

28

Annual report of Engro 2012

Engro Foods vs Unilever Foods

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5. Market positioning
Omores positioning strategy includes:

Benefits
Omore have an image
of full cream milk
which helps to build
image of omore as
icecream enriched
with milk.

Competion
Walls n many
other local products
still dont have such
image of producing
dairy icecream.

Vision
Omore wants to build
animage of being a
product from brand
which is the biggest
achievement of a
brand, whenever
people think about
icecream only
omorecomes to their
mind.

6. Promotion
When Omor ice cream was initially launched they adopted a rather unique way of advertising.
Flyers were thrown in different housing communities using airplanes. Promotion mix
strategy: push strategy (trying to replace Walls deepfreezes with omore by offering incentives
to retailers) Omore sponsor cooking shows. Also run Co-Branding Promotion Campaign with
Shell. (Come to shell and enjoy free omore)
360 Marketing techniques was used when omore comes in 2009 which includes.

Outdoor billboards
Vehicle Advertising
Internet (social networking e.g. Facebook)
Radio ads
Ads on televisions
Printed media

Engro Foods vs Unilever Foods

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7. Public Relations

Omore Besant Event

Lahore Concerts
Sea view festival in Karachi at launch

8. Pricing
Omor Market penetration pricing (A new product pricing strategy to keep in view the
competition (walls) to capture the market, their pricing strategy is based on Competition-based
Pricing, the price of its competitor (Walls) is more or less the same.
Product line pricing classifies as: Frooze RS-(5-10-12-15) Range of family packs RS-(150-120105), Range of individual ice creams (10-15-20-30) Rupees.
Price varies for different ice creams. Depending upon:

Cups = 20rs
Cones= 30rs
Ice Pop: 10rs
Soft service cream= Rs 10-50-1Ltr ice cream
Tub= Rs 150-2ltr ice-cream Tub = Rs 275

9. Place

Channels

Sells directly to the end user through retailers and shopkeepers. This is the trend in Pakistan
followed by many FMCGs.

Coverage

Omore ice cream in starting is only available in limited areas in Punjab .

Transport

Ice cream is transported to retailer and shopkeeper through private transaction 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.

Engro Foods vs Unilever Foods

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Location

Available at large/medium sized and small bakeries, grocery stores and pharmacies in many
cities.
10. Product
A wide range of dairy ice creams and frozen desserts introduced by omore when it enters in
business. Some names of omore ice cream product, Froze ice pops, Nutty/ Caramel Cones,
Strawberry/Mango/Vanilla Affair, Kulfi, Froze Cups etc.
11. Augmented product
Provides ingredients and nutrition information on the packaging and contact information for
comments and queries.
12. Quality
Premium ice cream rich in calcium which is fresh every time and meets hygienic and nutritious
standards.
13. Packing
High quality and eye catching packaging. Packaging color ranges from red, blue, yellow, orange
and green. Packaging is colorful in order to attract children.
Unilever Defensive Strategy to Compete Omore
1. Marketing objectives of walls when Omore launched

Increase walls ice cream parlors in areas.

10% increase in sale volume.
Positive growth of company is to be maintained.
New innovative style of packaging developed to enhance the packaging and to attract
customers.

2. Market Segmentation of walls

Geographic

WALLS have segmented its market in four sections in Demographic:

Engro Foods vs Unilever Foods

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Pakistan such as South, which is Karachi to Sadqabad and then Central from Sadqabad to
Gujranwala and then North from Gujranwala to upside country.

Demographic

Demographic variables of WALLS target market are mostly age and income based. WALLS have
created many sorts of ice creams to cater all age groups. The most popular ice creams amongst
kids are Paddle pop, in teenagers Cornetto and Magnum, commercial packs are popular in
families as whole. WALLS cater both females and males in the society. If we consider the
income segmentation, WALLS is targeting upper, middle, and lower middle income levels.

Psychographic

The psychographic segmenting is done on the basis of the taste and health conscious consumer.
WALLS targeted its market by creating an image of high quality and hygienic products. WALLS
was for anyone, anywhere and at any time, this very well explains psychographic
characteristic of WALLS consumer. Also relating fun and Shugal with ice cream helps depicting
the life style of its potential user.

Behavioral

The behavioral segmentation is done on three different variables that tend to define a
particular behavior or attitude of a consumer. These are:
Occasions
Regular occasions and special occasions.
Usage rate
Thand hai to kya hua!!
Benefits
Quality, presentation and taste.

Promotion

Promotional strategies of WALLs ice-cream are consistent. It uses Pull strategy for promoting
its product because WALLs spent a lot on advertising and consumer promotion to build up
consumer demand.
There are two main distribution strategies which are:
Pull strategy
Push strategy
Walls have very effectively used both of their strategies and its distribution plan has elements
of both of them when omore comes in 2009.

Engro Foods vs Unilever Foods

2013

Push Strategy
Features of push strategy include incentives like free deep freezers, discounts on bulk
purchases for retailers and eligibility for schemes such as free camera tickets based on specific
columns of ice creams sole and lucky draw toys gifts hampers for children.
Pull Strategy
Pull strategy is supported by advertising campaign that reminds and persuades customers to
buy ice cream. This is facilitated by price off which are frequently offered by the company.

Promotional Tools

Following promotional tools used by walls.

Advertising
Sales promotion
Publicity

Advertising

The theme of advertisement varies with the product image and positioning. But walls follow the
same theme internally. The advertisement run on TV is made in for foreign countries but now
they hire Nori, Call the band & other prominent stars for their promotion.

Sales Promotion

WALLS has been going a number of sales promotion activities like the:
Cycling System
WALLS started its cycling system for awareness but after that its task was modified into doing
sales promotions for the company. And also cycling system has proved excellent in terms of
sales and promotion.
Discount Coupons
WALLS launches very low price products for the purpose of both market expansion and sales
promotion. Like Solo for Rs.2 and Liter pack for Rs.45 was also to boost sales.
Discounts and Offerings
Walls offered 5% discount in off-season.

Engro Foods vs Unilever Foods

2013

Public Relations

For strengthening itself in relationship markets WALLS is not only going for customer
satisfaction but also stressing upon building strong public relations to compete omore newly
coming competitor.
1. Customers
Price discounts
Quantity discounts
2. Distributors
Shares 50% of the distributors' expenses
Off season discounts: 5%
3. Retailers
Free freezers to retailers
Investment on each retailer: Rs. 22,000
Free freezers maintenance
4. Street Vendors
Free Tikes
To strengthen its relationship with the various public and customers WALLs
sponsors an Art exhibition

Engro Foods vs Unilever Foods

2013

Financial Analysis of Unilever Foods Vs Engro Foods

Sales Comparison29

Year

Unilever Foods

% Change

Engro Foods

% Change

2007

2,376,408

100%

3,631,000

100%

2008

3,081,879

129.68%

8,173,000

225.08%

2009

3,376,511

109.56%

14,665,000

179.43%

2010

4,040,887

119.67%

20,945,000

142.82%

2011

4,940,251

122.25%

29,859,000

142.55%

2012

5,861,096

118.63%

40,179,000

134.74%

As the entrance of engro in foods reduced the percentage increase in sales of Unilever food. In
2008 engroo sales increased up to great extent which affected on Unliver foods sales. After
2008 Uniliver adopted defensive strategy to enhance to sustain his sales growth that resulted in
stability of Uniliver sales but decrease the aggressive upward trend of engro foods sales,
however in 2012 still the increasing trend in sales is greater than Uniliver sale.

29

Annual Report of Unilever foods & Engro Foods 2012

Engro Foods vs Unilever Foods

2013

Profit & Losses30

Year

Unilever Foods

Engro Foods

2007

224,492,000

(620,000,000)

2008

348,546,000

(554,000,000)

2009

176,792,000

(433,000,000)

2010

437,463,000

176,000,000

2011

616,695,000

891,000,000

2012

715,172,000

2,595,000,000

As in 2007 and 2008 the engro foods was under establishment the operating expenses of engro
foods was quite greater that resulted net loss to engro foods however there sales were very
high. Engro foods was in loss upto 2009..after 2009 the balance between sales and operating
expenses substantially come into harmony and engro food obtained the profit of 176,000
thousands rupees. And the very next year its profit increased upto 500% by previous year
profit. The sudden increasing profit trend of engro in 2011 made inverse effect to unilever
profit trend.

30
31

Forecast Sales

Year

Unilever Foods

Engro Foods31

2013

71,450,000

53,394,000

2014

84,300,000

66,154,000

2015

91,600,000

75,543,000

Annual Report of Unilever foods & Engro Foods 2012

http://www.4-traders.com/ENGRO-FOODS-LTD-10879055/financials/

Engro Foods vs Unilever Foods

2013

Product Range of Both Companies32

Product Range

Walls

Omore

Price Range

Price Range

Ice-Lollies

Rs.15/- to Rs.25/-

Rs.8/- to Rs.25/-

Tubs

Rs.240/- (1 Ltr) to Rs.375/-(2 Ltr)

Rs.325/- to Rs.450/-(2 Ltr)

Bricks

Rs.100/- to Rs.175/-

Rs.100/- to Rs.175/-(1.5 Ltr)

Cups

Rs.15/-

Rs.15/- to Rs.35/-

Cones

Rs.35/- to Rs.40/-

Rs.35/- to Rs.40/-

Sticks

Rs.10/- to Rs.85/-

Rs.8/- to Rs.25/-

The product ranges are shown in above table. Omore ice cream is little expensive in tubs rates,
where as the other are almost same except in sticks. Omore most expensive stick is Rs. 25
where as walls had Rs.85.

Suggestions and recommendation for Engro Foods

Following are the suggestions and recommendations for EFL.

32

The co-ordination between different departments of EFL should be improved it will

lessen the bureaucratic cost and increase the efficiency of the company.

The activities like customer satisfaction day should be performed on regular basis so the
company should know the feedback and satisfaction level of customers regarding
the product and the image of the company.

The shopkeeper complains that EFL is not providing replacement for the
expired products, EFL should provide proper replacement to the shopkeeper to enhance

Personally visit to store and gather the price information.

Engro Foods vs Unilever Foods

2013

the image of the company, and create better working relations with such an important
stakeholders.

EFL has shifted to branding concept but it really has not adopted it fully, for
smoother working of the different brands, the sales teams should merged with
respective brand management.

There is no check on the performance of the distributor, and this has led to huge
problems in the delivery of many products in some areas of the city

They should also start to manufacture powder milk in order to meet the domestic
demand and so that it can be helpful in saving the foreign exchange that is expensed in
import in the powder milk from foreign countries.

The company should explore the market potential in a way, so that it can utilize its full
capacity in order to gain economies of scale in the production.

At the moment the company is using focus marketing approach that only that segment
is approached which highly attractive for the company but it should also develop the
marketing program that distinguishes the characteristics of existing available substitutes
to their highly quality & hygiene oriented product.

The company should also develop an integrated awareness plan in order to aware
the people about the quality of the UHT milk as compared to other pasteurized or
loose/fresh milk.