Friday, May 25, 2012

Failure of Dairy Queen Milk as Brand

“Failure of Dairy Queen Milk as a Brand”





Abstract:
From centuries, Milk has been considered as an important part of daily diet of many people around the globe. It has both nutritional and dietary benefits. Having a glass of milk requires no limits of age. People of all age groups consume it everyday. Pakistan is an agricultural country where the availability of raw materials in the form of milk is very convenient. Taking advantage of this fact, many national and multi-national companies started their operations in Pakistan related to dairy products. Among them are Nestle and Haleeb Foods Limited, who got immense success in this industry. They are the pioneers who introduced packed milk for the first time in Pakistan. Haleeb Dairy Queen Milk is a well known brand of Haleeb Foods Limited which is introduced for the first time in 2000, to cater the segment of drinking milk in Pakistan. Despite of its uniqueness, Haleeb Dairy Queen is not as successful as it is expected to be. In the following case study, we will go through the analysis of Haleeb Dairy Queen Milk as a brand.

History of Haleeb Foods Limited:

Haleeb Foods Limited was incorporated in July, 1984 by the name of Chaudhry Diaries Limited. At that time, the company was the first one who introduces the latest technology with highly equipped machines for the production of Milk. This equipment was purchased from Holland. In 1986, the flagship brand of HFL was launched by the name of Haleeb milk. The idea behind the introduction of Haleeb Milk was that, at that time fresh milk can’t be preserved/safe for a long period of time without refrigerators. Even being preserved in refrigerators, the milk will lose its freshness & even taste. For that reason, packed milk Haleeb with highest quality standards preserved in Tetra pak have been introduced that can be safe for a longer period of time even without refrigerators. The shelf life of such milk is three weeks. Haleeb therefore positioned itself as pure, hygienic packed milk that have longer life.

Since then Haleeb has been established as a brand that is today known everywhere. Today, as an ISO 9002 certified company, Haleeb is the dominant market leader of UHT milk in Pakistan by capturing 42% share.

The other brands that have been introduced by HFL are:



1997:                   Haleeb Asli Desi Ghee
1998:                   Haleeb Cream, Candia Skimz Milk Powder
1999:                   Candia Milk, Candia Skimz Liquid Milk
2000:                   Tropico Juice Drink, Haleeb Dairy Queen
2001:                   Haleeb N'rish Instant Full Cream Milk Powder
2002:                   Haleeb N'rish Fortified Instant Full Cream Milk Powder
2003:                   Candia Tea Max Dairy Whitener, Haleeb Butter, Haleeb 
                             Plain Yogurt, Haleeb Lassi Drink
2004:                   Haleeb Good Day Pure Juice, Haleeb Fun Day Juice Drink,
                            Candia Candy'Up Flavoured Milk
2005:                   Haleeb Cream With Honey, Haleeb Tea Max with 
                            Cardamom, Haleeb Labban, Haleeb Good Day (Mix Fruit,
                            Red Grapes, Mango Pineapple)
2006:                   Haleeb Reshmi Pack, Candia Classic, Skimz Pouch,Tropico
                            Nectar
2007:                   Haleeb Cheddar Cheese


Another milestone that is achieved by HFL is the usage of Tetra pak as their packaging which gives them distinctive position among all other competitors. HFL also declared as the first company who lowers the bargaining power of milkmen as suppliers by setting up their own farms and own cattle for getting milk which gives them more control over the quality of raw materials that they used for the production of milk. All these factors and wide range of products that are offered by HFL makes it Pakistan’s no.1 & fastest growing food company in Pakistan.

Haleeb Dairy Queen Milk:

Haleeb Foods Limited has introduced Dairy Queen Milk in 2000 to increase the consumption of packed milk & to diversify the market. The reason behind this diversification is that Haleeb is marketed as tea making milk and there is huge potential and gap present for the drinking milk. HFL has avail this opportunity and has introduced half-liter pack that is affordable at economical prices. Another reason was that market of their flagship brand Haleeb was stagnant. Hence, Dairy Queen Milk was launched to increase their market share and to boost the consumption of packed milk.

Haleeb Dairy Queen Milk has identified huge market in Pakistan with similar wants, geographical location and buying attitudes and has segmented the market on the basis of geographic, demographics and psychographics of the consumers. Dairy Queen targets the whole country, free from any age limits, income levels, gender specification and social class. Dairy Queen has used value segmentation scheme.
Dairy Queen is providing best quality hygienic milk at an affordable price. Dairy Queen is providing value to its consumers by delivering the best at a lowest price. Means Dairy Queen targets those customers who prefer packed milk for drinking purposes.

At that time, milk is sold either directly through milkmen or in tetra packs. The concept of purchasing milk from milkmen in our country is high because people prefer to buy because they think that tetra packs cost is relatively high and the quality of milk in tetra pack is not as fresh as milkmen milk. On the other hand, what has been done by milkmen is that they add substantial amount of water in milk, which dilutes it and affects its purity. The point of differentiation that has been created for Dairy Queen Milk by HFL is high quality milk with low price. The price is very competitive and there are no competitors in the market that provides such high quality milk at such economical prices. The major competitors of Dairy Queen Milk are; Nestle Milk pack limited, loose milk shops & powdered milk. The price of Dairy Queen is relatively lower than both the competitor brands but higher than the price of loose milk. So HFL has established its value in the minds of its customers based on cost & quality. Dairy Queen is positioned as: “Fresh and hygienic drinking milk at a very reasonable price with new convenient packaging”.

Furthermore, to provide quality product to final consumers of Dairy Queen Milk, HFL has established good system of production procedures. Apply Intensive distribution strategies so that a quality product should be available to final consumers with the help of good coordination between all tiers of a supply chain. Its production process starts from the collection of milk that is collected either by sourcing it by establishing Village made collection Centers where after checking the quality of milk by sales agent is accepted. Also to big farmers special vehicles have been sending to their door steps to collect milk. HFL also have their own farms and cattle from where milk has been obtained. After collection it has been sent to procurement centers from where it is finally sent to the factory for further process which includes standardization, homogenization, UHT treatment and packaging it is sent to the distributors for further delivery to retailers who finally makes it available to the end users. Regarding to distribution they are using two types of channels; direct & in direct for effective distribution in such a vast region of Pakistan. Promotion of Dairy Queen Milk has also been done in an effective manner and big advertising companies like Orient McCann, MPL and Asiatic advertising have been contracted for this purpose. And promotion has been done on all types of media. In a nutshell, HFL at the time of introduction of Dairy Queen Milk has done immense efforts to make it a successful brand.

The Problem:

Haleeb Dairy Queen Milk got failed in the first attempt. The reasons of its failures are; it’s inconvenient packaging initially which leads to customer dissatisfaction & complaints. Its packaging is such that it gives the impression of poor quality; means the color, the labeling and design didn’t give impression of good quality as did other competitive brands. It also faces cannibalization from flagship brand Haleeb because HFL has failed to aware its customers properly about Brand Dairy Queen Milk and to
create its image as nutritionally drinking milk as against tea whitening features of Haleeb Milk which is one of the valid reasons of its failures. People perceive that it is same as Haleeb Milk and only difference is that it is for low income segment because its price is less so it must be a low quality product. As a result of it, its image got worsened in the minds of customers which also affects the image of Haleeb Milk, and it faces a sudden lose in its sales.

Management Outcome:

To cope with such situation HFL has sidelines Dairy Queen Milk brand and started efforts to give another life to their Haleeb Milk. This is the reason that we hardly finds any ads on T.V related to Dairy Queen Milk and also it is not available in all shops because company is paying less attention towards it. These are some of the reasons that restrict the success of Haleeb Dairy Queen Milk as a brand.

Question:

What steps should be taken by HFL to re-position its brand Dairy Queen Milk?

References
Following are the references that I used during our research:-
1.                 Mr. Mohsin Akbar
2.                 Mr. Ahmed Mustafa Mitru.
Websites are as follows:

              

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