Table of ContentsTable of Contents ............................................................................................................ 1 Acknowledgement ......................................................... Error! Bookmark not defined. Dalda ± History and Overview ........................................................................................ 2 Current Market Situation: ................................................................................................ 3 Banaspati: ................................................................................................................... 3 Cooking Oil ................................................................................................................ 3 Developments in the ³Product Line´ ............................................................................... 4 Competition .................................................................................................................... 5 Credit Terms of Dalda and Competitors .......................................................................... 6 Overall Market Scenario for Oil and Banaspati ............................................................... 6 Swot Analysis: ................................................................................................................ 9 Strenghts: .................................................................................................................... 9 Weakness: ................................................................................................................... 9 Opportunities: ............................................................................................................. 9 Threats: ..................................................................................................................... 10 Current Punch Line ....................................................................................................... 10 Unique Selling Proposition (USP) ................................................................................. 10 Boston Consultancy Group Matrix (BCG Matrix) ......................................................... 11 Repositioning: Need for Repositioning ......................................................................... 12 Proposed Marketing Strategy ........................................................................................ 14 Line Modernization ................................................................................................... 14 Segmentation: ........................................................................................................... 14 Preferences ................................................................................................................ 15 Bases for Segmenting Consumer Market ....................................................................... 16 Geographic Segmentation.......................................................................................... 16 Demographic Segmentation....................................................................................... 16 Psychographic Segmentation ..................................................................................... 16 Behavioral Segmentation........................................................................................... 17 Placement ..................................................................................................................... 18 Pricing .......................................................................................................................... 19 Current Market Prices ............................................................................................... 20 Promotion ..................................................................................................................... 21 Promotion Costing .................................................................................................... 22 Dalda ± History and Overview Dalda is a brand of hydrogenated vegetable oil popular in South Asia. The substance was originally imported from the Netherlands in the 1930s by the trading company Dada Limited. When Hindustan Lever Limited wanted to brand it, the trader, who still retained a commercial connection with the product, said it had to be named after his company. HLL wanted to include the letter 'L' in it for Lever (of the Unilever group), and thus was born one of the longest-living brands in India. Dalda, which came to be synonymous with the Banaspati (hydrogenated vegetable fat) genre, was recently extended to a range of edible oils. Hindustan Lever has since sold the brand. In July 2004, Unilever Pakistan accepted the offer of Rs. 1.33 million for the sale of its "Dalda" brand to Westbury Group in collaboration with Unilever Employee Welfare Group, who formed a separated company under Dalda Foods (Private) Ltd. Dalda has now divested into Canola and Olive Oil product variants. Today, Dalda Foods (Pvt.) Limited deals in Banaspati and cooking oils, Ghee (Banaspati) and claim to use Virtually Trans Fat (VTF) free technology. With total annual sales volume exceeding USD 10 Million, Dalda is one of the leading brands available in Pakistan for over 60 years. 2 y Branded oils (mostly soybean). sold mainly in the urban areas especially in the south. y Lever Brothers Pakistan Limited with the entire product range of Dalda and Planta is the largest player. Banaspati: y Hydrogenated vegetable fat. Banaspati is perceived to be old fashioned and unhealthy by the upper income/urban consumers.Current Market Situation: The market is highly commodity driven and the consumers are extremely price sensitive. with Dalda. especially for meat curries and sweet meats. Unbranded segment comprises of unrefined soybean. y Lately sunflower and canola based single oils have aggressively entered the market. y y Lever Brothers Pakistan Limited pioneered this category in Pakistan. So Dalda has to make sure that it maintains a balance with the fluctuating world oil prices. Branded segment s premium priced and relatively a recent development. The final selling price of edible oil and banaspati is highly dependant upon the prevailing world oil prices. semi solid granular product with a slip melting point of 38 degree centigrade. Cooking Oil y y y Sharply divided into branded and unbranded segments. closely followed by Habib. This is the reason why Dalda uses replacement cost pricing rather than stock recovery. y y Traditional cooking medium. 3 . Mainly consumed in central and northern areas especially by the lower income/rural consumers. rapeseed and cottonseed oil sold loose to rural/lower income consumers. Lever Brothers Pakistan Limited entered single oils market with Dalda Sunflower Oil (1991) 5. Test market launch of Dalda Lajawab (1998) 11. Dalda Banaspati launched in Pakistan (1952) 3. Dalda Cooking Oil launched (1981) 4.Developments in the ³Product Line´ 1. Dalda Banaspati first launched in British India (1938) 2. Dalda Crisp n Dry launched (1999) 4 . Dalda Banaspati re-launched with enriched flavor (1997) 8. Dalda Cooking Oil Vitamin E (1994) 6. VTF Dalda Banaspati launched (1998) 10. Planta (1994) 7. Dalda cooking oil re-launched with addition of vitamin E (1997) 9. it is a market challenger in the cooking oil category lending the first place to Habib cooking oil. There are approximately 172 registered banaspati brands. In the banaspati market.Competition Basically the branded market of edible oil and banaspati is dominated by four players namely. It enjoys hard core loyalty in the 35+(female) age bracket. they lose out to competitors like Habib who has Habib Nayab and Habib Handi catering to the lower income segment. In this younger segment Tullo gold and Habib are the ³in´ brands because their packaging is trendy and the attire which they portray in their promotional campaigns is very young and energetic. If Planta is considered along with Dalda then Lever Brothers Pakistan Limited (LBPL) accounts for the highest sales volume. Therefore. which is considered to be a very traditional brand. However. making it a premium product. Dalda is weak in the younger segment. Besides there is a very large unquantifiable unbranded market selling banaspati. This increases the final selling price. Dalda VTF is a sure shot market leader. unrefined soybean. Consumers all over the country have great trust in the brand name of Dalda. LBPL has no leverage to come up with cheap ingredient brands. Therefore it becomes highly difficult to estimate the market size. Habib. The brand awareness and recall is 97%. rapeseed and cottonseed oil loosely to the rural and lower income consumers. 5 . Another problem is that Unilever International dictates the ingredients and the quality control terms for the entire product range of Dalda. However. Tullo and Soya Supreme. here it suffers at the hands of boredom. Dalda. Credit Terms of Dalda and Competitors Dalda 4 Day cheque 3 day cheque 15 day cheque Cash Habib Soya Supreme Imported Oils Overall Market Scenario for Oil and Banaspati 1st 2nd 3rd 4th 5th Dalda and Planta Habib Tullo Soya Supreme Others 35 % 28 % 17 % 14% 06 % 6 . Visibility BANASPATI AND OIL STORES DALDA Low Medium High KIRIANA DALDA Low Medium High 7 . GENERAL STORES DALDA Low Medium High SUPER STORES DALDA Low Medium High 8 . The brand recall is as high as 97%. y There is a growing segment of working women in search of modern and convenient methods of cooking. closely followed by Habib. y In the case of Dalda it poses great difficulties. It is perceived as an old brand and the consumers are bored with it. Opportunities: y Dalda can cash up the banaspati market in Northern and Central areas of Pakistan where there is a large consumption especially by the rural and lower income groups. y People are becoming health conscious and are switching to brands offering vitamins and cholesterol free attributes.Swot Analysis: Strenghts: y y y y Dalda¶s greatest strength is the blind trust of the consumers in the brand. as it is a regional brand catering to Pakistani and Indian markets only. 9 . The entire product range has extremely high brand awareness. The quality of the product is maintained at high standards under the supervision of Unilever International. Therefore. Weakness: y The brand suffers with an image problem. y There has been no innovative packaging change since 1994. y y In the Banaspati category it¶s the only Trans fat free brand available. Dalda is the largest player. y The branded market has been receiving a warm welcome lately in the metropolitan areas of Pakistan. the flavored oils stand a very good chance. It aspires to be viewed as a ³cooking expert´. Banaspati is perceived to be old fashioned and unhealthy by the upper income/urban consumers.Threats: y y Fluctuations in the world oil prices. Current Punch Line ³Jahan Mamta Wahan Dalda´ Unique Selling Proposition (USP) Its USP is taste and Quality. y y Lately sunflower and Canola based single oils have aggressively entered the market. The unbranded segment comprises an enormous 50 % of the edible oil and Banaspati market. This is sold loose to the rural/lower income consumers. 10 . Boston Consultancy Group Matrix (BCG Matrix) Dalda is a cash cow where by providing Dalda Foods with continuous source of revenue.. High Market Growth Low Market Growth High Market Share Low Market Share 11 . The entire product range alone accounts for 80 % profitability of the firm. Habib Cooking Oil has the youngest image in the mind set of the consumer. Soya supreme and Dalda trying to keep up with competition also introduced plastic bottles. The only minor changes included a slight flavor change of Dalda banaspati in 1993 and the launch of Dalda Crisp n Dry and Dalda Lajawab in 1997 and 1998 respectively. Since then there haven¶t been much changes in the 4 Ps of Dalda Cooking oil and Banaspati. Foreseeing. Although consumers all over the country have great faith and trust in the brand name and quality still its perceived as an old brand. as it was the first one to market cooking oil in trendy. 12 . Trying to topple over competition Dalda came up with Dalda Lajawab and Dalda Crisp n Dry in 1997 and 1998. quality and purity of ordinary Dalda and Lajawab or Crisp n Dry! In short the consumer was not getting the Unique Selling Proposition (USP) of the new extensions which where being promoted and for which he/ she was paying. They are using younger models and lending the line extension. However. It¶s viewed as cooking oil or banaspati used by older generations and one that does not fit the lifestyles of younger people.Tullo Gold a very trendy and modern look.Repositioning: Need for Repositioning The brand Dalda entered the Pakistani banaspati market in 1952 and launched Dalda Cooking Oil in 1981. only Habib owns this trait in the mind of the consumer. This proves that all through out Lever Brothers Pakistan have maintained their conservative strategies in marketing Dalda Cooking Oil. One of the reasons for this is the strict policy structure and dictation of all goals and strategies by Unilever International. this shift towards modernization of this market Tullo has introduced Tullo Gold in the market. this diversification failed miserably as the consumers could not differentiate between the taste. However. This is the primary reason why Dalda has lost its market share to Habib and Tullo. disposable plastic bottles. Neither environmental factors nor changes in consumer trends have been taken into consideration while marketing the brand. To top it all off the last packaging change was done back in 1994 and that too was not very different or distinct from other brands. All the brands have pretty much the same look. They overlooked the fact that the operating market had intense competition with new entrants picking up market share. At that time what was needed was simply modernization of the brand without confusing the consumer by adding similar products to the clutter. even though the new products could have appealed to a different consumer group altogether. One of our observations is that there is hardly any difference between the package color or design. Dalda with Lajawab and Crisp n Dry tried the concentric diversification strategy. Moreover when they are kept in the aisles of retail outlets all one can spot is a bunch of containers with either yellow or green packaging. A good opportunity is one in which the industry is highly attractive and the company has a mix of business strengths to be successful. They sought new products that had technological and marketing synergies with the existing product lines. 13 .Diversification growth makes sense when good opportunities can be found outside the present businesses. Similarly. It is also less draining on the company¶s cash cow. piecemeal or all at once. the line might need to be modernized. buying attitudes. Dalda cooking oil and will stop manufacturing and selling Dalda Lajawab and Crisp n Dry. The issue is whether to overhaul the line. it is not possible to customize the offer/communication bundle to each individual customer. product modernization is carried on continuously. 14 . Dalda will try to isolate some broad segments that make up the market for different items on its product line. purchasing power. Segmentation: Market segmentation at the level of ³segment marketing´ will be practiced for Dalda in order to increase targeting precision. we would be continuing the marketing of Dalda (VTF) banaspati. health conscious consumers for Dalda cooking oil with vitamin E. This will be a line extension catering to the needs of women between the ages of 20 and 45 and belonging to the upper income strata of Rs. modern working women looking for convenience for the Dalda flavored oil market (this is a line extension we have proposed in this report and will be discussed later in greater detail). geographic locations.Proposed Marketing Strategy Line Modernization Even when the product line length is adequate. For example.000/plus. Therefore. In this. 10. and buying habits. A piece meal approach allows the company to see how customers and dealers take to the new style. It is recognized that buyers differ in their wants. In rapidly changing product markets. This is the reason why we have planned a piecemeal approach for repositioning Dalda. LBPL will try to do a similar thing with Dalda through the introduction of flavored oils. However. Companies plan product improvements to encourage customer migration to higher valued. higher priced items. Some consumers look for pure banaspati with a rich taste and smell. the best solution for Dalda is to have a separate product positioned in each different segment. Then there are nuclear families with working mothers who are trying to build trendy and convenient eating habits. Dalda cooking oil with vitamin E for the second and Dalda flavored oil for the working mothers. the natural market segments. Dalda banaspati for the first set of consumers. Thus. Along with them are consumers who are very health conscious and are not ready to compromise their healthy diet patterns under any circumstances whatsoever. cultural taste of their food. 15 . there is simply no way that they want to give up on the typical.Preferences Research indicates that the edible oil and banaspati market has distinct preference clusters. 10. Islamabad and Multan. 4000/. Keeping in mind the strategic importance of a good distribution network. LBPL has divided Pakistan into six geographical locations. Hyderabad. Dalda has to ensure easy access and availability or else it would lose out to competitors. However.plus. The neighboring areas of these metropolitan cities also report to the above mentioned six branches. Psychographic Segmentation y The entire product range would be targeted at females leading a trendy and modern lifestyle. Lahore. the new flavored oils would be targeted at the upper strata of Rs. Faisalabad.000/plus. These include Karachi.Bases for Segmenting Consumer Market Geographic Segmentation The market for oil and banaspati is highly commodity driven. the perceived difference between various brands is very little. Therefore. Flavored oils would especially be marketed to working women looking for convenient and smart recipes. As the loose oil/banaspati consuming segment comprises around 50% of the market. y For Dalda banaspati and cooking oil the income strata would be Rs. Moreover. 16 . Demographic Segmentation y The target audience will be primarily females starting from the age of 20 to round about 45 years of age. therefore. Dalda junior would continue targeting this segment. sea foods and meats. Can be used for shallow. dips. Soon after Moharrum the marriage season will begin. griddle and deep-frying.Behavioral Segmentation y We will try to increase the occasions of oil and banaspati consumption. we will be inducing new usage patterns. Can be used in salad dressings. 6. Can be used for adding lemon flavor to curry. 2. Can be used in soups and stews. Can be used as a drizzle in presentations. 7. Following are the extra uses for this category: 1. This will be a good opportunity to cash on the seasonality effect. Can be used for grill basting. etc. Can be used for sauntering vegetables. Can be used for brushing pizza dough 8. 3. 17 . 4. y Through the introduction of flavored oils. 9. mayonnaise. 5. Can be used for marinating meat. 18 . To counter this we would improve the current shelf placement of Dalda by offering higher margins and substantial trade discounts. Faisalabad. y Similarly on the sales of 100 units of the five liters pack the retailer would be given five extra units free of cost. 100. The final selling price is greatly dependent on the prevailing world oil prices. Higher margins would be tied with the sales delivered/achieved. Under each Assistant Branch Manager are Lever¶s Distributor Managers. Each branch has a branch manager to whom several Assistant Branch Manager Report. In order to cash on the shelf space all through out the year LBPL lays great stress on having a strong distribution system.Placement Edible oil and Banaspati is highly commodity driven. Besides this the perceived difference between the various brands ion this price sensitive category is almost negligible therefore thew placement at retail outlets greatly determines the sales volume. The entire inventory leaves the factory and goes to the depot where each distributor has already submitted the total week¶s requirements.000/= would entitle the retailer a commission of 5% of the total Rupee Sales. Islamabad and Lahore. Bearing this in mind we strongly believe that Dalda is suffering at the hands of growing competition. Hyderabad. While on the sales of 100 units of the two and a half liters pack the retailer would be given two extra units free of cost. For Example y Sales exceeding Rs. Multan. Each Distributor Manager is responsible for Five Distributors of Lever Range of Products. It has Six Branches one each in the cities of Karachi. This is mainly because of the margin pressures and the high quality expensive ingredients.5 liters. We will maintain the current price of the existing product range.for 1. The entire product range is perceived to be premium priced. However. LBPL has no say whatsoever in determing the quality standards and the ingredients used in the manufacturing process. 130/.Rs. 19 .130/. The pricing strategy is cost based and we recommend replacement cost pricing for the repositioned Dalda instead of stock recovery pricing. As the current prices are dependent upon the prevailing world oil prices the new type of Pricing strategy will ensure that the spread between cost and selling price is kept to a minimum.Pricing Edible oil and Banaspati market is extremely price conscious. Dalda Lemon . This will make the prices of Dalda more competitive as the fluctuations in the market prices will be absorbed in the final selling price.5 liters. Lajawab and Crisp n Dry would be withdrawn from the market. The price of flavored oils would be as follows: y y Dalda Ginger n Garlic ± Rs. It is given in the following table.for 1. 5 liters 5.0 liters 2.0 liters 5.0 liters 2.0 liters 1liters PLANTA OIL OIL HABIB OIL OIL Bottle Oil Bottle Oil GHEE TULLO T.5 liters 4.5 liters 5.25 liters 4.5 liters 5.0 liters 3.0 liters 2.0 liters 1.0 liters 1.5 liters 190/300/- - 20 . GOLD OIL OIL OIL SOYA SUPREME RAFHAN OIL: OIL OIL 2.5 liters 3.5 liters 2.5 liters 2./168/320/109/197/168/320/109/160/320/169/323/330/500/161/330/165/315/165/- Price After Discounts 100/185/100/162/308/- DALDA OIL OIL Bottle Oil Bottle Oil GHEE GHEE Crisp¶n¶Dry 2.Current Market Prices BRAND Category Package Size Actual Price Rs.5 liters 5.5 liters 5. It has always been seen as a very motherly brand. Females graduating from the institute formulate a potential consumer segment. The following are the steps we have planned. The scheme would start from January 1. The tag line ³Jahan Mamta Wahan Dalda´ was the last repositioning given to this brand which yet again has its root from the motherly foundation. This will reflect on the social responsibility effort those LPBL practices on its various brands. y Besides this we will continue marketing Dalda Banaspati (VTF) and Dalda cooking Oil to not only the present segment of females aged 35+years but also to females between the ages of 20-34 years.and above. 21 . y A newer aspect of Dalda will be brought into light in the coming year. we have decided to change the Brand personality of Dalda. care would be taken to choose younger and fresher looking models. May. The 7-second advertisement would create brand awareness for the new line extension of flavored oils.Promotion Seeing the current market perception of Dalda.e. a brand which has been used generation after generation. y Dalda Ka Dastarkhan will be re-launched with a completely new look on both FM ± 100 and PTV world starting from next quarter onwards i.each. These ads will try to portray a very trendy and modern setting. June and July. This campaign would be strictly focused on the novelty of Dalda. 000/. Dalda would be granting 10 students of Home Economics College for Women a sponsorship worth Rs. 2001. 150. Through this effort Dalda will be able to create a good name in its future target market.10. We strongly feel that Dalda needs to take a diametric turn around in the message that it passes on to its consumer. This particular variant would be marketed only to a select group of consumers belonging to the upper strata of Rs.000/. y A teaser campaign for the new position would be designed. 40 spots would be aired two to three times a day. 14-16 million. The total cost of this campaign would come up to Rs. in the time slot of 6:45 p.second TV commercial would be aired for one month (June).m.1 million. Scholarship: Ten scholarships starting next year would cumulate a total of Rs. Research has indicated that this time slot gives the highest reach of the target audience. 4.Promotion Costing 1.m. Print And Billboard: Total costing would sum up to Rs. Dalda Ka Dastarkhan: The total cost of thirteen episodes on TV and a quarter year running on FM 100 would cost Rs. 3.5 million. Teaser: A 7. 1. 2. 15 million. to 7:45 p. 2. 22 .