Executive Summary

When you hear the name Dalda the image of quality conjures up in your mind. It provides you quality, which you can trust with utmost faith and a taste, which you have come to relish. Dalda has earned the trust of its consumers over a period of almost 60 years. In fact Dalda is the pioneer of vegetable oil and Banaspati ghee in the country.

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. After Lever Brothers bought it they want to include “L” of Lever in it and thus Dalda born.

In July 2004, Unilever Pakistan accepted the offer of 1.33 billion of the sale of its “Dalda” brand to Dalda Foods ltd. within a few years of its inception, Dalda foods has become one of the largest food FMCG organization in Pakistan leading the local category of oil and fats. In Pakistan, Dalda has now divested into Canola and Olive oil products variant as well.

Food lovers, women cooking in their kitchens, or health conscious, who does not recognize Dalda? When you hear the name Dalda the image of quality conjures up in your mind.

Dalda’s journey into the lives of its consumer started 60years ago when Dalda develop new cooking medium “Dalda Banaspati”. Dalda Banaspati was a healthier alternate to desi ghee without compromising on Aroma or taste. Consumers welcomed this innovation into their lifestyle and became so familiar with the product that Dalda’s name became synonyms with banaspati.

With changing consumer preference, Dalda used its international technology and expertise to innovate Dalda cooking oil and Planta cooking oil. Today Dalda cooking oil and Planta cooking oil has became an essential part of every home and are an exceptional example of health and taste in the entire cooking oil category.

It all started almost 60 years ago when Dalda’s food scientist pioneered a way of preserving the goodness of vegetable oils in a manner which preserved the taste and tradition of ghee but was a healthier substitute thus Dalda banaspati was born. This quality and taste was made available to millions of consumers in the country. Ever since Dalda has kept up the high quality and consumers have responded by always rating it as number one in quality and taste.

Introduction of Ghee/Oil Industry

Ghee industry was introduced in the sub continent in mid thirties, and since then it has grown tremendously in face of all environmental hazards. It has been subjected to serious edible Oil shortages, government inconsistent policies and severe variations between demand and supply in the domestic market.

The country which was self sufficient in edible Oil production (0.154 million MT), till 1960, and paying not a single dollar against the import bill, is today importing well over 1.160 million MT against an import bill of no less that Rs.33000 million per year, being the third largest edible Oil importing country of the world, after China and the European Union. All these imports originated from Malaysia.

During the past 21 years of interrupted and partially half hearted efforts of successive governments since 1979, the country has been able to procure only 0.5 million MT of edible Oil from indigenous resources while the rest of the 1.1 million MT is procured from imports.

The structure of Ghee/Oil industry is just like all the other developing industries of Pakistan. There are certain well-established companies working with good brand names, serving the nation as a whole. Along with them there are certain units, which are working in limited areas, meeting the requirements of these niche markets. Some of the vegetable Ghee mills are working under the control of government and other are held privately.

The raw material required for the production of Ghee/Oil is imported from different countries and this is the biggest imported item in food category. The prices of Ghee/Oil are very much influenced by the duties on these imports and the international price fluctuations of these items.

In early 1990’s there had been a serious crisis in the Ghee industry, and the main reason for this was that production of Ghee was greater than the demand. In this period due to the heavy looses on account of these units government privatize so many Ghee producing units.

Vegetable Ghee is the commercial term for vegetable Oil hardened by the process of hydrogenation. Cottonseed, soybean Oil, Sun Flower Oil, corn Oil, is being mainly used in Pakistan for the manufacturing of Oil/Ghee. Pakistan is importing Palm Oil and Soyabean Oil from America, Indonesia and Malaysia. During 1999-2000 Pakistan imports of soyabean Oil and palm Oil has drastically decreased both in quantity and value. Pakistan imported soyabean Oil worth $75.8 million and Palm Oil $267.8 million in year 1999-2000.

Mission statement:

“To build a mutually profitable relationship with customers, ensuring quality products with continual improvement and innovation”.

Vision:

Vision of Dalda India Pvt. Ltd. is” Five By Five (5x5)” that after every five years we have to increase our selves by five times by the previous position in all the aspects.

Goals and objectives :

The goals and objectives are:

Commitment to quality

To understand customers needs

Strive to be ahead in edible oil sector

Offer healthy products

Continuous research and continuous innovation

Capture market share

To have the strongest distribution network across India.

Introduction

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.

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)

This diagram explains that Dalda is for upper class and the number of its buyer is very small.

The lower most part is local and cheaper brands. This part is for poor people and they bought local and cheaper brands and they are not the users of Dalda. The number of middle class who buys Dalda is more than upper class and less than lower class.

The middle portion is for middle class people, when they have enough money to spent, they buy Dalda, otherwise prefer they go for cheaper and local brands. The number in this class is very high than all other classes.

Dalda for rich

people

Middle class which switch

over in upper

and lower class brands,

by watching money on their pockets.

Cheaper and local brands for poor people

Target market of Dalda Foods

Dalda Food’s products along with detail

Dalda cooking oil

Contents

Dalda is the blend of soya bean, canola and sunflower oil.

Contains essential fatty acids, omega 3 and 6 and natural antioxidants that increase the immune system of the body.

Contain vitamin A & D-3.

S.K.U.s of Dalda Cooking Oil

1. Dalda Cooking Oil 10 liters (Can)

2. Dalda Cooking Oil 5 liters (Tin)

3. Dalda Cooking Oil 4.5 liters (Bottles)

4. Dalda Cooking Oil 3 liters (Bottles)

5. Dalda Cooking Oil 2.5 liters (Tin)

6. Dalda Cooking Oil 1 liter (Pouch)

7. Dalda Cooking Oil 500 ml (Mini pouch)

Benefits and attributes

Dalda cooking oil is the premium quality oil for cooking and frying.

100% cholesterol free.

Dalda cooking oil is easy to digest.

It’s hygienically refined on modern automatic plant that preserves natural goodness of oil and makes food exceptionally delicious.

It is healthy as it contains vitamin A & D along with vitamin E.

Dalda Banaspati

Contents

Made from 100% pure vegetable oil.

Contains vitamin A & D-3.

Also contains VTF (Virtually Trans fat Free).

S.K.U.s of Dalda Banaspati

1. Dalda Banaspati 5 Kg (Tin)

2. Dalda Banaspati 2.5 Kg (Tin)

3. Dalda Banaspati 1 Kg (Pouch)

4. Dalda Banaspati 500 gm (Pouch)

Benefits and attributes

Dalda banaspati is the healthiest banaspati available in country because of country because VTF treated.

Hygienically produced on modern plant, Dalda banaspati contains healthier formula.

In addition Trans fat acids, harmful to health, is below 1%.

Dalda banaspati also contains Vitamin A & D-3 and its rich ghee flavor ensures delicious and wholesome meal.

PEST Analysis

PEST analysis is used to assess what environmental factors are affecting the organization, which of them are most important and how they will effect in next year's. It is an indicator of political, economical, social and technological influences on organization. The analysis of Dalda India Pvt. Lt. is as under:

Political and Legal Factors

Industrial Laws

Industrial laws regarding unions has no impact upon the Dalda India Pvt. Ltd. because no union exit in the organization, but if in future it become so, then the company has to consider these laws in their decision making concerning wage rates, bonuses, and benefits of the employees.

Foreign Trade

This matter will be of a key concern for Dalda India Pvt. Ltd. Because the Dalda India Pvt. Ltd. is importing four different types of oil from Singapore and Malaysia, which are not available locally, but the Government don’t provide any support to import these raw materials and don’t provide any relaxation in import duty upon the imported raw materials. So if Government bring any change in its foreign policy, then it will be very much important to cope with that.

Environmental Protection Laws

Although the laws regarding environment are not very sophisticated in Pakistan but even if they become so, they will not be hampering for Dalda India Pvt. Ltd., because in Dalda India Pvt. Ltd. all the wastes are considered as by products and used or sold. The water is also recycled for reuses purposes. The only emission is of the carbon dioxide, which is within the prescribed range of pollution.

Taxation Policy

The Dalda India Pvt. Ltd. is paying tax each year. In last year the Dalda India Pvt. Ltd. paid income tax 43% of net profit to the Government. But in this year Dalda India Pvt. Ltd. has to pay income tax of 45% of net profit, which is equal for all the private companies.

Employment and Government Stability

Employment is not a matter of high concern for the organization because it is already following all the labor laws. But recently the Government increases the wages of the employees but Dalda India Pvt. Ltd. has not affected by that, because this is a private company. But they are paying more than the Government announced.

Economic Factors

Among the many of economic factors some are more important for Dalda India Pvt. Ltd., the detail of these factors is in following:

Interest Rates

Interest rates increase and decrease has no impact upon the financial performance of the Dalda India Pvt. Ltd., because the company has no loan of any bank. But it in future the company need to take the loan then it must has to consider this issue.

Inflation

At the moment inflation rate does not seem to be very much related matter, because any increase in oil prices will be off set by the increase in price of Ghee and cooking oil. Because there is no close substitute of Ghee and cooking oil, so the sales will not be affected. But if we take it in longer perspective the inflation in the country will increase the cost of production, which will increase the sale price. And at high sale price the product will become in-competitive in the international market if the company will involve in the export. So the pan of export will be adversely affected by the inflation.

Disposable Income

Within the country the demand will be affected if the disposable income will be reduced. Ghee and Cooking oil is a basic food ingredient and its primary demand cannot be eliminated. But other than its direct use, it is also used in bakery and confectionery items and so many other foods whose demand is dependent on disposable. So any decrease in disposable income of the consumers will also be affecting Dalda India Pvt. Ltd. negatively.

Technological Factors

Technology in ghee industry can be divided into two sectors. First is cotton seed and second is ghee mills. The technological factors, which are more concerned with Dalda India Pvt. Ltd., are as under:

Government Spending on Research

Usually in order to support some industry and improve economy, government allocates some fund to R & D. Unfortunately our government doesn’t have any money for R & D. Due to this non-serious behavior of government this sector along with others, is suffering very much. No single mill owner can support R & D especially in the field of Cottonseed varieties. The varieties which now a days are being cultivated are of sub-standard qualities. It gives less recovery and more wastage. There is a need to find out the seeds, which can give better recovery.

New Discoveries and Developments

New discoveries in the field of raw material will be very much beneficial for the company, as it will reduce the cost of production. But, if there will be any change in the technology of ghee mills, or process development than it will be very difficult for the company to coup with that change. In fact the company has made much investment in latest plant and machinery in 1994, and almost 80% of its total fixed cost is stuck up in this area. So adopting any change means a loss of all these assets which is almost unbearable for the company.

Socio-cultural factors

Socio cultural factors like demographics; income distribution, life style etc. can also affect the company in different ways. Lets see which of them are more concerned to Dalda India Pvt. Ltd..

Life Style Changes

The consumption of ghee is very much related with the life styles of people. Now people, all around the world, are becoming more and more health conscious. They are well aware that a high consumption of ghee will increase the cholesterol, which leads to heart disease. That is why, a significant change in the consumption of ghee is being observed in last many months. Although the use of ghee cannot be fully eliminated but if this life style grows at same speed it will surely decrease the demand of ghee but on the other hand the demand of the cooking oil is gradually increase in last many months due to the same reason.

Level of Education

Level of education is directly related with awareness and health consciousness. In countries where education rate is high the ghee consumption rate is low. In Pakistan, as well as in foreign markets the rate of literary is increasing which will effect the organization negatively. High level of literacy will lead to low level of ghee consumption and people started switch towards cooking oil.

SALES INFRASTUCTURE

Distribution of Dalda’s Products.

Factory Store Depots

DistributionsWholesalersRetailers

End Costumers/ Consumers

SWOT ANALYSIS:

Strenghts:

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

2. The entire product range has extremely high brand awareness.

3. The brand recall is as high as 97%.

4. The quality of the product is maintained at high standards under the supervision of Unilever International.

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

Weakness:

1. The brand suffers with an image problem. It is perceived as an old brand and the Consumers are bored with it.

2. In the case of Dalda it poses great difficulties, as it is a regional brand catering to Pakistani and Indian markets only.

3. There has been no innovative packaging change since 1994.

Opportunities:

1. 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.

2. The branded market has been receiving a warm welcome lately in the metropolitan areas of Pakistan.

3. People are becoming health conscious and are switching to brands offering vitamins and cholesterol free attributes.

4. 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.

Threats:

1. Fluctuations in the world oil prices.

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

3. Lately sunflower and Canola based single oils have aggressively entered the market.

4. The unbranded segment comprises an enormous 50 % of the edible oil and Banaspati market. This is sold loose to the rural/lower income consumers.

Boston Consultancy Group Matrix (BCG Matrix)

Question Mark

High business growth and low market share.

It will now market its mass market oils like soyabean, mustard, sunflower and groundnut under the “Husband’s Choice” range

Cash Cow

Low business growth and high market share.

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.

Dog

Low market share and Low market growth

Grand Strategy

New Product / Product Line Development

New Markets

New Customer Segments

Diversification into related or unrelated business

Combination

A mixture of stability, expansion or retrenchment strategies applied either simultaneously.

Difficult for any organization to survive and grown by adapting a single ‘pure’ strategy.

Retrenchment

Organization goes through forced decline by either decline or shrinking the markets, customer segments or business units.

Stability

To maintain the market share

To maintain the Brand Association

To grow slowly and consolidate the position

Porters 5 force model

New Entrants: Low

Buyers bargaining power: High

Suppliers bargaining power: High

Substitute product: High

Industry competitors: High

Quadrant

Quadrant 3

Defensive Strategies

Slow Market Growth

High Barriers to Entry

Weak Financials

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.

Findings and recommendations:

Marketing aspect:

Different problems related to our marketing are:

The only major brand on Warsak road with small competition is Dalda.

On stores of Shami road and D.H.A. Dalda sells it selves but thereDalda have very strong competitors.

There is only one retailer who buys Dalda in Hassan Ghari. It is the single shop in the area, which is selling Dalda to the customers. In past there were more shops but with passage of time they left buying it because of high price.

Strong competitor’s is available on every shop in every area. Their distribution is strong. Even in the shops where only local brands are available. This is because they provide their product on credit and collect money after selling of stock previously provided. Suffola and Fortune are the major threat for the company.

Recommendations: 

Dalda have to strengthen their sales in the areas where its sale is high with low competition and have to make loyal customers.

Main focus should be the areas where, in past, Dalda’s sales were high but with the passage of time it declined, so that the sales reach the peak again.

Areas where it has strong competition, we can sell it through some special discounts or special scheme.

For countering Suffola, Dalda can buy some special places in stores so that they can place our banners and poster there, to attract end consumers.

Another thing is we have to place our product in all small shops, even on credit, so that people of the areas see it and after seeing it they will definitely try it and through this we can sell the product and can increase the market share.

Sales promotion techniques should be used. For instance, in low sales area, Dalda can ask the retailers to reduce their margin for some period of time in return for their shop decoration by Dalda. Moreover Dalda can ask them to keep its product and not those of its competitors in return.

Human Resource aspect:

H.R. is a bit negative side.

Employees are not completely loyal with the company, even some of them are searching for another job.

The new multinational is giving better offers to Dalda’s sales team, as they know Dalda have the best team.

Distributor is also not completely loyal with the company may be because he has another distribution of a multinational Soft-drink and sometimes company’s rigid policies irritates distributor.

  Recommendations: 

Have to change the mind of employees so that they can become loyal to the company and leave searching another better job. For this they need to increase their salaries and incentives.

For our employees they need to make a package that can counter Suffola’s or Fortune’s strategy of hiring Dalda’s employees. For that they have to increase the package and have to change our policies so that their policies become employee friendly.

They have to change the mind of distributors, and need to make them loyal by solving their problems.

For hiring a people we should see their efficiencies not the referencethey re having.

They need to hire people who are interested in job, not the one’s who need job but the one who wants to learn something and do something for company.

The company management should try to arrange workshops, on for managers as well as for sales persons, where they are given training in a fun-way, arrange challenging games and activities and distribute prizes among the winners. This will surely motivate the employees and will in turn help the company, in disguise in retaining the employees.