THE UNIVERSITY OF LAHORE.

(ISLAMABAD CAMPUS)

MBA (4)-eve 2010

A PROJECT ON
CANDIA MILK

Subject:

BRAND MANAGEMENT

Submitted By: Submitted To:

Bilal Malik Sir,AmjadShamim

Umer Mubeen

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 TABLE OF CONTENTS

Headings Page Numbers

1. Introduction of CDL 3

2. Product line 3

3. History of Canidia milk 3

4. Marketing strategies for launching Candia 3

5. The market environment for Candia 3

6. Target market for Candia 6

7. Target market strategy 7

8. Marketing mix for Candia 8

9. Positioning of Candia 9

10. Product life cycle 9

11. Branding and packaging 9

12. Labeling 10

13. Pricing strategies and objectives… 10

14. Distribution strategies 11

15. Promotional mix 11

16. Past and Present market share 13

17. Reasons for failure and Recommendations 13

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INTRODUCTION OF CDL

CDL (CHAUDHRY DAIRY LIMITED) is one of the reputable companies in

pakistan. CDL was established in 1984 as a private limited company. ITS first
project is “HALEEB milk “and later on it continued to expand its product line. In
1988 it introduced “Haleeb cream”. The company has its head office in Lahore
and plant is located 65-km from Lahore in bhai pheru. The plant has latest
technology. The company was awarded with ISO 9000 in 1997 because of its
good quality control system.

PRODUCT LINE

CDL includes the following products.

1. Haleeb Milk
2. Haleeb Cream
3. Asli Desi Ghee
4. Candia milk
5. Liquid skimmed milk
6. skimmed milk powder

HISTORY OF CANDIA MILK

Candia is a product of CDL which was launched on April 121999.Candia

basically a French brand but it is processed and packed under the licensed of
CDL. It is packed in plastic bottles of two different sizes, 0.5 liter and 1 liter. As
far as packaging concern Candia has no competitor in local market.
CDL invested around 200 million rupees to launch Candia in pakistan. Out of
which 10 – 15 million was only spent on the massive advertising campaign
carried out in world cup season at the time of launch.

MARKETING STRATEGIES FOR LAUNCHING CANDIA

Market orientation strategy was used by CDL for launching CANDIA. In this
company identify what customers want and adopted all those activities which are
necessary to satisfy the needs of customers.

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CDL adopted marketing orientation strategy which contains the following
features.

1. Product launch proceeded by market research and need identification.

2. Pull strategy was adopted because in market the UHT sales were
increasing.
3. The product was made by keeping in view the customer needs, rather
then producing it and then trying to push sales.

For the want satisfying ability of the product the company aims at image utility
which is emotional value that a person attached to the brand because of its
reputation.

THE MARKETING ENVIRONMENT FOR CANDIA

The following micro and macro environmental factors played an important role on
CDL marketing activities. The external environmental factors which can influence
on CANDIA sales are the following.

1. Demographic:

It refers to the characteristics of human population size, it distribution and

growth. The total population of pakistan is 140 million and its growing at
the rate of 2.5%.
So there is more potential for CANDIA sales the population growth rate is
favorable and increasing.
The families in pakistan society are now more aware of brands. Their
attitude towards product is entirely changed. In addition to this more
people are migrating from rural to urban areas which are also in the favor
of CANDIA because it is not much distributed in rural areas.

2. ECONOMIC CONDITIONS

The following economic conditions affect the marketing activities of

CANDIA.

BUSINESS CYCLE

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The business cycle consists of four stages, prosperity, recession,
depression, recovery. Currently the overall industry of pakistan is passing
through a stage of recession but it is hoped that it will enter the recovery
stage soon, which will favorable for the company long term objectives.

INFLATION

When CANDIA was launched, the inflation rate in the country was 6.5%
officially as compared to the last year rate of 8.3%.

COMPETITION

CANDIA has no competition as far as packaging concern in the local

market. But as the core product is concerned, there is a substitute threat.
Many other companies including multinational companies are also fulfilling
the demand of UHT milk.

CULTURAL CHANGES

Today society is becoming more complex because of our cultural patterns,

life styles, values; beliefs are changing much more quickly.
Consumer’s awareness about UHT milk has increased so much as result
of massive advertising carried out by tetra pak association of Pakistan.
People change their views about the fresh milk. So mostly customers in
urban area are switching towards the UHT milk.

POLITICAL/LEGAL FORCES

The launch of CANDIA is affected by the environmental anti pollution laws,

according to which a company is prohibited to use that plastic packaging
which is not recyclable. CANDIA has a special “USP” packaging which is
recycle and environmental friendly.

TECHNOLOGY

The technology introduced by CANDIA milk is plastic bottle packaging

whish is also unique selling point because there is no other company

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 providing such packaging. CANDIA also carried out a marketing research
program to deal with competitive pressure in the market. The source of
information used to conduct this market research includes the following:

Internal company information

Dealer information

As the customer’s needs are concerned, both formal and informal

investigation methods were used.

TARGET MARKET FOR CANDIA:

The primary market which CDL was targeting before launching was urban
Sector. There was no age limitations were specified for the product.

CONSUMER MARKET SEGMENTATION

CDL divided the total market in to the smaller segments in their

Segmentation process. The segmentation basis were applied.

1. GEOGRAPHIC SEGMENTATION

CDL has segmented its potential market in all four provinces which is
Further divided in key business centers located in these areas. CDL
basically segment its market in urban sector.

2. DEMOGRAPHIC SEGMENTATION

CDL has divided the market on the basis of income, family size and style:
1. The target consumer of CANDIA high income people with income from
20000 and above.
2. In term of age there is no segmentation done by CANDIA. It is for all ages.

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 3. The segmentation basis by gender includes both male and female for
CANDIA target market.
4. On the basis of social class, CANDIA has segmented the market only
upper and upper middle class.
5. CANDIA also segmented the market on the basis of family life cycle, with
the distinction between single and married class.

3. BEHAVIORAL SEGMENTATION

CDL has divided the market on the basis of benefit desire from the product
and its usage rate.

1. As regards to the benefit desired from the product, CDL has segmented
the market on the basis of taste and quality.
2. There is no segmentation taken by CDL as regards to the usage rate of
the product, which ranges from non user to heavy user.

BUSINESS MARKET SEGMENTATION

CDL has segmented the business market on the basis of customer location and
type. The company has selected the both single and multiple buying sites.

1. The average business order unprocessed milk is considerable large in

size therefore, the company has segmented. The order size on the basis
of sales volume.
2. The company orders the unprocessed milk from the unorganized dairy
industry.
3. In CDL the decision of purchase are normally undertaken by consulting all
the purchase staff members.
4. The purchase criteria is segmented on the basis of quality.

TARGET MARKET STRATEGY

CDL has adopted market aggregation strategy as a single segment. This strategy
can also be called mass market strategy.
The management of CDL has developed on marketing mix and reaches most of
the customer in the entire market. CANDIA is offered as a single product for the

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mass audience. It has one pricing structure, one distribution system and it uses
single promotional program.

MARKETING MIX FOR CANDIA

CDL designed a complete marketing mix for CANDIA which includes it price,
promotion, placement and product management.

1. PRODUCT

Candia is a commodity which is offered to the consumer to fulfill their

needs. It is processed milk which has the UHT technology. It is in liquid
form, white in color and packed in plastic bottles which are available in two
sizes.

CORE PART

The core part is that, it is a complete food supplement which is include all
Vitamins, proteins and lactic acid, which are needed for good health.

CLASSIFICATION

Candia milk is classified as a convenience good because consumer can

buy it any time with a minimum effort. The category of Candia milk is
replacement product because it is different from the Tetra pak milk already
available in the market. Candia is only milk which is sterilized after
packing.

2. BUSINESS ANALYSIS

After one year negotiation, CDL was permitted to produce Candia in

Pakistan as subsidiary company of French Candia. The finances were
arranged and the feasibility reports were made which include the cost of
the whole project.

3. MARKET TESTS

Ad discussed in the earlier part of the report market tests for Candia milk
were being carried out in Lahore do test whether people will actually going

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 to buy it or not. In these tests, sales and repeat buying behavior of
consumer was monitored.

4. COMMERCIALIZATION

CDL decided to start full scale production and developing marketing plans
for Candia. Candia was produced and first launched on 12th April 1999
with a massive advertising compaign.

POSITIONING OF CANDIA

The positioning strategy for Candia milk was on attribute. The attribute on which
CDL has positioned Candia “taste”. Candia has a very different taste among all
the same brands available in market.

PRODUCT LIFE CYCLE

The product life cycle goes through four different stages. There are introduction
stage, growth stage, maturity stage and decline stage.
Candia after passing the 8 months has successfully crossed it introduction stage
and entering in to the growth stage. The company managing the growth stage by
using the strategy of market penetration. But now a days from last two to one
year Candia was in decline stage and is near to going out from the market.

BRANDING AND PACKAGING STRATEGIES

Branding and packaging are the two actual parts of the product. Brand name
identifies the product, it makes shopping easier and ensure the quality to
differentiate the product from the competitors. The brand name of product here is
“CANDIA”. It is the separate name used for the product with out using corporate

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name (CDL) but CDL is not used combined with brand name. Among the five
level of brand familiarity, Candia is at the “Brand Recognition” level.

As far as packaging is concerned, CDL is following “family packaging strategy”,

in which the bottles of Candia are placed in one container. Packaging includes all
the details about the product. In Candia case the primary packaging is a plastic
bottle of white color. This primary packaging is used to protect the milk from heat
and light. The secondary packaging for Candia is consists of 12 bottle pack
which is wrapped in a card board box covered with plastic sheet.

LABELING

Labeling consists of all the information about the brand, name of the company
ingredients, expiry date and instruction. Labeling is considered as a part of
packaging to give full detail about the product. Labeling of Candia includes a
picture which shows, a morning time at a farm and milk in written also in a very
attractive manner.

PRICING STRATEGIES AND OBJECTIVES

The pricing objective for Candia was purely “profit oriented”. And also to achieve
the target return. Regarding pricing strategies, CDL chosen “market penetration
policy” for Candia. Following this strategy, the price of Candia is kept, low in
relation to the target markets range of expected prices. The aim of using this
strategy is to penetrate the mass market immediately and to increase the total
sales volume.

DISCOUNTS

Currently there is no discount offered for consumers and wholesalers. The trade
discounts were given to the retailers at the time of launch of Candia. As the
geographic pricing strategy is considered, Candia is following a “uniformed
delivered pricing” strategy, which is to charge same price to all retailers around
the country. Moreover “one pricing strategy” is also being adopted which enables
consumers to purchase Candia at one price, no matter how much quantity they
buy. Candia adopted “customer base pricing” which means that the price of
Candia is according to the purchasing power of the consumer. Since the target
market belong to higher income group, so it means price is higher than other
brands.

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DISTRIBUTION STRATEGIES

The chained of distribution adopted for Candia is:

COMPANY DISTRIBUTOR RETAILOR CUSTOMER

The reason behind selecting this kind of the distribution channel was that if large
number of retailer spread all over the country who paid it economical and
feasible. The company has only one warehouse in Bhai pheru from where this
distribution takes place. CDL has appointed 35 distributors all over Pakistan for
on time availability of Candia. This distribution is said to be an “intensive
distribution” where CDL is trying to deliver its product to every retail outlet in
urban areas.

PROMOTIONAL MIX

The promotional mix for Candia includes advertising, sales promotion and public
relations.

ADVERTISING

It gives the feel of the product. It is an impersonal communication that the

sponsor has paid for and in which the sponsor is clearly identified. Candia is
advertised through different channels.

1. TELEVISION

Television is contributed lot more in the promotion of Candia. At the time

of launch CDL invested around 10 to 15 million one television ads. There
ad is of 12 second duration which appears quite often on both of the local
channels.

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 2. NEWSPAPERS

CDL has advertise Candia milk in all reputed news papers of the country
like nation, dawn, the news
and the daily jang.

3. SIGN BOARDS

Sign boards and billboards are also playing an important role in the
promotion of Candia. Candia neon sign can also be observed on some of
the eye catching location of the cities.

SALES PROMOTION ACTIVITIES

The major sales promotion activity carried out for Candia was sponsorship is
typically viewed as a long range image building activity.

PUBLIC RELATIONS

CDL also using public relations to build a strong image of the company. The
management developed good public relations with the players of Pakistan cricket
team by giving them cash prizes through out the cricket world cup 1999.

PROMOTIONAL STRATEGY

CDL has used pull strategy to promote Candia because the market potential was
already identified since UHT sales were increasing. According of the brand
manager of CDL pull strategy is effective to bring Candia bottles on the shelves
of stores. The margins given to retailers are 6.5% and to distributors are 9%
which are high than the other UHT processed milk available in the market.

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PAST AND PRESENT MARKET SHARES

The Candia milk was started in April 12 1999. According to the company sources
the Candia milk was ended its introduction stage in 8 months. After two year
Candia was achieved 2% share in the UHT milk market and also showing the
increasing trend in it. But from last four to three years it market share is
decreasing and now a days it has less than 1% share in the market and the
Candia is near to vanished from the market.

REASONS FOR FAILURE AND RECOMANDATIONS

After conducting the whole research we have been able to point out obtain areas
of weakness in the marketing efforts of Candia. Because of these gaps and flaws
Candia has not shown these results which were expected at the time. Its launch
the whole advertising campaign carried out in the beginning paid only in the first
three months. After that the sail directly fell down which forced the company to
cut out its expenditure and on promotions. Here we evaluated several key failure
points which are listed below.

1. The foremost attribute where Candia is behind is the taste and color of the
milk. The color is not purely white and because of it customers thing that it
is not pure.

2. Candia has failed to target the all age groups. The milk has been able to
Stimulate demand the age group of 6 to 12 youth and the elderly people
are not forgeted. Youth and elderly are not targeted. Young people age
between 20 to 34 have the highest purchasing power, elderly on the other
hand do not prefer Candia or any other packaged milk. They rather go for
fresh milk.

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3. Candia has failed to persuade the health conscious people, who mostly
Belong to their target market of higher income groups. They perceive the
milk very thick and hence switch to other low fat milk available in the
market.

4. Another weakness of Candia is its pricing strategy. Its price is high than
Other brands in the market. One time Candia is following the market
penetration strategy and at the same time the prices are kept higher then
the other brands, which does not allow the Candia to penetrate in the
market.

5. As well as the packaging of Candia the plastic is used is thick as

Compared to the foreign plastic bottled milk available in the market. This
plastic is used is not approved by any associations. While the plastic used
in the bottles of original French Candia is FDA approved.

6. Packaging is the only factor contributing to bad taste and color of milk.
Although it is a USP packaging but if once it is exposed to sunlight the
milk changed its color.

7. Instead of plastic cap. Foil is used on the mouth of the bottle as a seal
wrapping. If seal is teared off for use it remained unclosed allowing air to
enter in to the bottle which further reduce the quality and life of the milk.

8. Now as we see the branding of the product the name Candia to most of
the Pakistan means more like a name of some Candy. This is because
the people are not aware of the original European Candia which is popular
in 52 countries around the world. The brand name is suitable more for
flavored milk rather than plain milk.

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9. The labeling does not includes much information about the milk only the
fat contents is percentage are mentioned which is not enough to inform a
customer about the other important nutrients contains in the milk.

10. The packaging is deceptive in the sense that it is of white color while the
milk if not pure white. The bottle should be transparent so that the exact
color of milk is visible.

11. Another reason of the failure of Candia is that since it is launched the
Company is not able to increase the depth of the product such as flavors,
colors, sizes and varieties. These innovations are necessary in building
the image of brand in to the mind of consumers.

12. Candia did not conduct any free sampling at the time it was introduce.

13. The retailers complaint that their percentage in the sale of Candia which
Is 6% to 6.5% should be increased. Similarly the sales are low which
result in low turn over for retailers. So retailers are not happy to accept
huge quantities to place in stores.

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14. There is no incentive or discount offered to retailers and end consumers.
Moreover there is no bulk discounts like, buy 12 one free. This practice is
followed by other companies.

15. CDL has never tried to adopt the strategy of seasonal price cuts, which
Could enhance sales and also could help the company to monitor the
changing buying patterns of customers.

16. There is not enough brand awareness in the society for Candia.
That is why company is paying handsome amount of money to limited
retailers for keeping Candia bottles on the main shelves where customers
can easily watch them.

17. The other major failure is that CDL is not providing deep freezers and
fridges to big retailer outlets and departmental stores for Candia.

18. Not been able to target remote areas small towns and northern areas of
Pakistan where there is lot of demand for tea.

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19. The management at CDL is very much sure about the product life cycle of
Candia. They assume that Candia has successful reached to growth
stage but in reality, it is not the case. The present PLC situation of Candia
is something like this. Candia is in declining stage, where the company
has cutted down its cost on its promotions. The only customers left are the
loyal ones. The company at the surviving stage is required to change its
overall strategy for Candia.
There are other important areas where Candia has failed to perform well.
One of the major reason of its failure is that one part of the market which
is targeted higher income groups living in posh areas, even there Candia
sales have declined rapidly.

From our point of view if all these causes of failure which is mentioned
above are not taken in to the consideration and to overcome all on these
failures the Candia will be vanished very soon from the market. So there
is need of changing the overall strategies for Candia milk to come in
better position in the market.

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