Introduction: Bangladesh is a densely populated country.

For decades, Bangladesh has a large domestic market for milk products which was largely met through importation of subsidized milk and milk products form developed countries. During 2004-2005, Bangladesh imported milk and milk products worth 300 million taka to meet a short fall of35 percent of domestic demand. The milk sector of Bangladesh has failed to provide sufficient supply for liquid milk. On an average, a Bangladeshi cow reportedly produces around 200kg of milk a year, which is 30 percent lower than an Indian cow's production figures. This low milk yield is mainly caused by poor livestock feed and low milk production of the common breeds of cattle in Bangladesh . (IFCN,TheDaily Star, 2ndDecember, 2008). To minimize this shortage government has taken some steps such as urgent meet up through imported powder milk and try to develop dairy farms to the private entrepreneurs levels. Only local dairy farm could not provide sufficient supply of liquid milk according to consumers demand. To fill up this gap there were a lot of companies launched in Bangladesh market to sale milk powder product. Diploma and Red Cow are two familiar brand names for a lot of household in rural and urban area in Bangladesh. Thesemilk powders have become convenient in Bangladesh for last 21 years due to strong marketing strategy of the company. Now, it has been sold in Bangladesh market with a current market share 21%, the market leader in the market. (See Exhibit-1) Due to expanded market, company has to adopt frequently changing marketing techniques. Last few years, marketing is playing an important role in enterprise development. After liberation, industries of milk sectors are expanded due to ever increasing population, life style, cultures and other purposes .During the last few decades a number of trading companies which is about eight in numbers entered into the milk market of Bangladesh.So, consumers of rural and urban areas have access to a number of brands milk powder in Bangladesh milk market. As a result, a strong competition has occurred among the concern companies.Each of them has individual market strategy. So, marketing strategy of all individual company is completely different. Due to advancement of technology, knowledge and people awareness, company has to change its strategy time to time.

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Company Background: New Zealand Dairy Products Bangladesh Ltd. (NZDP) was incorporated in Bangladesh in the year 1992 as an Operating Company of Fonterra Ltd, the world leader in dairy industry for representing internationally recognizable brands in Bangladesh. In the year 2004, through issuing a Licensing Agreement, Fonterra transferred the ownership of the company to few local Entrepreneurs, which exist till today. New Zealand Dairy achieved ISO 22000:2005 (Food Safety Management System) certification in 2009 as a pioneer in the Food Industry for maintaining highest level of standards in their production process. At present NZDPs business is worth an average of US$ 45 million per annum and its business operation encompasses over 400 people nationwide. The Company's priority is to bring the best and most relevant brands to people, wherever they are, & whatever their needs, throughout their lives, in other words Dairy for Life New Zealand Dairy has a rich heritage in the dairy industry in terms of quality of products and business operations. We believe in long-term partnership with our customers and our partners. We also believe in long-term investments in our key areas and product innovation. The company has also initiated CSR activities to aware the general mass about the importance of bone health in our society.

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Company Formations and Milestones: ______________________________________________________________________________ Date Events ______________________________________________________________________________ 1991 Local Agents were representing Fonterra Brands of New Zealand dairy board.Fonterra is a global, co-operatively-owned company with its roots firmly planted in New Zealand, working to unlock every drop of goodness from the 22 billion liters of milk they collect each year and sharing it with the world. New Zealand Milk Products Bangladesh Limited (NZMPB) was registered and incorporated in Dhaka. Seeing the opportunity, company started to think differently and take the decision to enter into the Bangladesh market with their own business operation. NZMPB went to production. It takes two years to set the business. New factory set up at Narayanganj and corporate office at Tejgaon makes the company to start up their business in the country. NZMP Operated under 100% Foreign Ownership.Till 2002 the company had been operated under 100% foreign ownership and then the things had changed as Fonterra issue license agreement to local entrepreneur. Company changes its name to New Zealand Products of Bangladesh Limited and started operating under 100% local ownership. The company changed its name and the ownership as local shareholders owned the full business.

1992

1994

2002

2005

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Source: Used with the permission of NZDP management.

Companys Vision, Mission and Product line: Vision: Mission: To lead in Dairy Delighting consumers through dairy products that are nutritious, innovative, and taste great Values: The following behaviors are the key to NEW ZEALAND DAIRY becoming a top FMCG Company. These criterias has been chosen on priority basis to allow us to be effective in our role, because we seek to become more innovative, more customer/consumer orientated. These behaviors are
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Fast: Focused: Forward Thinking: Objectivity:

Energetic, speed to market and innovation Customer, consumer and brand centric Building a strong business for the future

The objective of NZDP is to gain the maximum market share so that they can do a healthy oligopoly business in the market as the market demand is too high. They are focusing to maintain their quality and assuring the consumer best nutritious milk products in the industry. They keep the some of the product as a cash cow and some of the product as star. They want to stay at the top, maintaining the purity. However, they have focused on the followings: Ensuring the quality of the product Maintain the customer satisfaction Increase the Market Share Keep working with R&D to develop their products

Industry Analysis: Monthly milk consumption requirement for Bangladesh is 4782 M.Ton(Bangladesh Bureau of Statistics) in October 2011. This large milk consumption cannot be met by local production. This is why Bangladesh requires a big amount of powder milk to import every year to meet the domestic demand. Bangladesh has a deficit of 9.42 million tons of milk a year while producing about 15% of the total requirement (Ahmed 2000). But the demand for milk is much lower than the estimated amount (11.04 million tons) as the majority of people do not have adequate buying ability. According to FAO review in 2002 Bangladesh has to import 250,000 tons equivalent milk annually to satisfy its national demand. Around 90% of the total milk comes from cows and the remaining 10% from buffalo and goats (Saadullah 2002).Dano, Nido, Kwality, Marks, Starship, Fresh etc. are the major imported milk powder in Bangladesh other than New Zealand
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Dairy. Besides this there are some non-branded milk also imported mainly from China. In recent time three of the local companies come to production of powder milk in market. Milk Vita, Brack, Pran which will be given preference by the government to grow the industry in Bangladesh. "We requested local companies to invest in setting up powder milk factories they should be protected," said by Fisheries and Livestock Minister Mohammad Abdul LatifBiswas (The Daily Star,21st June, 2012) Though the local company are trying to enter in the market but it will be difficult for them to compete because there are some of the company they set up their industry in Bangladesh and started to produce milk in the country. "It will be difficult to compete with imported powdered milk," said by Kamruzzaman Kamal, director in charge of marketing of Pran-RFL Group (The Daily Star, 10thNovember, 2009). So Bangladesh still has the big dependence on imported powder milk for meet the high demand. The problem of acute shortage of milk in the nation could have been solved domestically in a couple of years if the government had ensured adequate supplies of cattle feed and developed high yielding dairy breeds, say veterinary experts. According to scientists at Bangladesh Livestock Research Institute (BLRI), "at present the country can produce 2.36 million tonnes of milk against a demand of 13.15 million tons". (The Daily Star 2ndOctober, 2011) Global food trend and Change in consumption of dairy products: The interest in ethnic food has exploded in recent years due to the growth in the Asian populations, as well as increased exposure to other cuisines through television and the internet. The Millennial generation (born between 1980 and 2000) is driving the demand for ethnic food and bolder and spicier flavors. In turn, packaged food manufacturers are spicing up their offerings to respond to consumer tastes. In Bangladesh people become more food conscious and take care of their food value. For this reason the requirement for milk and other dairy products increase drastically. Despite of the fact that milk is still for the rich people, majority of the people tries to include mild in their daily food. Drinking cows milk is like taking a liquid nutritional supplement. Its a concentrated source of calcium and a rich source of protein, riboflavin, potassium, vitamin B12, and other vitamins and minerals. Its the perfect food for transforming a 75-pound calf into a half-ton cow in a matter of months. Perhaps as a result, although cows milk is meant for cows, humans have claimed it as a dietary pillar for

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generations. According to Dr. AK FazlulHaqueBhuiyan, drinking a glass of milk helps your child to grow better. (The Daily Star 2ndOctober, 2011)

Operational Structure (Organogram):

Figure:1 Operational Structure Marketing: Marketing department is mainly divided into two categories, kids and adults. Major function are taking care of market operation, attentions, action and branding. There are other two categories has been started functioning, Food and Nutrition. Basically NZDP is planning to introduce Cornflakes and Noodles in the market. These two department is working for their new product implementation.

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Sales and Distribution Channel: New Zealand Dairy Products Bangladesh Limited, since its inception in Bangladesh, has been trying to create and maximize an effective distribution network countrywide. Currently company has around 140 distributors, who are covering the whole countrywide distribution channel(See Exhibit-3). Under each distributor there are outlets that are effectively supervised in a regular basis. This distribution channel covers all divisional headquarters. Under each divisional head quarter there are appointed sales force that collect orders and make sure that the required SKUs are in place in time. In the past two years, NZDP has taken major decisions regarding redesign of distribution network. Emphases were given towards Distributors Profit, Sales Coverage and at the same time implementing companys goal. And there is a positive result as the company successfully reaches to its customer through the channels. Distribution flow chart of New Zealand Dairy:

Marketing Department

Distributor Wholesaler Retailer

Consumer

As a matter of fact, the smaller distributors have been replaced with larger distributors who has increased their investments with us, developed their infrastructure, increased their number of vehicles, which has sales have increased, even the number of distributors have fallen.
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In 2011 compare to 2009 the distribution has been changed as there is a decrease in Dhaka Division and all other Division there is gradual increase (See Exhibit 4).NZDP has already taken up massive investment towards developing the distribution network further. NZDP has already taken initiatives to introduce new technology towards developing DMS (Distribution Management System) which will give them a leading edge in Foods distribution and coverage management. Company Strategy: In line with its overall business plan for the financial year, the company expects to maintain cumulative growth in sales over the previous year in the next quarter as well. The company remains committed to provide satisfaction at a competitive cost, grows in diversity, and continues to contribute to the growth of industrialization in Bangladesh by being the market leader, as said by Mr. FazleyHossein Director NZDP.

Corporate Social Responsibility: As NZDP is one of the most prominent FMCG Company they exercise some CSR as they think they have some responsibility towards the people of the country. It is our duty to the people to make them conscious about their health condition and make them aware about Osteoporosis as Mr. KamrulHasan, Manger marketing, said in interview before the program. Bone Health checked by New Zealand Dairy Bone health check program: Anlene bone health check is an international initiative that has provided free bone scans more that millions of people across Asia-Pacific. Anlene bone health check programme, in partnership with GE Healthcare, is expected to assist in generating significant awareness about bone health. Through the Bone Health Report, we hope to create a critical mass of informed people, as well as medical experts, who will help champion our cause against Osteoporosis.

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Poor bone health is a silent menace that has afflicted millions around the globe, and the alarming number of people affected by the disease in Asian countries prompted us to support the Bone Health Reports and launch the Anlene Bone Health Check programme in Bangladesh. Bone scanning programme by New Zealand Dairy Products Bangladesh Ltd. aims to assist in ensuring people in Bangladesh taking preventive measures to protect their bone health. We are happy to be able to now provide free service to people in this part of world. As part of this activity, New Zealand Dairy Products Bangladesh Ltd. initiated activities at schools where trained personnel are deployed to run the bone scanning operation along with Nutritionists to provide free counseling to the audiences. Bone health check program is a part of CSR activities of NZDP. Quality Heritage: Product quality is the characteristics of a product or service the bear on its ability to satisfy stated or implied customer need. (Kotler,2010 p-196). At NZDP, quality is the cornerstone of everything they do. To NZDP, quality means doing the very best for customers & constantly searching for customers & constantly searching for new ways to do it better. ISO 9001 forms the basis of their quality management system. This international standard certifies that NZDPs quality system meets the highest standards of consistency & responsiveness at every step. ISO 9001 registration requires regular review & evaluation, at every level from strategy to detailed procedure, to ensure they are meeting for quality targets. NZDP also operate a rigorous system of audits & inspections. For example, critical control points in manufacturing & processing are regularly tested. The laboratories that perform the testing are all register under ISO/IEC 170-25:1999, which sets the general requirements for the competence of testing & calibration laboratories, to ensure accuracy &validity.Beyond this certification discipline, company operates a global, company-wide Quality Improvement Opportunity program. Through this, NZDP office has cultivated a dedication to proactive quality management & a careful approach to documentation & analysis. All this attitudes is essentially directed towards gaining the quality that the company promised to the customers. NZDP is focusing the quality which the customers will appreciate them and thus company fulfills the promise.

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Major Potencies for NZDP: In the major strength, first comes the quality. As this company imports its raw materials from New Zealand, it has able to maintain its best quality and nutrition.In Bangladesh, The products of NZDP have some very strong brands like Diploma, Red Cow and Anchor. These brands are almost generic to their product categories and the company is able to maintain that brand equity. The Company has been continuously developing its products for Bangladeshi patrons on a frequent basis and also thinking of expanding its product offerings. It has a well establish distribution channels, by which it has reached all the distributors by its own cars as well as sells team.As this company has run by its own distribution channels and maintains a tight control as well as it has its own high-tech maintained factories thus it able to maintain a low cost operational system. Some Key Problems and Concerns: The Company imports raw materials at 2,571 m at the end of 2009-10. This constitutes a big chunk of the total imports from a single location to maintain its quality. Though, its overall performance takes a hit often due to this factor. Government of Bangladesh is planning to impose high VAT and TAX on imported milk powder. I have already requested the Finance Minister for discouraging the import of powdered milk by imposing taxes, said by Fisheries and Livestock minister Abdul Latif Biswas. (The Daily Star 18thSeptember, 2012). There are also some internal problems for NZDP. The Company has a complex supply chain management. The FMCG industry requires high standards of hygiene, quality of edible inputs and personnel.Its distribution channels could not able to distribute its all sort of product and product mix in all sells point. There are some concerns which are becoming difficult for the company for operation. First of all he Company faces immense competition from the organized as well as the unorganized sectors. Off late, to liberalize its trade and investment policies to enable the country to better function in the globalized economy, the Bangladeshi Government has increased the TAX and VAT to save the local industry(The Daily Star 18th September, 2012) thus intensifying the battle.Trend of increased consumer spends on consumer durables resulting in lower spending on FMCG products. In the past 2-3 years, the performance of the FMCG sector has been lackluster, despite the economy growing at a decent pace. Although, off late the situation has been improving, the
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dependence on monsoon is very high. Finally rising prices of raw materials and fuels, and in turn, increasing packaging and manufacturing costs. The Success Story: NZDP has grown remarkably in the last two years. It has overridden the industry growth of annual 16% and has substantially grown. In this period NZDP has launched one new brand FARMLAND GOLD in this tenure, contributing 500 MT annual sales in 2011.In line with its overall business plan for the financial year, the company expects to maintain cumulative growth in sales over the previous year in the next quarter as well. The company remains committed to provide satisfaction at a competitive cost, grows in diversity, and continues to contribute to the growth of industrialization in Bangladesh by being the market leader. In 2009 the sales volume was 3411.75 metric ton and in 2010 it was 4041.8. The major growth was in 2011, which is 5574.09 metric ton and 64 % growth in sales. All this data shows the customer satisfaction that NZDP targets for their development and become the market leader. Year Sales Volume (in Metric Ton) 2009 2010 2011 3411.75 4041.8 5574.09

Source: Internal Database, NZDP Future Direction: The Company has the potential to expand to smaller towns and as well as its product lines. FMCG industry is likely to grow in the country, so it would be a great opportunities for NZDP. For weight concerned consumers offering new product like skim (low fat) milk and high calorie milk. So that it can grab more premium consumer with new product line.New product line will be implemented soon in the market. They are corn flakes and noodles. Because of the huge reputation in the market investors are willing to invest in this company that could make the growth further more in future.

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