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P
Paaggee
Then comes the most important portion of the company’s
operations, which is the strategic management of marketing mix I-e 4Ps.
A comprehensive detail is provided about the company’s strategies
devised to maintain and develop the product line (juices), strategies to
set and quote the prices, their distribution patterns and logistics. The
image Haleeb wants to develop in the minds of their customer and the
extent to which they are succeeded through their promotional
campaigns is explained in this report.
Haleeb Foods has built yet another plant in Rahim Yar Khan whose
purpose is to provide Haleeb’s quality products to maximum number of
consumers. And a plan to extend their product line in case of juices and
has an intention to introduce new flavors of pure juices, nectars and
juice drinks.
Introduction of HFL:
HFL is now one of the fastest growing packaged food companies in
Pakistan with an annual turnover of Rs. 9.2 Billion (F2006). It is a
private limited company. It started commercial production in July 1987.
Due to consistently superior performance, it has achieved undisputed
leadership in the liquid packaged milk category with a market share of
over 52%. HFL has a very strong brand portfolio consisting of dairy as
well as non-dairy products.
Haleeb Foods has segmented its product portfolio in 3 leading brands
including Haleeb, Candia and Tropico. Haleeb is the flagship brand of
the company. Haleeb UHT Milk is available in 5 Sku’s of Tetrapak
packaging. Due to its strong positioning of the thickest milk for best tea,
it has the highest top of mind awareness and penetration in the dairy
industry of Pakistan. In order to increase consumer and trade
penetration of the brand, it is also available in Tetra Fino Packaging
under the brand extension of Haleeb Dairy Queen.
Haleeb has also progressively diversified from UHT Milk to other
product categories as well. These product line extensions include Haleeb
Butter, Haleeb Yogurt, Haleeb Cream, Haleeb Labban (Drinking
Yogurt), Haleeb Asli Desi ghee (Butter Oil), Haleeb Funday Juice Drink,
Haleeb Skimz (skimmed milk), Haleeb N'Rish Full Cream Milk Powder &
Haleeb Good day Pure Juices. Haleeb Good day is the only range of
100% pure juices in the country with a variety of 6 pure juice flavors.
Haleeb Foods, having a Franchise agreement with Cadillac France,
launched Candia Double Sterilized Milk in bottle format in April
1999. Candia is also available in the Candia Classic variant which is
positioned for Tea. Another recent initiative is Candia Candy Up,
which is flavored milk for children.
HFL has one of the largest nation-wide distribution networks
delivering high quality products, even in the remote areas of Pakistan.
With a network of + 1100 distributors the company ensures that the
product range is available in all the urban and semi urban areas of
Pakistan. Furthermore, concerted efforts are being made to develop
the rural market as well.
HFL has an efficient and resourceful Export department, which has
successfully tapped opportunities in foreign markets including
Korea, Hong Kong, USA, UK, China, Afghanistan, Bangladesh and
the Middle East.
In order to provide best quality products to its consumers, HFL has a
well-developed supply chain infrastructure. It has heavily invested in a
vast network of company operated milk collection centers across the
country. HFL has a strict and stringent quality policy regarding intake
of raw milk. It is the only company that conducts 21 rigorous quality
tests to ensure that only fresh milk of the highest quality is accepted at
the plant premises. These internationally recognized tests are used to
check for: a) adulteration, b) microbiological contamination and c)
adequacy of nutritional contents. Further, Haleeb Foods is the only
food company in Pakistan that has the following international
certifications of quality and prestige:
~ •HACCP (in process controls for safer products)
History:
Haleeb Foods Ltd. was incorporated on July 1st,
1984 with a
capital of Rs. 46 Million under the name of Chaudhry Dairies Limited which was
renamed as CDL Foods Limited and now it is known to be as Haleeb Foods Limited.
At that time it had the capacity of producing 80,000 / liters of milk per day having
total area of 32 acres. Initially 150 people were employed at the plant. The production
process started with UHT liquid milk. The liquid milk was the first product launched
in the market, it started its operation in 1985 at that time 20 other dairy plants were
also coming in, and all those including MILKPAK were using obsolete technology
that was used in EUROPE. Haleeb Plant was the only plant based on the latest
technology and the basic idea behind that were particularly dairy foods products.
From November 1989 till December 1991 Haleeb had a joint venture with fries
land Frico Domo of Netherlands. This joint was amicably dissolved on account
of FFD's change in
management in their global strategy. Today as an ISO 9002 certified company, Haleeb is the
Franchise agreement with Canada, a market leader in the liquid milk market in France, was
assigned in December 1998. Under this arrangement, the company launched Candia range
of value added liquid milk product and also have assess to latest production, technical
and marketing know how. Initially company launched different products but some
of them could not become successful. As the company's core concern is quality
eventually company abandoned products that were not according to the market
needs. In 2002 the company contributed 54% to the country 's packed milk market.
Haleeb Foods was established in 1986 as a private limited company and its first
product was Haleeb milk. Since then, it has continued to provide quality
products to its consumers with product and packaging innovations. Other
products and their dates of launch are as follows
Ye ar of L au nc h of the Pro du c ts:
Board of Directors:
Chairman:
Managing Director:
Mr. Israr Ahmed
Auditors:
Hameed Chaudhry and company
(Chaudhry Accountants)
Legal Advisor:
Hassan and Hassan Advocates
Marketing Research:
Aftab Associates
Advertising Agency:
Paragon Evernew Concepts
Market Share:
Area:
The total premises area of Haleeb foods Rahim Yar Khan Factory is
about 72 acres. Plant & offices are situated at 20 acres. The remaining 52
acres are vacant and for expentation purpose.
Distribution Channels:
Good Milk
Head Office:
Olpers Shehzan
135 ferozpur road Lahore 5460 Pakistan
Phone +92 42 111 135 135
Regional Offices:
Lahore,
Rawalpindi,
Karachi,
Peshawar,
Quetta,
Rahim Yar Khan, Dubai.
Location of Factory:
There are two plants of Haleeb foods
International Certification:
Haleeb Foods is the only food company in Pakistan that has the
following international certifications of quality and prestige:
HACCP (in process controls for safer products)
Haleeb’s Policy:
nzeela Rafiq
hj
(Asif Habib)
Economic forces
Scenario
Rate of risk:
There are following barriers of entry for new entrant foe juices in
market.
supplier.
but this does not directly influence the trends and spending patterns of the customers. There are
no restrictions or barriers on the growth of this industry. So the political conditions are
favorable fir this market because food and dairy chain products are consumer goods and they
ECONOMICAL CONDITIONS:
The economical conditions are not very favorable and the economy is facing problems, but it
is nit directly influencing buying power of consumers. If the country is out of its current
problems, it will further boost up growth of this industry, as people will feel more secure
economically and it will further increase the attractiveness of the market.
SOCIAL CONDITIONS:
The social patterns are changing in the country, as the world is becoming a global village, and mutually
share and accept patterns. People are becoming more attractive towards the branded
products. It is becoming fashion and young generations as well as the children are getting more
attracted towards this industry. People are moving towards branded food / dairy products due to
hygienic reason.
TECHNOLOGICAL CONDITIONS:
High technology is the basic requirement of dairy and food industry. The companies that
are using latest technology have some cost benefits over the companies, which are not
using high technology. The key to survival for companies in this industry is using high
technology for quality and cost purposes.
SWOT Analysis
Strengths:
~ Haleeb Food's products enjoy strong brand image and market pull.
~ Sales force is the major resource strength in terms of physical resources of the
company.
~ Marketing strategies established by the company are innovative and lure customers.
Financial, marketing and sales strategies are formulated by gauging the customer
demands.
~ Periodic research carried out to judge market
~
•
~ Qualified work force.
Weakness:
L
Less product awareness in customer mind.
Packaging of juices product is not good, and not so much attractive.
P
Haleeb company has very high prices in pure juices like apple, pineapple,
mix fruit, red grapes mango flavor.
m
Haleeb Company conducts less promotional activities for its juice
p
products.
Less display centers use for juices products in main shops of different
c
cities.
Haleeb Foods Company has late recovery of claims.
H
R
Relatively a small and local company in comparison to its rivals.
~D
Dependence on 3rd party for supply of milk.
N
No credit sales.
~L
Low sales margins due to highly value added products.
They cannot launch many of its expensive international brands due to the lower
iincome groups.
S
Selective investment due to uncertain economic and political conditions.
The packing line installed for N'Rish has a higher capacity than the actual demand
o
of the product, resulting in higher overhead costs for the product.
~I
Inadequate marketing.
~L
Low promotional activities.
T
There are a lot of untapped markets in different areas of Pakistan.
The concentric diversification in different juices products.
T
Backward integration can use in juice products of Haleeb Company.
B
Haleeb Foods Company can become multinational and can target
different market of different countries.
d
Pakistan is the seventh largest producer of milk in the world with annual output of over 22
b
billion liters.
There are substantial growth opportunities considering the average yield of Pakistani
animals at only 1,100 liters/annum as compared to 6,000 liters/annum for animals in
Europe and USA. There are nearly 20 million milk producing animals in the country,
mostly in Punjab (80%).
•The overallmilk market in Pakistan is 20 billion liters, out of which processed milk •
contributes only 3 million liters. Haleeb Foods along with other processed milk
business contribute only 2% to this large market.
b
Haleeb Foods' has expanded its product range by launching milk in Tetra Fino
P
Packaging.
CDL has been changed to HFL, so this change in name can help them to attract foreign
c
customers.
HFL can go for related diversifications by producing pure juices and flavored yogurt.
HFL can go for joint venture with other companies to attract the market share.
H
Entering in to the market of baby cereals, which will help them in increasing their
revenue.
• ~ Launching cheese would also beneficial for them to create the brand awareness.
Threats:
The present economic crisis in the world, led to the withdrawal of foreign
management from the company and the investment has come to a halt.
S
i
g
n
i
f
i
c
a
n
c
e
o
f
o
p
p
o
r
t
u
n
i
t
y
H
i
g
h
L
o
w
• Untapped
market
o Concentric
diversification
t y O f O c c u• Backward
rre nce
integration o To become
multinational
Summary of threats:
Significance of threat
High Low
• Strong market
Competition
• • Low Switching
Cost
t y O f O c c u •rImported
r e n c e Tin
juices Custom duties on
o
import of plump
Haleeb face strong competition in market of juices, for Good day nestle juices are big
threat and for other all juices like funday and tropico shahzan, Maza and
country juices are big threat. Nestle is the big and strong competitor because Nestle is
an international company and people mostly know about international company due
to good quality.
There is not any huge difference in prices of different juices of the company so
customer can any time select juice of different company which is threat for Haleeb
Food Company.
Imported tin juices are great threat for Haleeb juices especially for Good day because
Haleeb offer good day in market with high quality and tin juices also focus on quality
so there are competitor for each other.
Haleeb import plump of all juices from different countries Germany and France,
Haleeb paid high custom duties on plump, so increase in custom duty can increase
the cost of juices due to which prices of all juices increase which is not good for the
company.
40
Situation analysis – Internal capabilities
REVIEW:
IMPLICATIONS
Management
Production
capability
REVIEW
Haleeb Foods
Company Weight Rating Weighted
Internal Factors Score
STRENGTHS
The industry average is 3.5 so the IFES of the Haleeb Food company
is not good in juices according to the average of the industry
OPPORTUNITIES
• Untapped market 0.20 4 0.8
• Diversification in products 0.10 3 0.3
• Backward integration 0.15 3 0.45
• International markets 0.05 2 0.1
THREATS 0.10 3 0.3
• Strong competitor Nestle in 0.15 4 0.6
• Products advancement 0.05 3 0.15
• Fluctuation in tax rates 0.05 2 0.1
• Imported juices 0.05 2 0.1
• Custom duties on plump 0.10 2 0.2
TOTAL 1.00 3.1
The industry average is 3.5 so the EFES of the Haleeb Food company is
not good in juices according to the average of the industry.
CPM (Competitive profile matrix)
In the CPM the industry average take as 3.50, so the Nestle performing is
the best as compared to their competitors in juices.
Haleeb lunched its juices two years ago but their performance is good
and it is in second number in field of juices due to their pure and nectar
juices with high quality and reasonable prices.
Shahzan only deal in nectar juices and target the lower income group of
people and it all sale is due to customer loyalty.
SOWT MATRIX OF HALEEB F
47
ST strategies. WT strategies.
Extensive marketing
OPPERTUNITIES(O)
There are a lot of untapped Pakistan.
The concentric diversification
in different juices products.
Backward integration can use campaign.
in juice products markets in different areas of
It can become multinational and can target different market of different countries.
Usage rate of juices is
increasing E E Market
development (S1,O1)
E E Product
THREATS(T)
- Positioning as quality product among consumer.(S1,T1)
There isEstrongE competition
Acquiring the in food products
local competitors(S5,T3) market.
Different strategiesadopted by competitors
Nestle in juices products
• New product advancement by different
competitors.
Quantitative Strategic
Planning Matrix
(QSPM)
Balance Sheet
200 200
Sales Growth % 19.26 26.
7 8
57
Gross Profit Margin % 15.39 14.6
5
Operating Profit Ratio % 7.69 7.0
3
Profit Before Tax % 6.86 6.41
Profit After Tax % 4.88 3.9
2
Pretax Profit Growth % 27.70 23.
00
Net Profit Growth % 48.44 21.3
5
*Current Ratio 1.07 0.9
0
Fixed Assets Tunover Times 6.61 6.41
32.6 30.
Return On Equity %
1 82
Return On Total Assets % 15.7 14.
Attractiveness
Estimated
Variable costs 2 8 6
5
Contribution margin 3 10 7
Market share3 18 22 11
= 75 % of 162419946 = 109633463.6
lling to drink
= 36544489
Price range
= 10 price
Average + 25 Avg
+ 65Quantity
= Rs.33
=2
= 33 * 2 * 36544489 = Rs.2411936274
Sales
CostofgoodssoldRs Gross profit
= Administration
2411936274 = 2098360250 = 313576024
Expenses
Distribution=
cost(34691250)
Operating profit
Other income = (81477000) = 197407774
Profit before = 2591400
interest
and taxes = 199999174
From all the above data we find out that there is a lot
of demand for Haleeb juices but they are spending
low as per requirement . As far as promotional
activities are concerned they have introduced many
product as concentric and conglomerate
diversification but when we talk about Haleeb to a
common person he knows that they are offereing just
milk at market place , he does not know that they
have introduced other products like juices , ghee, rita ,
powder milk etc.
Sales
representatives
target all the
untapped
markets and
niches, by using
current
p
products.
Revenue
objectivity
should be
given high
attention ,
and it
should
increase
by 45%
every year
(for the
next 3
y
years.)
Product line
should be
extended by
adding new
flavors
uices. of j
Page
Related and
unrelated
diversificati
on in the
form of
eatables ,
made up of
fruit
extracts and
ffood pulp.
Role of R&D
should be
increased to
help
a) target markets
most effectively
b) to get
knowledge
about
consumer’s
table and
p
preferences.
M
or
e
b
u
d
g
et
a
n
d
re
so
ur
ce
s
s
h
o
Page
ul
d
b
e
al
lo
ca
te
d
to
a
d
ve
rt
is
e
m
e
nt
a
n
d
sa
le
s
pr
o
m
ot
io
n.
B. HOW
IMPLEMENTATI
ON TO BE DONE
Develop
desirable
skills in the
employees
who are
assigned the
basics of
target
Page
implemented
these skills
may include.
The ability of
sales force,
personnel in
finance
department
,expert in
R&D etc ,
should first
understand ,
the nature of
the tasks or
task’s
importance
fot the
company.
To increase
the ability to
put right
people on
right jobs .i.e
the person of
finance dept.
should not be
given the
tasks of
R&D , which
is highly
sensitive and
innovational
field.
Page
•
C.RESPONSIBILITIES FOR IMPLEMENTATION
Page
Page
72
They get comprehensive information from all the departments
carefully and its analysis is conducted with great care . The results are
analyzed with great emphasis on the company’s behalf. If there
appears any deficit then revise their strategies implement them and
then get the results and if there are no loopholes found they continue
to implement that strategy for the specified period of time. This
evaluation conduct twice a year.
Page
Strategic
Marketing
Evaluatio
and
Control
Conduct
strategic
marketing audit
Sele
ct
perf
orm
anc
e
cri
ter
ia,
me
as
ur
es,
Page
an
d
me
tri
cs
Obtai
n and
analyz
e
inform
ation
A
s s e ss p e r f o r m
an d t a k e
necessary
action
Page
Page
75
Page 7 6
CURRENT COMPETITIVE POSITION
Page
; Bata should gain the sustainable competitive advantage.
Current market
share:
Page
ESTIMATED POTENTIAL REVENUE FROM EXISTING
PRODUCTS IN NEW MARKETS (MARKET DEVELOPMENT)*
Page 79
Conclusion
The HFL Company has a very rich history and spread over the world, the
study in this report specially the particular SPACE matrix tells us that HLF
Company should pursue an aggressive strategy. HLF Company has a strong
competitive position in the market with rapid growth. It needs to use its
internal strengths to develop a market penetration and market
development strategy. This includes focus on Water and Juices products,
and catering to health consciousness of people through introduction of
different coke flavor and maintaining basic coke flavor. Further company
should integrate with other companies, acquisition of potential competitor
Page
80
businesses, innovation in branding and aggressive marketing strategy can
bring long term profitability.
As a whole HFL is a good organization to work in but there are certain departments that need
improvements. It is surviving in the FMCG’s sector with some strengths and weaknesses. I am of the
view that if the management of HFL wants to show the same results in the future that it should have to
take some decisions before time, because in the 21st century only those organizations can survive who
Recommendations: Page
81
Haleeb Foods Limited should also allocate a healthy budget for the advertising of
its products.
•HR Department of HFL should introduce HRIS to increase the efficiency of the
company.
•The co-operation among the different departments of HFL should also improve 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 about the feedback of the customers regarding the
of Haleeb Milk.
They should use latest technology for quality maintenance because even now they
are using manual based inspection.
They should try to maintain high quality which they are already producing.
They should use Automated Storage and Retrieval System to minimize the storage
cost.
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82
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83