Haleeb Dairy Queen Milk 702x51

Table Of Contents INTRODUCTION...............................................................................................................4 Company Information .....................................................................................................4 International Certifications .............................................................................................4 Company Products History..............................................................................................6 Popular Profiles at Haleeb Foods Limited.......................................................................6 Company mission ............................................................................................................7 Company’s Vision ..........................................................................................................7 Company’s Policy............................................................................................................8 Shipping Units.................................................................................................................8 Company location............................................................................................................9 MARKET ORIENTED STRATEGIC PLANNING.........................................................10 CDL Foods Limited Mission Statement .......................................................................10 Market Oriented Strategic Planning...............................................................................10 Corporate and Division Level Planning Of CDL .........................................................11 The core values at CDL are:..........................................................................................11 Product and Application Scope: Dairy Queen: .................................................................12 Competence Scope.........................................................................................................12 Market Segment Scope..................................................................................................12 Vertical scope.................................................................................................................13 Geographical Scope.......................................................................................................14 Establishing Strategic Business Unit.............................................................................14 Situational Analysis...........................................................................................................15 Product Situation............................................................................................................15 Key Benefits...............................................................................................................15 Strategic Mission...........................................................................................................15 Market Objective ..........................................................................................................16 Market Situation.................................................................................................................16 Competitive analysis..........................................................................................................16 Distribution Situation.........................................................................................................17 Retail Outlets (indirect channel): ..............................................................................17 Direct Sales Promotion Channel: .............................................................................17 Distribution and Warehousing:..................................................................................17 Financial Analysis..............................................................................................................18 Market Targeting Strategy.................................................................................................18 Target Market and segmenting strategy.........................................................................18 Product Line...................................................................................................................18 Price...............................................................................................................................18 Distribution Outlets........................................................................................................18 Sales Force.....................................................................................................................18 Sales Promotion.............................................................................................................18 SWOT ANALYSIS:..........................................................................................................19 STRENGTHS: ..............................................................................................................19 WEAKNESSES.............................................................................................................19 Opportunities..................................................................................................................20

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Threats............................................................................................................................20 Industry competition: ........................................................................................................22 IDENTIFYING COMPETITORS:................................................................................22 Competitive Analysis.................................................................................................22 Competitor’s profile ..........................................................................................................24 Nestle Milk pack limited................................................................................................24 Reaction Pattern: ...........................................................................................................24 MARKET SEGMENTATION AND TARGETING:........................................................25 Market Segmentation:....................................................................................................25 Geographic:....................................................................................................................25 Demographics:...............................................................................................................25 Social Class:...................................................................................................................25 Psychographics segmentation: ......................................................................................25 Patterns of Market Segmentation:......................................................................................26 MARKET TARGETING:..................................................................................................26 Single Segment Concentration: .....................................................................................26 Cost: ..............................................................................................................................26 Quality: .........................................................................................................................26 Sales and Profits.................................................................................................................27 PRICING:......................................................................................................................27 Mark Up Pricing........................................................................................................27 Value Pricing:............................................................................................................27 Price Discounts and Allowance ................................................................................28 DISTRIBUTION CHANNEL: .........................................................................................28 Marketing Channels ......................................................................................................28 Channel Function and Flows.........................................................................................28 Channel Level................................................................................................................29 Multi Channel marketing system: .................................................................................30 Indirect channel:.............................................................................................................30 Direct channel:...............................................................................................................30 Direct: .......................................................................................................................30 Indirect:......................................................................................................................30 ADVERTISING:................................................................................................................31 1. Setting the Advertising Objectives............................................................................31 Informative Advertising:............................................................................................31 Persuasive advertising:...............................................................................................31 Reminder Advertising:...............................................................................................31 2. Deciding the Advertising Budget...............................................................................32 Competition and culture:............................................................................................32 Advertising Frequency: .............................................................................................32 Promotional Budget...........................................................................................................32 3. Choosing Advertising Message.................................................................................33 Message Execution .......................................................................................................33 A. Execution Style:....................................................................................................33 B. Execution Tone:....................................................................................................33

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C. Execution Words:..................................................................................................33 D. Execution Format:.................................................................................................33 Selecting Specific Vehicles: .........................................................................................34 Electronic Media:.......................................................................................................34 Print Media:...............................................................................................................34 Billboards:..................................................................................................................34 4. Deciding on Media Timing .......................................................................................34 5. Deciding on Geographical Allocation.......................................................................34

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INTRODUCTION Company Information CDL Foods Limited (Chaudhry Dairies Limited) is the first food company and so far the only dairy company in Pakistan to get ISO 9002 Certification a Quality Management System. While adhering to this Quality Management System, the company is committed to strict quality standards in all its operations, from the collection of milk to the provision of hygienically processed nutritious products to its customers. The company follows the philosophy of "delighting the customers". The company treats them as partners and keep channel of communication open with them. The company has succeeded in this by continuously improving the quality of its products and by satisfying the needs of its customers. The company believes in creating and sustaining an environment, which encourages learning and empowerment and these in turn help strengthen the quality culture across the business. Haleeb Foods has the distinction of being the first company in Pakistan to use Tetra Pak’s novel packaging formats, Tetra Brick Aspetic (TBA) and Tetra Fino Aseptic (TFA). Haleeb Foods has also introduced a number of unique products previously unknown to the Pakistani market, like Haleeb Labban, delicious traditional lassi (buttermilk) prepared with pure thick milk and yogurt, Candia Tea Max, cardamom flavored tea whitener, Candia milk, packed in distinctive food grade plastic bottle, and Haleeb Good Day, 100% pure and natural fruit juice, free of added sugar, artificial flavors and preservatives. All this and more makes Haleeb Foods Pakistan’s number 1 and fastest growing packaged Food Company. As of fiscal 2006, its annual turnover is Rs. 9 Billion.

International Certifications Haleeb Foods’ products are made with great care, and marked with our quality seal of recognition. We are the only dairy company in Pakistan that undertakes 21 rigorous quality control tests on every portion of the milk collected by our teams. These internationally recognized tests are used to check for: a) adulteration, b) microbiological contamination and c) adequacy of nutritional contents. All processes, from preparation to quality assurance to packaging, are undertaken employing state-of-the-art technology and equipment. Therefore, we take great pride in the fact that Haleeb Foods is the only food company in Pakistan that has the following international certifications of quality and prestige.  HAC (in process controls for safer products)  ISO 9002 (better quality for greater customer satisfaction)

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 ISO 14000 (environment-friendly operations)

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Company Products History 1997

Haleeb Asli Desi Ghee

1998

Haleeb Cream, Candia Skimz Milk Powder

1999

Candia Milk, Candia Skimz Liquid Milk

2000

Tropico Juice Drink, Haleeb Dairy Queen

2001

Haleeb N'rish Instant Full Cream Milk Powder

2002

Haleeb N'rish Fortified Instant Full Cream Milk Powder

2003

Candia Tea Max Dairy Whitener, Haleeb Butter, Haleeb Plain Yogurt,

2004

Haleeb Good Day Pure Juice, Haleeb Fun Day Juice Drink, Candia

Haleeb Lassi Drink

Candy'Up Flavoured Milk

2005

Haleeb Cream With Honey, Haleeb Tea Max with Cardamom, Haleeb Day (Mix Fruit, Red Grapes, Mango Pineapple)

2006

Haleeb Reshmi Pack, Candia Classic, Skimz Pouch, Tropico Nectar

2007

Haleeb Cheddar Cheese

Labban, Haleeb Good

Popular Profiles at Haleeb Foods Limited Salman Nawazish Imran Amjad Suhail Noor Shafqat Niaz Muhammad Sabir Lilla

Manager, Compensation & Performance Management GM Supply Chain Manager istration & HR Network Deputy Manager Warehouses

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Company mission “Build Branded food business to improve quality of life by offering tasty, Affordable and highly nutritional products to our consumers while Maximizing stake holders' value” Building an excellent reputation over the years, Haleeb Foods continues to be at the forefront of product and packaging innovation. By the grace of God, it has achieved market leadership in several food categories with a very strong portfolio, consisting of leading national and international brands.

Company’s Vision Most Innovative and fastest growing food company offering products enjoyed in "every home every day" Apart from its extensive nationwide distribution networks, Haleeb Foods is also serving several export markets including South Korea, Bangladesh, Afghanistan and the Central Asian States.

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Company’s Policy  Build branded food business to improve quality of life by offering tasty, sage, hygenically processed, affordable, highly nutritional food products through environment friendly processes to our customers while maximizing stake holders' value.  Meet the requirement of all relevant legislation and regulation related to consumer satisfaction & safety, environment and other applicable laws etc.  To prevent pollution through controlling levels of harmful emission, effluents and other wastes.  Contribute to safe and healthy environment for our country.  Promote mutual trust with customers, suppliers, employees, shareholders and community.  Provide all the necessary resources for the continual improvement in quality, safety of our products, processes and environment. Consumers everywhere know that only Haleeb Milk makes the best tea ever because of its thickness. Haleeb is pasteurized, homogenized, and standardized pure UHT milk of the highest standard with 3.5% fats and 8.9% solid non fats. It is Haleeb Foods premier brand, and the choice of quality-conscious consumers who only go for the best. Packed in easy to open, 6-layered Tetra Pak Brick Aseptic packaging, it comes with a 3 months shelf life.

Shipping Units Size 250 ml : 1/4 liter 500 ml : 1/2 liter 1000 ml : 1 liter

Price 13 rupees 25 rupees 50 rupees

Carton pack Size 24 pieces 16 pieces 9 pieces

Carton price 296 rupees 380 rupees 425 rupees

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Company location The Head Office of CDL is located in the evergreen city of Lahore at 135Ferozepur Road. CDL is producing a number of food products both for consumers and industrial s. The company also operates as a franchise of Candia Cedilac of . CDL is the market leader in the dairy milk industry. The products are as follows:

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MARKET ORIENTED STRATEGIC PLANNING CDL Foods Limited Mission Statement ‘‘Our business is to Provide nutritious and hygienically processed food product to our customers. Enhancing our reputation for quality in all our operations. Promoting mutual trust with customers, suppliers, employees and shareholders. Providing a healthy and safe environment to our community’’.

Market Oriented Strategic Planning It is the managerial process of developing and maintaining a viable fit between organization’s objectives, skills and resources and its changing market opportunities. The aim of strategic planning is to shape the company’s businesses ‘and products so that they yield target profits and growth.

Dairy Queen is Haleeb another standardized and homogenized pure UHT Milk with 3.5% fat and 8.9% solid non fats. At an affordable price it has won the hearts of consumers everywhere. It is available in 6-layered Tetra Pak Fine Packaging, introduced for the first time in Pakistan and has 2 months shelf life. Shipping Units: 250 ml: 24 pouches per carton 500 ml: 16 pouches per carton 1000 ml: 9 pouches per carton

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Corporate and Division Level Planning Of CDL Corporate Headquarter is responsible for deg a corporate strategic plan to guide the whole enterprise; it makes decisions on the amount of resources to allocate to each division, as well as on which business to start or eliminate. CDL is a market leader in the dairy milk industry of Pakistan. There host of product / brand portfolio in the packaged food category has had a significant role in the quality and innovation of distinct styles and quality of package as well as nutritional contents. The four planning activities undertaken by CDL are as follows    

Defining the corporate mission Establishing strategic business units (SBU) Asg resources to each SBU Planning of new Business

The core values at CDL are:     

Team work Empowerment Trust ability Enterprise

The mission statement of CDL has three major characteristics. Firstly it focuses on limited number of goals. It aims to improve the quality and taste of its dairy products and build branded food business at an affordable price. Secondly, the mission statement represents the policies of the company. It shows that the basic aim of the company is to maximize the shareholder’s wealth. Thirdly the competitive scope within which CDL will operate.

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Product and Application Scope: Dairy Queen: Dairy Queen is the brand name of CDL's UHT milk. Dairy Queen is Pasteurized, Standardized, and Homogenized and Ultra Heat Treated milk of the highest standards. Pakistan Pure Food Laws standardize dairy Queen to 3.5% butterfat and 8.9% SNF (Solids Non Fat) as prescribed. Safe, Economical and nourishing it is available in 1/2 Liter.

Competence Scope CDL has a t venture with Candia, which is Europe's Number One selling milk. CDL Foods limited and Candia of have ed hands to bring to highest quality milk to the customers. So the company has built core competence in diary products. It is also diversifying and has entered into fruit juices and Ghee and yogurt making.

Market Segment Scope All the products are highly competitive in the market, as the prices are lower as compared to the competitors. CDL is targeting all the segment of the society. The aim is to provide nutritive hygienic milk at lower price so that people refrain from loose(gawala) milk, which is unhygienic. CDL manufactures milk in different sizes likes 1/4th liter, half liter and one liter packs so that all the segments of the market could benefit from the nutritive milk.

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Vertical scope Company has its own farms and cattle so it is self-sufficient and doesn’t purchase raw materials. It has its own network of vans, which deliver the milk to all towns and cities. CDL products reach to final consumers through retail stores and sales promotion officer. Company uses multi-channel distribution. The channel levels from raw material to final product and distribution of CDL is as follows:

Manufacturer (Own farms)

Distributors

Retailers

Sales promotion officers

Final Consumer

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Geographical Scope CDL is providing its innovative and hygienic products to all the cities and towns of Pakistan. It’s not exporting any of the milk products. In fact it has signed a t venture with Candia of and Candia is mass marketed in Pakistan.

Establishing Strategic Business Unit CDL has established a separate business unit for its dairy products, which include Haleeb and Dairy Queen. Dairy Queen has been launched to increase the consumption of milk in the household and to provide hygienic and affordable product to the consumers. Haleeb is sold as tea whitener whereas Dairy Queen focuses on consuming packed milk, as it is more hygienic and even affordable as compared to loose milk.

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Situational Analysis Product Situation Dairy Queen is the brand name of CDL's UHT milk. Dairy Queen is Pasteurized, Standardized, and Homogenized and Ultra Heat Treated milk of the highest standards. Pakistan Pure Food Laws standardize dairy Queen to 3.5% butterfat and 8.9% SNF (Solids Non Fat) as prescribed. Safe, Economical and nourishing it is available in 1/4 Liter, 1/2 liter and 1 liter.

Key Benefits    

Guaranteed Clean/Bacteria Free Homogenized Standardized Economical

DAIRY QUEEN OLD PACKING

DAIRY QUEEN NEW PACKING

Strategic Mission  To diversify the market  To increase the consumption of packed milk. Dairy Queen has been launched to diversify the market because Haleeb is marketed tea making milk and Dairy Queen is positioned as purely drinking milk and is available in only half-liter pack for affordability and economy. Secondly the market of Haleeb milk was stagnant, so CDL launched Dairy Queen to increase the market share and to increase the consumption of packed milk.

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Market Objective  The following are the market objectives of Dairy Queen:  Expand consumer awareness of Dairy Queen from 5 to 25% over the planning period by spending 8 percent of the turnover on the promotional budget.  Aim for average price of 13 RS and create price uniformity.  To achieve sales of 20 million RS by December 2003.  To achieve the break even by October 2003.

Market Situation Pakistan's dairy industry produces UHT, pasteurized, powdered and condensed milk, butter, yogurt, cheese, cream and some butter oil. Of a total of 38 dairy plants with a total daily rated capacity of 2,180,000 liters per day, 11 with a rated capacity of 948,000 liters per day have been in operation. The total milk consumption in Karachi is 3.8 million liters per day and the consumption of packed milk is 10% of 3.8 Million. Pakistan now produces an estimated 27.5 billion liters (or27.5 million metric tons) of milk annually, of which only one million liters is processed daily. Approximately half of this amount is processed into UHT milk, 40 percent into powdered milk, and the remaining 10 percent into pasteurized milk, yogurt, cheese and butter. The seasonal nature of supply as well as demand for milk powder from the bakeries and confectioneries, as well as dairy plants themselves, has necessitated the import of powdered milk.

Competitive analysis Currently milk is sold either directly through milkmen or in tetra packs. The main problem with milkmen is that they mix substantial amount of water in the milk, which dilutes it, thus affecting purity. Dairy Queen is launched to compete with loose milk as its priced at 12 RS per half liter pack. The price is very competitive and there are no competitors in the market as no other milk is sold in Tetra Fino Packaging. Currently the Dairy Queen has three major competitors in the dairy industry:    

Milk pack (Nestle Milk pack Limited) Milk Flow Loose Milk Shops Powdered Milk (Various Brands)

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The price of Dairy Queen is relatively lower than both the competitor brands but higher than the price of loose milk. Powder milk is also consumed heavily and all the companies are facing stiff competition with each other. The concept of purchasing milk from milkmen in our country is high because people prefer to buy because they think that tetra packs cost is relatively high and the quality of milk in tetra pack is not as fresh as milkmen milk.

Distribution Situation Company is using 2 channels for distribution of Dairy Queen  Retail outlets (indirect channel)  Sales promotion officers (direct channel)

Retail Outlets (indirect channel): There are many outlets all over the country, which provide every day consumable items to the consumers. 80 percent of the milk’s sales would be through indirect channels.

Direct Sales Promotion Channel: Dairy Queen is being distributed to institutions like government institutes, offices, teashops, caters, schools, colleges and marriage halls. Company has a sales team of 5 for the direct sales promotion. This channel will constitute 20 percent of the total milk’s sales.

Distribution and Warehousing: There are many authorized distributors of Dairy Queen each having more than 8 warehouses to store the milk. Company has its own network of vans, which deliver the milk to all the retail outlets early morning.

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Financial Analysis Dairy Queen is charged at 13Rs to the final consumer. Company has a trade margin of 6.84 %. Company to retailer trade margin is 4 percent.

Market Targeting Strategy Target Market and segmenting strategy Dairy Queen has identified large group within the dairy market with similar wants, geographical location and buying attitudes and has segmented the market on the basis of geographic, demographics and Psychographic of the consumers. Positioning Dairy Queen is positioned as “Fresh and hygienic drinking milk at a very reasonable price with new convenient packaging”.

Product Line Dairy Queen will be launched in 1/4th liter pack after one year of operation in the market.

Price Dairy Queen‘s price is below the competitor’s prices.

Distribution Outlets To increase the distribution of milk in the remaining 4000 untapped retail outlets.

Sales Force Currently operational with 5 sales promotional officer who are responsible for the direct sales to institutions, marriage halls, caters , offices ,schools an tea-shops.

Sales Promotion Dairy Queen has developed a new advertising campaign that s the positioning strategies and has increased the advertising budget by 10 percent.

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SWOT ANALYSIS:

STRENGTHS:       

ISO 9002 Certification - a Quality Management System Using strong brand name “Haleeb” on Dairy Queen pack. Good will amongst the customers. Unique Positioning of Dairy Queen. Competitive price of Dairy Queen. New advertising strategy and increase in advertising budget. Strong distribution channel.

WEAKNESSES  Failure in the first attempt  Inconvenient packaging initially which lead to customer complaints and dissatisfaction.  Uncertainty about the future of Dairy Queen.  Popularity of CDL’s own brand Haleeb that is cannibalizing the sales of Dairy Queen.  Unavailability of Dairy Queen in 1 liter and 1/4th liter packs.  Lack of awareness amongst the majority of population about the benefits of packed milk.

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Opportunities      

Serving additional customer groups Expanding to new geographic areas Expanding product line Vertical integration Take market share from rivals Openings to extend brand name/image

Threats      

Entry of potent new competitors Loss of sales to substitutes Slowing market growth Adverse shifts in exchange rates Costly new regulations Reduced buyer needs for product

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Summary Although Dairy Queen failed in the market in the first attempt but the team of dedicated employees came up with the second version of Dairy Queen. Popularity of Haleeb is a threat for Dairy Queen but the unique positioning; pricing and promotional strategies of Dairy Queen can overcome this weakness.

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Industry competition: Industry is a group of firms that offer a product or class of products that are close substitutes for each other. Industries are classified according to the number of sellers, degree of product differentiation, presence or absence of entry, mobility and exit barriers, cost structure, degree of vertical integration and degree of globalization. The industry competition for Dairy Queen includes Tetra packed milk; loose milk offered by milk shops and powdered milk. All of these are close substitutes for each other. Dairy industry is monopolistic competition as there are many companies like Nestle, Milk flow some foreign brands who are offering milk in various forms and packaging and are able to differentiate their offerings on the basis of price and positioning. All these companies are focusing on market segments where they can meet customer’s needs in superior way and command a price .

IDENTIFYING COMPETITORS: Competitive Analysis The competitive frame work Dairy Queen can be classified as following;

Company Product Name Name Nestle Milk Pack Everyday Royal Milk Dairies Flow Milk Flow NURPUR

Competitive Network Frame Category Class Size

Homogenized Milk Tea max Pasteurized Milk Flavored P. Milk [P=Pasteurized] NURPUR Pasteurized Milk Milk

Tetra pack Tetra Pak

Price in rupees 1L, 0.5L, 55,30,15 0.25L 0-50ml 11 1L,0.5L 28.14

Tetra Pak

1L,0.5L

28.14

Bottled / Tetra Pak

1L,0.5L, 300ml

40,25

Tetra Pak

Market Share 41% 4%

3%

Currently milk is sold either directly through milkmen or in tetra packs. The main problem with milkmen is that they mix substantial amount of water in the milk, which dilutes it, thus affecting purity.

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Currently the Dairy Queen has three major competitors  Loose milk shops  Tetra pack (Nestle Milk pack Limited)  Milk flow (royal dairies) Dairy Queen faces tough competition from CDL’s other brands like Haleeb and Candia. CDL’s product constitutes 52 % of the market share. The price of Dairy Queen Milk is relatively lower than both the competitor brands but higher than the price of loose milk. Powder milk is also consumed heavily and all the companies are facing stiff competition with each other. The concept of purchasing milk from milk men in our country is high because people prefer to buy because they think that tetra packs cost is relatively high and the quality of milk in tetra pack is not as fresh as milk men milk.

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Competitor’s profile Nestle Milk pack limited Nestle Milk pack limited is a t venture of the Nestle, Switzerland and Milk pack limited Lahore. The two companies entered into a t venture in 1988 and today produces UHT milk, butter, cream, orange juice, fruit-based drinks, milk powder, infant cereals, infant milk, dairy whitener, pre-cooked noodles and confectionery. The t venture then commenced local packing of imported coffee.

    

Nestle AG, the world's largest food company Nestlé is a well known name Consumers trust its quality It’s a multi-national company Financially strong

All above strengths were quoted by the research respondents. Competitive position: The competitive position of Nestle is strong as it takes independent decisions without endangering its long term position and can maintain its long term position regardless of its competitors.

Reaction Pattern: Nestle is one of the tigers in the Dairy industry in Pakistan. It reacts swiftly and strongly to any assault or move of CDL. Nestle has introduced Everyday in quarter liter pack for 7 Rs in reply of CDL’s Dairy Queen half liter pack which is of 13Rs

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MARKET SEGMENTATION AND TARGETING: Market Segmentation: Dairy Queen has identified large group within the dairy market with similar wants, geographical location and buying attitudes and has segmented the market on the basis of geographic, demographics and psychographics of the consumers.

Geographic: Dairy Queen is targeting whole country.

Demographics: Dairy Queen has segmented the market on the basis of their income level, social class and age group.

Social Class: Upper lower class, working class, middle class and upper class with particular emphasis on bread earners of the family (males) and decision makers of household purchases (housewives) Income level: 5000-10,000Rs 11,000-25000Rs 26,000Rs and up Age groups: 10-20 years 21 –30 years 31-60 years 65 and up

Psychographics segmentation: Dairy Queen has used value segmentation scheme. Dairy Queen is providing best quality hygienic milk at an affordable price. Dairy Queen is providing value to its consumers by delivering the best at a lowest price.

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Patterns of Market Segmentation: Consumers in the market have clustered preferences. The following are the preferences of consumers:  For drinking purpose  For tea whitening  For cooking desserts and other items Dairy Queen has positioned itself in the largest market segment, concentrated market for drinking purposes.

MARKET TARGETING: Single Segment Concentration: Company selecting single segment for marketing its product is called single segment concentration strategy. Dairy Queen is targeting consumers who prefer packed milk for drinking purpose. It is following concentrated marketing with the aim to achieve strong knowledge of the segment’s need and strong market presence. Dairy Queen‘s aim is to achieve operation economics through specialization its production, distribution, and promotion. After capturing segment leadership, it can earn a high return on its investment. CDL Foods Limited has decided to promote two basic differences for Dairy Queen Milk, these are:

Cost: cost is most effective difference to promote Dairy Queen Milk consumer market is very price sensitive while. There are various brands available in the markets which are higher in price. CDL decided to promote Dairy Queen Milk on cost basis and has kept its costs competitive with loose milk available in the market.

Quality: In this competitive era customers are quality conscious Dairy Queen Milk is quality milk with fresh taste. Communicating the Company’s Positioning For communicating its differences CDL Foods Limited chooses effective media like radio, television, billboards, buses etc to target its customers.

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Sales and Profits. PRICING: Mark Up Pricing The most elementary pricing method is to add a standard markup to the product’s cost. CDL has a markup pricing of 20 % on their cost of good manufacturing The price of Dairy Queen is as follows: Cost to the company

11.25 Rs

Distributors price (invoice price)

11.85 Rs

Trade Price (retail price)

12.27 Rs

Consumer price

13 Rs

Value Pricing: CDL have adopted value pricing, and is charging fairly low price for a high offering. It’s offering high value to its customers. Value pricing is not a matter of simply setting lower prices on one’s products compared to competitors it is a matter of reengineering the company’s operations to become a low- cost producer without sacrificing quality, and lowering prices significantly to attract a large number of value-conscious customers. An important type of value pricing is Everyday Low Pricing (EDLP), which takes place at the retail level. Dairy Queen is sold at Every day low pricing as the price is kept low throughout the year.

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Price Discounts and Allowance CDL has used Quantity Discounts that is a price reduction to those buyers who buy larger volume; it is offered on a non cumulative basis (on each order place)

DISTRIBUTION CHANNEL: Marketing Channels These are the sets of the interdependent organizations involved in the process of making a product or service available for the use of consumption.

Channel Function and Flows A marketing channel performs the work of moving goods from producer to consumers. It overcomes the time, place and possession gaps that separate goods and services from those that need or want them. It perform number of functions  They gathering information about potential and current customer, competitors, and other actors and forces in the marketing environment.  They develop and disseminate persuasive communication to stimulate purchasing  They place an order to the company  They provide for the successive storage and movement of the physical products.

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Channel Level It is a two-level channel, CDL has its own distributors which are suppose to deliver the Dairy Queen milk to the wholesaler as well as to the retailer, through which it reach to the final buyer or consumer.

Manufacturer Direct

Indirect

channel

channel

Distributor

Direct Sales Force

Wholesaler & Retailer

Consumer

Consumer

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Multi Channel marketing system: With the proliferation of customer segments and channel possibilities , more companies have adapted multi channel marketing. CDL is using 2 marketing channels to reach different customer segments. The 2 different types of intermediaries of channels used by the company for the distribution of Dairy Queen is as follows:

Indirect channel: Company has a network of distributors and retailers who sell the milk to the final consumers. Dairy Queen has many authorized distributors throughout the country which distribute the milk to 8000 retail outlets in Karachi. Indirect channel constitutes 80% of total sales of Dairy Queen Milk.

Direct channel: CDL has several sales promotion officers in Karachi which are involved in direct sales of the milk. Direct channel can be further divided into:

Direct: The sales force distributes Dairy Queen to government offices and institutions.

Indirect: Dairy Queen Milk is distributed to teashops, offices, schools, caters, marriage halls etc by the direct sales distribution network of CDL. Direct channel constitutes of 20 % of the total sales of the Milk. In the future CDL has plans to expand the direct channel.

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ADVERTISING: Ads are cost effective way to disseminate message, build brand preference or to educate people. Most companies use an outside agency to help create advertising campaigns and select and purchase media. CDL Food Limited has contract with the agencies to develop advertising campaign. CDL Food Limited has three advertising agencies which guides the company what should be the next move and also give regarding the market and competitors. CDL has three agencies:  Orient McCann  MPL  Asiatic Advertising

1. Setting the Advertising Objectives The advertising objectives must flow from prior decisions on target market, market positioning, and marketing mix. Advertising objectives can be classified according to whether the company aims is to inform, persuade, or remind.

Informative Advertising: In the introduction stage CDL will give detailed informative advertising about Dairy Queen Milk. At this stage the advertising duration in television will be of 45 seconds.

Persuasive advertising: After getting awareness in the market, CDL will emphasize on persuasive and comparative advertising to present additional and competitive features of Dairy Queen. At this stage the media channels will remain same, but tenure in television will be shorter than before.

Reminder Advertising: At the maturity stage of Dairy Queen, CDL will give only reminder advertising to its customers that Dairy Queen exists in the market. At this stage the CDL will reduce the frequency of its ads in television and in radio and will shortlist the billboards and only at rush and potential areas.

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2. Deciding the Advertising Budget Deciding about advertising budget is a crucial decision. Following are the factors, which a company should consider: Stages in the Product Life Cycle: The advertising budget should be appropriate according to the product life cycle; it varies with the different stages i.e. introductory, growth, maturity and decline. Dairy Queen is newly launched product it will require huge advertising budget to build awareness and to gain consumer attention. Market Share and Consumer Base: High market share brands like Haleeb require less advertising to maintain market share. Usually it is perceived that higher the advertising frequency higher would be the consumer’s reaction and higher the sales. Dairy Queen will be d heavily by using radio, print media, televisions, billboard, metro buses etc to attract a large market.

Competition and culture: There are large number of competitors in the market, so in their presence, CDL has Dairy Queen heavily to counter competition.

Advertising Frequency: At initial stage of Dairy Queen in the market, repetitive advertising will be persuaded and ad will run three times in a day for 5 days a week in first three months of the re launch .

Promotional Budget Estimated promotional budget of CDL for Dairy Queen Milk: Billboards Print ads TV advertising Second phase advertising Total

62, 00,000 Rupees 30, 00,000 Rupees 20, 00,000 Rupees 40, 00,000 Rupees 152, 00,000 Rupees

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3. Choosing Advertising Message Advertising campaign vary in their creativity. The creativity factor can is more important than the number of rupees spent. Advertising goes through four stages to develop a creative strategy:

Message Generation: The product benefit message should be decided as part of developing the product concept. As Dairy Queen is milk product, it will give the nutritional, rational, sensory message to its customers, which will appeal them to buy it. “DOODH PEIGIAEY, DOODH HAZAR NEIMAT HE, GHIZIAT SE BHARPOOR, MUNASIB QEEMAT DOODH BEHTREEN DAIRY QUEEN”

Message Execution The message impact depends not only upon what is said but also on how it is said. . For executing the message there are different cohesive styles, tone, words and format.

A. Execution Style: The ment of Dairy Queen Milk will be executed with striking musical jingle, famous personality (pretty models), showing cows, buffaloes and farm houses to give a natural image.

B. Execution Tone: The executed tone of the ad will be positive and inkling towards Dairy Queen, humor will be avoided as it takes attention away from the message.

C. Execution Words: The memorable and attention-getting words will be used in the advertising of Dairy Queen Milk, (HAR DAM TAZA, BEHTREEN ZAIQA, MUNASIB QEEMAT DOODH BEHTREEN, DAIRY QUEEN……….) so that the consumers could the ad.

D. Execution Format: TV ments will use attractive color combinations (the background and presentation) with appealing musical jingle. Print ads will be using colorful pictures (Dairy Farm) with product packaging and its information.

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Selecting Specific Vehicles: The media planner must search for the most cost effective, dominant, and frequent vehicles within each chosen media type. The planner has to rely on media measurement service that provide estimate of audience size, composition, and media cost. As CDL Foods Limited is a customer-oriented company, its aim is to serve maximum number of customers. For advertising its products it has chosen advertising vehicles that are cost effective, covering large number of audience. The vehicles, which are chosen by CDL, are:

Electronic Media: The electronic media will be only Radio and Television. CDL has decided to in FM 100, FM 101, and Radio Pakistan Karachi, Ads will be aired on PTV, PTV World, Geo Television (Cable), and at ARY Gold (Cable).

Print Media: The print media used will be Newspapers (Front Quarter page), i.e. Jang, The News, Dawn, and Magazines (Quarter page) i.e. Akhbar-e-Jehan, Family magazine, Khwateen Digest, Sunday magazine.

Billboards: CDL had decided to “Dairy Queen “milk on several billboards at various locations covering the whole city.

4. Deciding on Media Timing CDL Foods Limited has decided to adversities Dairy Queen on TV thrice a day and t 5 days a week in first three months. The ad will go on air in the prime time broadcasting like Drama hours; it will also be d daily in the mid break of KHARBANAMA. Dairy Queen will also be d in the sports matches like Cricket Matches, which has a very large viewer ship.

5. Deciding on Geographical Allocation The company has to decide how to allocate its advertising budget over space as well as over time. Dairy Queen will be d on a national level on all the national radio and TV channels, national newspapers and magazines.

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