Everyone knows the famous adage from Shakespeare’s play, Romeo and Juliet, “What’s in a name? “A rose by any other name would smell as sweet.” However, in the modern business world, the name matters. It is the name, which becomes brand and then preference of the customers buying it. Even the staple products are not an exception to this branding and people mostly buy names and not the product. It may be easy to apprehend the importance of the brand name while buying high value items like electronics, equipment, machinery, vehicles etc.However, when it comes to basic needs like milk and water; it is difficult for some to appreciate the importance of branding.
It was almost impossible, especially in the underdeveloped and developing countries, to think of buying basic requirements like milk and water from retail outlets and super stores and that too branded ones. With a change in demographics by urbanization, rise of middle class, and more females opting to work outside their homes, the buying and consumption habits also changed. Convenience and flexibility were the latent needs that were to be fulfilled by the entrepreneurs.
Pakistan is the fourth largest milk producing country of the world with an estimated production of 55 billion litters of milk per annum. Milk Pak introduced the packaged milk in 1981 and provided an alternative milk procurement and consumption choice for the consumers. Packaged milk unlike fresh milk has a longer shelf life and is available in easy to handle multiple packaging options. Due to its convenience, the packaged milk got significant attention and acceptance of the consumers. The start of packaging milk in Pakistan is said to have an interesting background dating back to 1976 when Packages found surplus capacity at their unit producing packaging for beverages. This made them to invest in vertical integration and have their own user of this surplus capacity giving birth to the idea of packaged milk in Pakistan. Since 1981 the year of its inception, Milk Pak enjoyed the monopoly for some time unless Haleeb emerged as a strong competitor in 1986 and challenged its market share. There was subsequently a merger between Milk Pak and Nestle in 1988 as Nestle Milk Pak.
There is significant acceptance for packaged milk in Pakistan and there has been a growing trend of shifting to packaged milk especially among middle and upper class households. However, their current share of the packaged milk is about 7-8% only and there is a huge potential market for the packaged milk in Pakistan. Seizing this potential market requires to develop further the raw milk procurement/collection, transportation and distribution channels. This would also require exhibition of certain skills by marketers and sales people to tap and grab this market effectively. Numerous strategies can be helpful in this regard.
The producers and the marketers have developed and used a myriad of effective strategies to develop and strengthen the packaged milk market in Pakistan. Several strategies can be helpful to further boost this demand and, of course, the packaging companies are working on it. However, the most effective ones, which contributed to its success and would require special emphasis to win further market penetration,are following:
The success of the packaged milk was and is dependent on the awareness as to the health and safety benefits of the packaged milk. Packages being the pioneer in packaged milk had to take the lead in propagating these benefits. Packages in collaboration with Nestle Milk Pak ran very effective informational advertisements on Television and print media. This campaign sough to educate the middle class consumers as to the safety features of the packaged milk as compared to the open unpackaged milk. This campaign provided a strong base, had a lasting effect, and helped the packaged milk industry to grow. This also encouraged the other companies to enter this market.
Skus and value addition:
The success of the packaged milk also lies in their variety of stock keeping units. Consumers can buy them in 250 ml to 1.5-liter packaging depending upon their need. This flexibility to choose as per individual need is pivotal to market realization. Another important tool is value addition to meet emerging consumer preferences ranging from sugared milk to Lassi, low fat, calcium/iron-enriched milk etc. This value addition and expanding product range would certainly help to add to the market share in the long run.
Convenience store business:
One most important thing that contributed to acceptance of the packaged milk was its all-time availability on convenience stores in addition to other channels. This availability also strengthened the demand as its visibility on the stores made people think of using it. Infact, for middle and upper middle class it was among impulse buying items. The packaged milk companies are doing a great job by ensuring its availability through all the distribution channels in every nook and corner of the country. This was a challenge, which the packaged milk companies undoubtedly met very efficiently.
Infact it was a long challenging journey to create market for the packaged milk in Pakistan. This challenge was well taken by Milk Pak, continued by Haleeb and further strengthened by Olpers. This challenge being taken ahead by all the packaged milk companies operating in Pakistan. There is no denying the fact that there is a very lucrative market for processed milk in Pakistan that need to be stimulated. The only way is to emphasize the importance of its safety and hygiene features educating the population at large as to the health hazards associated with using unhygienic and adulterated open milk. There is campaign, and may be based on some facts as well, as to the quality of the packaged milk. This has even been highlighted by the competing packaged milk brands. This has created some doubts in the minds of the consumer. These doubts as to the purity of the packaged milks have inhibited the market growth that grew at quite high pace from 2006 to 2012.