KDL Foods Limited (formerly Kool Dairies Limited)

Marketing Plan

Mahreen Gul MBA-13209

Amna Kamran MBA-13212

Moona Khadim MBA-13202

Zeeshan Azam MBA-13222

Ahsan Mehmood MBA-13204

Sohaib Sadiq MBA-13206

SUPERIOR UNIVERSITY LAHORE

1. Business Overview

Mission statement

“Build branded food business to improve quality of life by offering tasty, affordable and highly nutritional products to our consumers while maximizing shareholders value”.

Vision statement

“Most innovative and fastest growing food company offering products enjoyed in every home every day”.

Core values

1. Team work2. Empowerment3. Trust

2. Market Analysis of Malaysia and Russia

Economic figures of Malaysia

Details Malaysia RussiaCurrency Ringgit (RM) Russian rubleExchange rates ringgits (MYR) per US dollar -

3.07 (2012 est.)3.06 (2011 est.)3.22 (2010 est.)3.52 (2009)3.33 (2008)

Russian rubles (RUB) per US dollar -31.32 (2012 est.)29.382 (2011 est.)30.368 (2010 est.)31.74 (2009)24.853 (2008)

GDP (purchasing power parity

$492 billion (2012 est.)$471.2 billion (2011 est.)$448.4 billion (2010 est.)note: data are in 2012 US dollars

$2.509 trillion (2012 est.)$2.422 trillion (2011 est.)$2.322 trillion (2010 est.)note: data are in 2012 US dollar

GDP (official exchange rate)

$307.2 billion (2012 est.) $1.954 trillion (2012 est.)

GDP - real growth rate 4.4% (2012 est.)5.1% (2011 est.)7.2% (2010 est.)

3.6% (2012 est.)4.3% (2011)4.3% (2010)

GDP - per capita (PPP) $16,900 (2012 est.)$16,500 (2011 est.)$15,900 (2010 est.)

$17,700 (2012 est.)$17,000 (2011 est.)$16,300 (2010 est.)

note: data are in 2012 US dollars note: data are in 2012 US dollars

GDP - composition by sector

agriculture: 11.9%industry: 41.2%services: 46.8% (2012 est.)

agriculture: 4.4%industry: 37.6%services: 58% (2012 est.)

Labor force 12.84 million (2012 est.) 75.24 million (2012 est.)Budget revenues: $59.22 billion

expenditures: $75.31 billion (2012 est.)

revenues: $413 billionexpenditures: $414 billion (2012 est.)

GDP - real growth rate 4.4% (2012 est.) 5.1% (2011 est.) 7.2% (2010 est.)

3.6% (2012 est.) 4.3% (2011) 4.3% (2010)

Inflation rate 1.9% (2012 est.) 3.2% (2011 est.)

 5.3% (2012 est.) 8.4% (2011 est.)

Exports RM513.59 billion (Jan- Sep 2011)

Exports from Russia amounted to US$524.6 billion in 2012, up 12.1% since 2008. Russia’s top 10 exports accounted for 86.8% of the overall value of its global shipments.

Exports - commodities Crude petroleum – A$994mEducation-related travel – A$739mCopper – A$710mPersonal travel excl. education – A$431mCoal – A$356m

Mineral fuels including oil: $375,423,947,000 (71.6% of total exports)Iron and steel: $22,601,664,000 (4.3%)Fertilizers: $11,176,846,000 (2.1%)Inorganic chemicals: $7,835,699,000 (1.5%)Machinery: $7,609,061,000 (1.5%)

Exports – partners Singapore 13.3%, China 12.5%, Japan 10.5%, USA 9.5%, Thailand 5.3%, Hong Kong 5.1%, Germany: 2.7%

Netherlands 12.2%, China 6.4%, Italy 5.6%, Germany 4.6%, Poland 4.2%

Imports RM424.37billion (Jan – Sep 2011)

$358.1 billion

Imports - commodities Crude petroleum – A$3,668mTransport – A$646mMonitors, projectors & TVs – A$568mComputers – A$554mRefined petroleum – A$535m

Machinery, equipment and transport means: 47.7%.Chemical products, rubber: 15.8%.Foodstuffs and agricultural raw materials (excluding textile): 15.7%

Imports - partners Japan 12.6%, China 12.6%, Singapore 11.4%, USA 10.6%, Thailand 6.2%, Germany 4.0%

China 15.5%, Germany 10%, Ukraine 6.6%, Italy 4.3%

Unemployment rate 3.0% 6.2%

Average wage Malaysia’s average salary currently stands at 11,000 RM

Russia’s average salary currently stands at 23,600 rubles

Population below poverty line

3.8% 13.1%

Food Industrial Analysis

Malaysia: Malaysia’s food industry is rich in terms of tropical and agricultural resources reflecting diverse cultures in Malaysian society Malay, Chinese and Indian, have resulted in a fascinating range of processed food with an Asian twist. Increasing consumer awareness in nutrition value and food fortification for healthcare has created the demand for functional/healthy minimally processed fresh food, organic food and natural food flavors from plants and seafood.The Malaysian food and beverage market is becoming increasingly sophisticated and is supplied by both local and imported products. The strong economic growth in the late 80's and early 90's contributed to major changes in consumer purchases and consumption patterns. Malaysians living in urban areas are relatively brand conscious, and they prefer to shop in stores, which offer them convenience and good product selections. Lifestyle changes have led to an increase in the demand for convenience food and health food.The food processing industry is predominantly Malaysian-owned. In Malaysia, the food industry is dominated by small and medium scale companies. The major sub-sectors are the fish and fish products, livestock and livestock products, fruits, vegetables and cocoa.In line with the government’s emphasis on the agriculture sector, the processed food and beverages industry had become an important component of the agro-based industry. In 2010, the food processing industry contributed about 10% of the Malaysian manufacturing output attracted a total of RM1.972 billion in 69 projects. Employment in the processed food and beverages industry decreased in 2009 by 5.1% to 43,080 compared with 45,418 in 2008. Labor cost for the industry remained competitive, as its Unit Labor Cost decreased by 8.2%, reflecting an efficient utilization and management of resources. Small and medium sized enterprises represent more than 80% of the total number of establishments in the processed food segment.Malaysia is also one of the world major producers of spices. In 2010, Malaysia ranked as the sixth largest producer of pepper and pepper-related products (specialty pepper, processed pepper and pepper sauces).The Malaysian livestock industry is an important and integral component of the agricultural sector, providing gainful employment and producing useful animal protein food for the population. It contributes about 18 percent to the total Food Sector Agriculture Value Added and export earnings (NAP, 1998). The gross output value of livestock in 1999 was RM5.2 billion (DVS, 1999 [RM3.8/US$ at 5 July 2002]). The industry can be classified into the non-ruminant and the ruminant sub-

sectors. It has shown a steady growth over the years attributed mainly to the active participation of the private sector, particularly in the sub-sectors of poultry, eggs and pork. Within a relatively short period of time the pig and poultry industries have been able to transform themselves from backyard subsistence levels to highly modern, commercial and efficient production systems.

Russia: Livestock herds decreased drastically during the 1990s, with the number of cattle and pigs dropping by about 52% and 55% respectively between 1990 and 2000. As a result, Russia became a large meat importer during the 1990s (cf. Liefert et al., 2009). When the Russian agricultural output began to rebound during the 2000s, also the livestock sector was expanding. However, while especially poultry production increased considerably, beef production continued to decline. In recent years, positive trends have been noted in the dairy sector in the Russian Federation. The national average milk production rose 60 percent, from 2.2 tonnes in 1997 to 3.5 tonnes in 2007. Regions of intensive production have emerged in the Northwest and Central federal okrugs, which are near centres of industrial milk processing around Moscow and St. Petersburg. These regions are characterized not only by high yields per cow but also by increasing production volumes. There has also been significant progress in smoothing out the seasonality of milk production, which has been completely overcome in some regions, in particular in the Leningrad Oblast, Moscow Oblast, Altai Krai, Krasnodar Krai and in the Republic of Tatarstan, and Bashkortostan. Both private and public investments in the sector have increased, enabling the creation of large dairy farms with modern technology. Against a background of increasing consumer demand, the milk processing industry has developed rapidly.The high seasonality of milk production has been a problem for dairy farms since Soviet times. Shortages of milk in autumn and winter followed by surpluses of milk in the summer caused fluctuations in market prices.New federal technical regulation for milk and dairy products took effect at the end of 2008. These regulations set requirements for milk and dairy products to ensure that production, storage, transportation, points of sale and utilization of dairy products are safe. They also introduced new technology for the dairy sector, as well as packaging and labelling standards for milk and dairy products.

Livestock sector of Malaysia

Table 1

Livestock Population

Livestock sector of Russia

Table 2

Livestock Population

3. Opportunity analysis

Malaysia is interested in Pakistani live stocks

ISLAMABAD, March 30 (APP) - Pakistan and Malaysia on Wednesday launched Pakistan-Malaysia Joint Business Council (JBC) in Kuala Lumpur.Datuk Mukhriz Bin Tun Mahathir,the Malaysian Deputy Minister of Ministry of International Trade and Investment and Saleem H. Mandviwalla, Chairman Board of Investment of Pakistan launched the Council, said a press release received here from Kuala Lumpur.

The JBC launching ceremony was attended by Pakistan High Commissioner in Malaysia, Masood Khalid, Syed Ahmad Hussain Shah, Minister for Commerce and Industry, Government of Khyber Pakhtoonkhawa, Mohammad Zubair Motiwala, Advisor to Chief Minister Sindh on Investment, Dato Mohammad Salim Fateh Din, Chairman of Malaysia Pakistan Joint Business Council, Saadat Muzaffar, CEO, Punjab BOI & Trade, Zubair Habib, CEO National Industrial Park (NIP), Syed Asghar Abbas Rizvi, Director General BOI, Syed Feroz Shah, Advisor, BOI and President, National Chamber of Commerce and Industry Malaysia (NCCIM), the representatives of private sector of government official of Malaysia. (Friday, 30 Nov 2012)

4. Market highlights

Malaysia (Population: 23.5 million) was one of the first Asian economies to return to

growth after the onset of the Asian currency and economic crisis of 1997/98. It reported

economic growth of 5.8% in 1999. Local analysts forecast that the economy should grow

by between 7.5% and 8.5% in 2000. Today, it is the third wealthiest country in Southeast

Asia after Singapore and Brunei. Malaysia has one of the most sophisticated consumer

markets in South East Asia. Unlike the other large Southeast Asian nations, e.g.

Indonesia, Thailand and the Philippines, Malaysia has a nation-wide consumer base that

encompasses both urban and provincial/rural areas. Middle to upper income group of

consumers comprise about 61% of the population or 14 million persons in 2000. These

persons are key targets for the full range of dairy products that are in the market today.

5. Market orientation

Customer focus

The company is committed to strict quality standards in all its operations - from the collection of milk to the provision of hygienically processed nutritious products to its customers. The company follows the philosophy of "delighting the customers" by providing them quality products at the right price on their door step.

The company treats them as partners Keep channel of communication open with them because they are the only reliable

source that can provide them best feedback about the product.

6. Segmentation Variables

Geographic

Region: Malaysia

Density: Urban

Demographic

Age: Above 4 years

Income:

Maximum: 52,500 MYR

Average: 7,449 MYR

Median: 5,200 MYR

Minimum: 910 MYR

Social Class: Lower middle Class, Middle upper class, Middle -Middle class.

Psychographics

Activities: Health related, education, Convenience

Interest: outdoors, Active, sports, fashion, family values

Opinion: Social concern

7. SITUATION ANALYSIS

The marketing environment for KDL foods Ltd. represents overwhelming opportunities. It also contains some challenges that the firm believes it can meet successfully. SWOT analysis of the company conducted by marketers to highlight Blue Sky’s strengths, weaknesses, opportunities, and threats

SWOT Analysis

Strength:

International packaging Affordable and reasonable price Have our own packaging plant

Weaknesses:

Heavy capital will be required for promotion Consumers are brand loyal toward competitor’s product so we have to convince

them.Opportunities:

Increase usage Can introduce flavored milk People are switching from unhygienic to hygienic milk

Threats:

Competitors can come up with plastic bottles

Competition Analysis

Competitive Framework

Company

Name

Product Name Category Product Class Overall

Market Share

Nestle

NAN Grow Powder Pouch Pak

Nestle brand

holding 50%

of national

market share

NESPRAY

Omega Plus

Powder

Powder

Pouch Pak

Pouch Pak

Everyday Powder Pouch Pak

Dutch

Lady Milk

Dutch Lady

Pasteurized Milk

Dutch Lady

Yoghurt

Pasteurized Milk

ready-to-eat

yoghurt and

yoghurt drinks

Tetra Pak

Packing

Dutch Lady

brand holding

40% of

national

market shareDutch Lady

Chocolate Drink

Flavored P. Milk Tetra Pak

Dutch Lady

Sterilized Milk

Sterilized Milk Tetra Pak

8. Buyer Analysis

For KDL brand the buyer profile comprise of lower middle, Upper and Upper Middle class individuals having the exposure of international countries with awareness of product freshness i.e. bottled milk. The main focus is on health, taste and the price factor.

Product Market

Dealing in packages dairy products with main area of concentration in packaged milk products that include Processed, Condensed and Instant formulations.

Sooper Milk Chocolates Tropical fruits drink Dairy queen milk powder, Anchor milk, Asli ghee

9. Targeting & Positioning Strategies

The targeting strategy for SOOPER is recommended to be Selective due to the following market and industry dynamics which are as follows;

Stage of the product Life CycleThe Dairy Industry of Malaysia is growing at a steady and consistent manner at 15% per year. The industry attractiveness is fairly high for SOOPER and opportunity to develop strong business within the segment.

Diversity of PreferencesConsumer awareness for the health factor is on the rise due to media exposure and education within certain segments. With shifts in priorities for hygienic consumption and family health concerns increasing, packaged brands of milk are increasing for various consumption usages of milk.

Industry StructureCompetitive intensity is not as high and entry barriers are quite high. With the process being a highly complex and delicate matter which can cause tremendous financial crunch to medium sized organization.

Competitive AdvantageIn the packaged milk category, the competitive advantage that can be obtained is through effective distribution and consistent marketing communications.

Target Strategy

Targeting approaches for developing SOOPER brand is Selective Targeting since the

industry is growing at a rapid pace and since the product portfolio is fairly diversified

creating;

POSITIONING STRATEGY

Positioning Statement:

MAKE YOU HEALTHY

“Struggling business to enhance brand image of SOOPER as a daily routine, nutritional diet for the entire family.”

Positioning Concept

Trying to create the perception that milk is healthy and is a quality habit that should be a part of all family members, giving them nutrition, satisfaction and happiness that tastes good.

Positioning Strategy

Shelved in A, B and C category retail outlets to create favorable brand associations

Price is at RM.34/- that signals that quality is consistent in a new packaging

Advertising and sales promotions to be focused according to the quality and fun

drinking association of SOOPER as a health assuring milk

Positioning Effectiveness

The objective is to monitor and evaluate how the positioning of SOOPER is received

by the target market and according to what the core values of the SOOPER brand

communicate.

PRODUCT STRATEGIES

The product strategy we are following is Product line strategy. In this further we are

using “product improvement strategy”. We are improving product through

1. Taste: Delicious

2. Nutritional value – Added enriched vitamins and Zinc [fatty acids] with iron for

supplementing healthy growth. Milk for growth, enriched with zinc, vitamins,

essential fatty acids and, above all, iron, with content 25 times higher than

conventional milk. This is a decisive advantage when you know that 70% of babies

have an iron deficiency. With half a litre of SOOPER every day, children will get

65% of the iron and 80% of the calcium they need. We will launch a campaign in

Schools. Sticking Posters on Walls near schools and providing refrigeration having

Candia milk using cartoon character Garfield.

3. Design: (Brick packaging)

4. New Flip top cap

This will give us a competitive edge and mover advantage because currently fewer

companies in Malaysia are offering Flip top cap facility which ensures freshness and

hygiene.

BRANDING STRATEGY

We are using “Specific product branding” strategy because brand name gives a

unique identification in the market place, Using SOOPER tea whitener name gives

positive associations to customers that this product is used by us and we have a trust on

this name so using this product also enhance the product image and corporate brand

identity.

DISTRIBUTION STRATEGY

We are using conventional channel for the distribution. We have 4 main distributors in Lahore. Distribution intensity is “selective”. Currently the company is covering 1000-1200 outlets. It is intended that the distribution will be the same which is exclusively carrying the product to the retail outlets. There would be dedicated shelf spacing to maintain the SKU (stop keeping units) for example providing refrigeration and exclusively designed POP’s according to specifications as per the brand image and requirements. We are providing SOOPER to A, B and C class stores. The reason why we have chosen this strategy is due to financial considerations. Profit for the distributors is 1.25%. Distributors pay cash in advance to the company to get the product. (We are using all the products supplied by these distributors).

PRICING STRATEGY

Pricing Objectives

1. Gain market position (Acceptance by the consumers)

2. Influence competition

We are using “price penetration” because if we analyze the packed milk competitors like

Milk Pak and Milk flow their prices are higher. We are maintaining the same price by

offering more added features, which give us a competitive edge. Added features include more

added values as well as flip top cap.

The other considerations also include the Non price factor. Buyers are willing to pay

more prices to gain other competitive advantage, so taking this into considerations we

have included new nutritional elements as well as new flip top cap to maintain the

quality and freshness of the SOOPER MILK. We are giving added value to our

customers as the company has promised to provide quality products with

differentiation.

10.Marketing mix

Product

High quality and convenience product Packaging Packaging or bottle is reusable

Price

Price is less than competitor Using market penetration

Promotion

To enhance awareness We do promotion on TV channels and newspapers

Place

We give incentives to retailers

Items Price

Sooper Milk MYR 35/-

Chocolate MYR 15/-

Tropical fruit drink MYR 25/-

Sooper powder milk, Asli ghee MYR 45/-

11.PROMOTION, ADVERTISING, SALES PROMOTION STRATEGIES

Our advertising and promotion strategies is based on three phases

Promotion

We will use Pop’s in which all the KDL brands are available. (Special Shelves for

KDL). This will give a unique identity to the corporate name and to products.

Live for yourself! (Advertising Campaign)

We have decided to devote a special issue to milk, it's because day after day we're

reminded of its many benefits. It helps prevent osteoporosis, especially if it's drunk

very early in life; and it is the ideal way of getting the vitamins, minerals, trace

elements and essential fatty acids we need to avoid nutritional deficiency.

Not to mention the numerous nutritional properties that make milk a basic food for the

infant and an ideal food for the adolescent, the pregnant or nursing mother and so on.

Creating the Awareness, educating the consumers providing information about

product benefits and what are the diseases caused by lack of consuming

milk.

Increase Usage, advertising campaign based on situation, fun, enjoy and health.

1. Below the line activities (BTL)2. Brand line extension (targeting kids)3. Co-branding with Dunkin Donuts4. Co-branding with LU biscuits

In short, we all need milk, whatever age we happen to be. Milk has always played an

important part in our diet.

1. Milk and children

2. Milk and women

3. Milk and older people

In the 2nd phase

We will also focus on different usage situation like at playing sports, at hospitals. We

will also target kids having SOOPER milk having fun and enjoy. We will launch a

campaign in Schools. Sticking Posters on Walls near schools and providing

refrigeration having SOOPER milk using cartoon character Garfield.

In the 3rd Phase

We will go for co-branding with companies like Dunkin Donuts, using anchor tea

whitener in their products. Promotion schemes will be used with the help of LU

biscuits providing free tricky pack LU biscuits on purchase of tea whitener. We will

also celebrate different occasions and will provide different gift packs.

Launching Plan

We are going to launch our product SOOPER MILK in August 2013 with the help of

spectaculars, buntings, streamers, hoardings, mobilers at different places.

Next advertising plan

In the months of Sep, Oct, Nov

Cable network and websites

Fro the month of Dec, Jan

We will again advertise through buntings, streamers, mobilers at different outlets

For the month of Feb, Mar

We will advertise through print media

For the month of April

We advertise through spectacular at same places.

For the month of May

We will advertise through cable network again

For the month of June

We will advertise through bus stop

TV advertising will be 2 times in a day and 4 days a week in first three months. Our

ad will go on air in the prime time broadcasting. In the first phase we will have print

ads in newspapers