Table of Contents

Table of Contents.................................................................................................................2Acknowledgement..............................................................................................................3Dalda – History and Overview............................................................................................4Current Market Situation:....................................................................................................5

Banaspati:........................................................................................................................5Cooking Oil.....................................................................................................................5

Developments in the “Product Line”...................................................................................6Competition.........................................................................................................................7Credit Terms of Dalda and Competitors..............................................................................8Overall Market Scenario for Oil and Banaspati..................................................................8Swot Analysis:...................................................................................................................11

Strenghts:.......................................................................................................................11Weakness:......................................................................................................................11Opportunities:................................................................................................................11Threats:..........................................................................................................................12

Current Punch Line............................................................................................................12Unique Selling Proposition (USP).....................................................................................12Boston Consultancy Group Matrix (BCG Matrix)............................................................13Repositioning: Need for Repositioning............................................................................14Proposed Marketing Strategy............................................................................................16

Line Modernization.......................................................................................................16Segmentation:................................................................................................................16Preferences.....................................................................................................................17

Bases for Segmenting Consumer Market..........................................................................18Geographic Segmentation..............................................................................................18Demographic Segmentation...........................................................................................18Psychographic Segmentation.........................................................................................18Behavioral Segmentation...............................................................................................19

Placement...........................................................................................................................20Pricing................................................................................................................................21

Current Market Prices....................................................................................................22Promotion..........................................................................................................................23

Promotion Costing.........................................................................................................24

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

Current Market Situation:

The market is highly commodity driven and the consumers are extremely price sensitive.

The final selling price of edible oil and banaspati is highly dependant upon the prevailing

world oil prices. So Dalda has to make sure that it maintains a balance with the

fluctuating world oil prices. This is the reason why Dalda uses replacement cost pricing

rather than stock recovery.

Banaspati:

Hydrogenated vegetable fat, semi solid granular product with a slip melting point

of 38 degree centigrade.

Traditional cooking medium, especially for meat curries and sweet meats.

Mainly consumed in central and northern areas especially by the lower

income/rural consumers.

Lever Brothers Pakistan Limited pioneered this category in Pakistan, with Dalda.

Banaspati is perceived to be old fashioned and unhealthy by the upper

income/urban consumers.

Cooking Oil

Sharply divided into branded and unbranded segments.

Branded segment s premium priced and relatively a recent development.

Unbranded segment comprises of unrefined soybean, rapeseed and cottonseed oil

sold loose to rural/lower income consumers.

Branded oils (mostly soybean), sold mainly in the urban areas especially in the

south.

Lever Brothers Pakistan Limited with the entire product range of Dalda and

Planta is the largest player, closely followed by Habib.

Lately sunflower and canola based single oils have aggressively entered the

market.

3

Developments in the “Product Line”

1. Dalda Banaspati first launched in British India (1938)

2. Dalda Banaspati launched in Pakistan (1952)

3. Dalda Cooking Oil launched (1981)

4. Lever Brothers Pakistan Limited entered single

oils market with Dalda Sunflower Oil (1991)

5. Dalda Cooking Oil Vitamin E (1994)

6. Planta (1994)

7. Dalda Banaspati re-launched with enriched flavor

(1997)

8. Dalda cooking oil re-launched with addition of

vitamin E (1997)

9. VTF Dalda Banaspati launched (1998)

10. Test market launch of Dalda Lajawab (1998)

11. Dalda Crisp n Dry launched (1999)

4

Competition

Basically the branded market of edible oil and banaspati is dominated by four players

namely; Dalda, Habib, Tullo and Soya Supreme. There are approximately 172 registered

banaspati brands. Besides there is a very large unquantifiable unbranded market selling

banaspati, unrefined soybean, rapeseed and cottonseed oil loosely to the rural and lower

income consumers. Therefore it becomes highly difficult to estimate the market size.

In the banaspati market, Dalda VTF is a sure shot market leader. However, it is a market

challenger in the cooking oil category lending the first place to Habib cooking oil. If

Planta is considered along with Dalda then Lever Brothers Pakistan Limited (LBPL)

accounts for the highest sales volume.

Consumers all over the country have great trust in the brand name of Dalda, which is

considered to be a very traditional brand. The brand awareness and recall is 97%. It

enjoys hard core loyalty in the 35+(female) age bracket. However, Dalda is weak in the

younger segment, here it suffers at the hands of boredom. In this younger segment Tullo

gold and Habib are the “in” brands because their packaging is trendy and the attire which

they portray in their promotional campaigns is very young and energetic.

Another problem is that Unilever International dictates the ingredients and the quality

control terms for the entire product range of Dalda. This increases the final selling price,

making it a premium product. LBPL has no leverage to come up with cheap ingredient

brands. Therefore, they lose out to competitors like Habib who has Habib Nayab and

Habib Handi catering to the lower income segment.

5

Credit Terms of Dalda and Competitors

Dalda 4 Day cheque

Habib 3 day cheque

Soya Supreme 15 day cheque

Imported Oils Cash

Overall Market Scenario for Oil and Banaspati

1st Dalda and Planta 35 %

2nd Habib 28 %

3rd Tullo 17 %

4th Soya Supreme 14%

5th Others 06 %

6

KIRIANA

BANASPATI AND OIL STORES

7

Visibility

Low Medium High

DALDA

Low Medium High

DALDA

GENERAL STORES

SUPER STORES

8

Low Medium High

DALDA

Low Medium High

DALDA

Swot Analysis:

Strenghts:

Dalda’s greatest strength is the blind trust of the consumers in the brand.

The entire product range has extremely high brand awareness.

The brand recall is as high as 97%.

The quality of the product is maintained at high standards under the supervision of

Unilever International.

In the Banaspati category it’s the only Trans fat free brand available.

Dalda is the largest player, closely followed by Habib.

Weakness:

The brand suffers with an image problem. It is perceived as an old brand and the

consumers are bored with it.

In the case of Dalda it poses great difficulties, as it is a regional brand catering to

Pakistani and Indian markets only.

There has been no innovative packaging change since 1994.

Opportunities:

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.

The branded market has been receiving a warm welcome lately in the metropolitan

areas of Pakistan.

People are becoming health conscious and are switching to brands offering vitamins

and cholesterol free attributes.

There is a growing segment of working women in search of modern and convenient

methods of cooking. Therefore, the flavored oils stand a very good chance.

9

Threats:

Fluctuations in the world oil prices.

Banaspati is perceived to be old fashioned and unhealthy by the upper income/urban

consumers.

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.

Current Punch Line

“Jahan Mamta Wahan Dalda”

Unique Selling Proposition (USP)

Its USP is taste and Quality. It aspires to be viewed as a “cooking expert”.

10

Boston Consultancy Group Matrix (BCG Matrix)

Dalda is a cash cow where by providing Dalda Foods with continuous source of revenue..

The entire product range alone accounts for 80 % profitability of the firm.

High

Market

Growth

Low

Market

Growth

High Market Low Market

Share Share

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Repositioning: Need for Repositioning

The brand Dalda entered the Pakistani banaspati market in 1952 and launched Dalda

Cooking Oil in 1981. Since then there haven’t been much changes in the 4 Ps of Dalda

Cooking oil and Banaspati. 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. This proves that all through out Lever Brothers Pakistan have

maintained their conservative strategies in marketing Dalda Cooking Oil. Neither

environmental factors nor changes in consumer trends have been taken into consideration

while marketing the brand. One of the reasons for this is the strict policy structure and

dictation of all goals and strategies by Unilever International.

Although consumers all over the country have great faith and trust in the brand name and

quality still its perceived as an old brand. It’s viewed as cooking oil or banaspati used by

older generations and one that does not fit the lifestyles of younger people. This is the

primary reason why Dalda has lost its market share to Habib and Tullo. Habib Cooking

Oil has the youngest image in the mind set of the consumer, as it was the first one to

market cooking oil in trendy, disposable plastic bottles. Soya supreme and Dalda trying

to keep up with competition also introduced plastic bottles. However, only Habib owns

this trait in the mind of the consumer. Foreseeing, this shift towards modernization of this

market Tullo has introduced Tullo Gold in the market. They are using younger models

and lending the line extension- Tullo Gold a very trendy and modern look.

Trying to topple over competition Dalda came up with Dalda Lajawab and Dalda Crisp

n Dry in 1997 and 1998. However, this diversification failed miserably as the consumers

could not differentiate between the taste, 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.

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Diversification growth makes sense when good opportunities can be found outside the

present businesses. A good opportunity is one in which the industry is highly attractive

and the company has a mix of business strengths to be successful. Dalda with Lajawab

and Crisp n Dry tried the concentric diversification strategy. They sought new products

that had technological and marketing synergies with the existing product lines, even

though the new products could have appealed to a different consumer group altogether.

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.

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. One of our observations is that there is hardly

any difference between the package color or design. All the brands have pretty much the

same look. 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.

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Proposed Marketing Strategy

Line Modernization

Even when the product line length is adequate, the line might need to be modernized. The

issue is whether to overhaul the line, piecemeal or all at once. A piece meal approach

allows the company to see how customers and dealers take to the new style. It is also less

draining on the company’s cash cow. This is the reason why we have planned a

piecemeal approach for repositioning Dalda. In this, we would be continuing the

marketing of Dalda (VTF) banaspati, Dalda cooking oil and will stop manufacturing and

selling Dalda Lajawab and Crisp n Dry.

In rapidly changing product markets, product modernization is carried on continuously.

Companies plan product improvements to encourage customer migration to higher

valued, higher priced items. LBPL will try to do a similar thing with Dalda through the

introduction of flavored oils. 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. 10,000/-

plus.

Segmentation:

Market segmentation at the level of “segment marketing” will be practiced for Dalda in

order to increase targeting precision. It is recognized that buyers differ in their wants,

purchasing power, geographic locations, buying attitudes, and buying habits. However, it

is not possible to customize the offer/communication bundle to each individual customer.

Therefore, Dalda will try to isolate some broad segments that make up the market for

different items on its product line. For example, health conscious consumers for Dalda

cooking oil with vitamin E. Similarly, 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).

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Preferences

Research indicates that the edible oil and banaspati market has distinct preference

clusters, the natural market segments. Some consumers look for pure banaspati with a

rich taste and smell, there is simply no way that they want to give up on the typical,

cultural taste of their food. Along with them are consumers who are very health

conscious and are not ready to compromise their healthy diet patterns under any

circumstances whatsoever. Then there are nuclear families with working mothers who are

trying to build trendy and convenient eating habits. Thus, the best solution for Dalda is to

have a separate product positioned in each different segment. Dalda banaspati for the first

set of consumers, Dalda cooking oil with vitamin E for the second and Dalda flavored oil

for the working mothers.

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Bases for Segmenting Consumer Market

Geographic Segmentation

The market for oil and banaspati is highly commodity driven. Moreover, the perceived

difference between various brands is very little. Therefore, Dalda has to ensure easy

access and availability or else it would lose out to competitors.

Keeping in mind the strategic importance of a good distribution network, LBPL has

divided Pakistan into six geographical locations. These include Karachi, Lahore,

Hyderabad, Faisalabad, Islamabad and Multan. The neighboring areas of these

metropolitan cities also report to the above mentioned six branches.

Demographic Segmentation

The target audience will be primarily females starting from the age of 20 to round

about 45 years of age.

For Dalda banaspati and cooking oil the income strata would be Rs. 4000/- plus.

However, the new flavored oils would be targeted at the upper strata of Rs. 10,000/-

plus. As the loose oil/banaspati consuming segment comprises around 50% of the

market, therefore, Dalda junior would continue targeting this segment.

Psychographic Segmentation

The entire product range would be targeted at females leading a trendy and modern

lifestyle. Flavored oils would especially be marketed to working women looking for

convenient and smart recipes.

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Behavioral Segmentation

We will try to increase the occasions of oil and banaspati consumption. Soon after

Moharrum the marriage season will begin. This will be a good opportunity to cash on

the seasonality effect.

Through the introduction of flavored oils, we will be inducing new usage patterns.

Following are the extra uses for this category:

1. Can be used for grill basting.

2. Can be used in salad dressings, dips, mayonnaise, etc.

3. Can be used as a drizzle in presentations.

4. Can be used in soups and stews.

5. Can be used for shallow, griddle and deep-frying.

6. Can be used for sauntering vegetables, sea foods and meats.

7. Can be used for brushing pizza dough

8. Can be used for adding lemon flavor to curry.

9. Can be used for marinating meat.

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Placement

Edible oil and Banaspati is highly commodity driven. The final selling price is greatly

dependent on the prevailing world oil prices. 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.

In order to cash on the shelf space all through out the year LBPL lays great stress on

having a strong distribution system. It has Six Branches one each in the cities of Karachi,

Hyderabad, Multan, Faisalabad, Islamabad and Lahore. Each branch has a branch

manager to whom several Assistant Branch Manager Report. Under each Assistant

Branch Manager are Lever’s Distributor Managers. Each Distributor Manager is

responsible for Five Distributors of Lever Range of Products. The entire inventory leaves

the factory and goes to the depot where each distributor has already submitted the total

week’s requirements.

Bearing this in mind we strongly believe that Dalda is suffering at the hands of growing

competition. To counter this we would improve the current shelf placement of Dalda by

offering higher margins and substantial trade discounts.

Higher margins would be tied with the sales delivered/achieved.

For Example

Sales exceeding Rs. 100,000/= would entitle the retailer a commission of 5% of the

total Rupee Sales.

Similarly on the sales of 100 units of the five liters pack the retailer would be given

five extra units free of cost. 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.

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Pricing

Edible oil and Banaspati market is extremely price conscious. The entire product range is

perceived to be premium priced. This is mainly because of the margin pressures and the

high quality expensive ingredients. LBPL has no say whatsoever in determing the quality

standards and the ingredients used in the manufacturing process.

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. This will make the prices of

Dalda more competitive as the fluctuations in the market prices will be absorbed in the

final selling price.

We will maintain the current price of the existing product range. It is given in the

following table. However, Lajawab and Crisp n Dry would be withdrawn from the

market. The price of flavored oils would be as follows:

Dalda Ginger n Garlic – Rs.130/- for 1.5 liters.

Dalda Lemon - Rs. 130/- for 1.5 liters.

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Current Market Prices

BRAND Category Package

Size

Actual Price

Rs./-

Price After

Discounts

DALDA OIL 2.5 liters 168/- -

OIL 5.0 liters 320/- -

Bottle Oil 1.5 liters 109/- 100/-

Bottle Oil 3.0 liters 197/- 185/-

GHEE 2.5 liters 168/- -

GHEE 5.0 liters 320/- -

Crisp’n’Dry 1.5 liters 109/- 100/-

PLANTA OIL 2.5 liters 160/- -

OIL 5.0 liters 320/- -

HABIB OIL 2.5 liters 169/- 162/-

OIL 5.0 liters 323/- 308/-

Bottle Oil 3.0 liters 330/- -

Bottle Oil 5.0 liters 500/- -

GHEE 2.5 liters 161/- -

TULLO OIL 4.5 liters 330/- -

T. GOLD OIL 2.5 liters 165/- -

OIL 5.0 liters 315/- -

SOYA

SUPREME

OIL: 1liters 165/- -

RAFHAN OIL 2.25 liters 190/- -

OIL 4.5 liters 300/- -

20

Promotion

Seeing the current market perception of Dalda, we have decided to change the Brand

personality of Dalda. It has always been seen as a very motherly brand, a brand which has

been used generation after generation. The tag line “Jahan Mamta Wahan Dalda” was the

last repositioning given to this brand which yet again has its root from the motherly

foundation.

We strongly feel that Dalda needs to take a diametric turn around in the message that it

passes on to its consumer.

The following are the steps we have planned.

A teaser campaign for the new position would be designed. This campaign would be

strictly focused on the novelty of Dalda. The 7-second advertisement would create

brand awareness for the new line extension of flavored oils. This particular variant

would be marketed only to a select group of consumers belonging to the upper strata

of Rs.10, 000/- and above.

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. These ads will try to portray a very trendy and

modern setting, care would be taken to choose younger and fresher looking models.

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.e. May, June and July.

A newer aspect of Dalda will be brought into light in the coming year. This will

reflect on the social responsibility effort those LPBL practices on its various brands.

Dalda would be granting 10 students of Home Economics College for Women a

sponsorship worth Rs. 150,000/- each. The scheme would start from January 1, 2001.

Through this effort Dalda will be able to create a good name in its future target

market. Females graduating from the institute formulate a potential consumer

segment.

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Promotion Costing

1. Teaser: A 7- second TV commercial would be aired for one month (June).

40 spots would be aired two to three times a day, in the time slot of 6:45 p.m. to 7:45

p.m. Research has indicated that this time slot gives the highest reach of the target

audience. The total cost of this campaign would come up to Rs. 2.1 million.

2. Dalda Ka Dastarkhan: The total cost of thirteen episodes on TV and a quarter year

running on FM 100 would cost Rs. 15 million.

3. Print And Billboard: Total costing would sum up to Rs. 14-16 million.

4. Scholarship: Ten scholarships starting next year would cumulate a total of Rs. 1.5

million.

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