What Olfrute did wrong

Published: July 25, 2010
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Nestle is the current market leader in juices. Can it hold its place on top?

Nestle has been having a hard time in Pakistan for the past few years. First, Aquafina by Pepsi snatched its market share of mineral water then Olpers by Engro foods sidelined Nestle’s Milkpak to become the market leader of that category. Now Engro Foods is set to give Nestle a tough time again. Olfrute is a juice brand recently launched by Engro foods. The question is can Olfrute take the market share of Nestle Fruitavitals or will it share the fate of Shezan and Freshers?

Freshers failed largely because of poor distribution even though the taste and packaging were different and nice. Shezan has an image of being a low quality juice and this is the reason for its failure. Olfrute is no doubt cut throat competition for Nestle Fruitavitals But so far Olfrute hasn’t been a big hit. Engro foods relied on the brand equity of Olpers by naming the juice ‘Olpers Olfrute’ but this confused positioning. Olpers is a diary product and fruit juice is totally different category thus Olfrute should not have been leveraged on Olpers brand equity.

Moreover the taste is similar to Nestle Fruitavitals. It offers nothing unique to offer to consumers. I don’t think anyone would be able to distinguish between the two on the basis of taste alone. However, Olfrute does have a characteristically unpleasant smell. The price level of the new juice has been kept high. I feel that the introductory price should have been lowered to create a niche in the market.

Besides this, the television commercial is absurd and fails to make any impact on consumers.The brand is endorsed by Nadia Jamil, a lady in 30s romping in fruit orchards like a teenage lass. Are they trying to show that Olfrute revitalizes you so much that you feel younger? If so then there are better ways to execute this idea. For brand activation, they should have come up with something out of the box. I doubt that this ad has any recall at all.

The packaging also fails to attract attention. It has white background just like Olpers but honestly Olpers packing had that vibrant red in it to attract the attention of the buyers. Its seen that decisions are now made in stores by the consumers thus Engro foods should have come up with packaging that would have pushed the consumers for its impulse purchasing. In a nutshell, Olfrute doesn’t offer much to consumers, in terms of taste, packaging or promotion.

But it has managed to get Nestle Fruitavitals active. They are not taking this attack lightly. Maybe they have learnt from past mistakes and are not taking their position of being the leader in the juice category for granted. Recently they have commenced extensive merchandising in shops and frequent airing of television commercials. Billboards have also been put up everywhere.

Let’s see who wins the battle this time. Will Nestle be left to be a follower or will it carry on being the leader?

afia.jamal

Afia Jamal

A business school graduate who enjoys analysing marketing trends.

The views expressed by the writer and the reader comments do not necessarily reflect the views and policies of The Express Tribune.

  • Bilal

    Agree with you there. Olfrute has no distinguishing feature. It is the same as Nestle juices (which, when compared to the imported brands, is sub par). A wasted opportunity. Recommend

  • SZ

    Do you have any backing figures to prove your point or is this all based on a hypothetical study?Recommend

  • sidra

    my brother works for the marketing of engro foods. ill pass on the message :PRecommend

  • http://www.dataflowgroup.com Khurram Zahid

    Olfrute cannot the reach the position which fruitavitals has reached. Building a brand is not a nick of time, it will take Engro years to build a strong position in already saturated juice market.Recommend

  • http://awgilani.wordpress.com Syed Abdul Wahab Gilani

    I’m not a Marketer but as a business school product I scrutinize ads.
    As far as the ad goes I asked many friends “Did you savvy this advertisement?” They all said “NO” and one said “BIG NO” :)
    I like it. To me, it represents the lightness i.e. the contradictory frame movement.

    Yep, the product in taste offers no differentiation.
    I’ll be waiting for your article scrutinizing “Omore” another product if Engro FoodsRecommend

  • Ammar Habib Khan

    Fresher is way better than stupid and overpriced nestle/engro alternatives.Recommend

  • Syed mohammad zubair azam

    wellllll….. a very very nice and realistic analysis…..
    @ SZ…… Dear sometimes Figures are not necessary to justify ur point of view… U just need to have an eye on emerging consumer trends and what companies are doing and whether they are assessing these emerging trends or not…. I appreciate this article… its a very very nice one….Recommend

  • Marium Sultan

    Time will eventually provide you the answer of your last question. as long as differentiation is concerned, i agree that taste is same but except its orange flavor. if you have tried it then you would find it less bitter then nestle orange juice. but you are right abt the confused positioning point. Recommend

  • Aleem sulehri

    well explained,Afia.being a business school student and marketing analyst i fully endorse ur idea,selecting brand name and packing these are crucial to attract customers.Recommend

  • uXuf

    I second SZ in that in the absence of any figures to support, this piece looks very opinionated, and I daresay, biased.Recommend

  • Think therefore

    I disagree that the fruit juice market in Pakistan. And yes figures may nor be needed everywhere but they were needed to back that claim.
    All in all I agree that it would be interesting to see the strategic decesion making of a premier national company vis a vis an international behemoth food company with years of experience is a diverse set of markets. Please follow up on this. Thanks for writing this.

    @Afia Jamal – Could you also discuss the artificial flavour in marketed spice mixes? Not to mention the “same-ness” in so many of them?Recommend

  • Saud

    “Engro foods relied on the brand equity of Olpers by naming the juice ‘Olpers Olfrute’ but this confused positioning. Olpers is a diary product and fruit juice is totally different category thus Olfrute should not have been leveraged on Olpers brand equity.”

    I do not agree with the above. I feel leveraging a successful brand to launch a new brand/product is a good strategy specially when the company name is not widely known. How many consumers do you think know that Olpers is a product of Engro Foods? Relating Olfrute to a successful brand Olpers gives confidence to customers when they reach for the product on the shelf.

    Now Pakola Milk is a bad example of leveraging a brand for two reasons. It has been etched in the consumers memory as a green fizzy drink for more than 50 years. Secondly Pakola brand is not being used to launch a new dairy brand but being extended to a completely different line of products. Olpers brand is being used to launch the Olfrute brand, I am sure that the support of Olpers brand will be faded out as the Olfrute brand gains strength.Recommend

  • Asad

    this is her general opinion derived by her own perception. people should share extracts from research studies, focus group, and/or some sales data to support the viewpoint. these findings are easily attainable. market trends are never analyzed like this. i wonder if the writer being business graduate; actually wrote this against the spirit of business studies.Recommend

  • Afia jamal

    I havent claimed anywhere in my article that sales of olfrute are lagging behind or its a big failure so why figures??? I m just scrutizining its brand activation. I really believe these are the factors that might adversely affect its sales. Recommend

  • Afia jamal

    thank you people for your appreciation!Recommend

  • Afia jamal

    I havent claimed anywhere in my article that sales of olfrute are lagging bahind or its a failure . Iam just scrutizining its brand activation. and i dont think figures are required for expressing of ones opionion. i really belive these are teh factors that will have an adverse effect on its sales. Recommend

  • Zainab Imam

    I think just naming is “Olfrute” was enough..people are familiar with the addition of “Ol” and Omore’s name also starts with an O and that other low-fat milk…that also starts with an O. So there wasn’t any need to add Olpers.

    Very, very interesting read. Looking forward to more. Recommend

  • KQ

    Not bad… :) Good work….As far as the taste is concerned, I actually liked it. The Ad., i believe it had positives for NJ and not Olf. Nice brainy work though. Keep it up. Recommend

  • talha

    Big question mark for Nestle and Engro.

    Fresher, pulpy orange and some of the imported juices are far better then these so called two big brands. They should introduce some of the juices other then in tetra pack. Tetra pack has already been in negative feeling.

    Don’t go for high end price as a perception for better product; try to get the brand loyalty.Recommend

  • Ajlaan Raza

    in response to Olfrute being endorsed by Olpers, id like to add that i have actually stood at wholesale stores and witnessed people asking for Olfrute, not by its name but as “Olper’s ka juice”. Hence i personally feel that whether or not the ad attains recall, the name Olpers Olfrute defenately gives it a push to compete within such a saturated market.Recommend

  • Dr. Dejavu

    Come on everybody ! Open your eyes ! They are all cheating us ! both fruitavitals and olfrute are NOT JUICES. Both Nestle and Engro are selling drinks, not juices. Its all water, sugar a bit of pulp and flavor. If u observe closely, on all fruitavitals: its written “Necter”. The only pure juice by Nestle is orange !

    My advice : DO NOT CONSUME THESE PRODUCTS ! They have a very high sugar content and they are far from REAL FRUIT JUICE.Recommend

  • http://omarhkhan.blogspot.com Omar Hasan Khan

    @Dr. Dejavu: Actually I have high doubts on Nestle’s orange juice being actual juice as well…orange juice doesn’t go bad…Nestle’s orange “juice” does! You’re right though!

    I agree with Saud with regard to leveraging the Olpers brand; it won’t confuse positioning because it’s about leveraging the trust that consumers have in the Olpers brand.

    Nonetheless, Olfrute can do with better packaging, but its in-store POS material is pretty decent so it definitely catches the eye. However, and correct me if I’m wrong, but it’s only available in large SKUs so it’s missing out on those impulse purchasers momentarily.

    Anyway, I feel it’s too early to say that Olfrute has done anything wrong because it has not failed yet. Plus, I don’t think the juice market is saturated at all! The category is small so it seems saturated, there’s always room for big brands. Olfrute has not done anything original till now (nor has Omore), nor do they have to because a minute percentage of people will be able to point fingers and say “they copied so and so”. Olfrute will really have to be innovative in their offerings if they are to give Nestle a fight!Recommend

  • Narejo

    I purchased Olfrute Orange. Very nice and fruity taste like Almarai Juices and totally unlike Nestle’s sugary juices…

    Engro has again launched a very good product. They just need to market it more aggressively to compete with established brands like Nestle.

    Btw unlike milk and water, Juices is one category where Nestle is not a market leader in terms of consumer perceptions. It is very hard to convince people to change mineral water or packaged milk brand due to perceived safety of foreign sponsor. I dont think same will apply in case of Juices.Recommend

  • AKPK

    well being a pakistan consumer I will support my domestic corporation….
    why not to support domestic industries…
    people having behavioural or morally attached with domestically produced products will push out foreign products…
    Simply you will find such a market segment who will morally support local product.. so in above case Nestle should prepare itself for…Recommend

  • umaima

    i totally agree with you about the packaging and taste. The ad is not a surprise after a poor campaign for omore. The packaging is a major letdown as after witnessing olper’s milk,olper’s cream , and owsum one would expect Engro to display the same calibre of attractive and niche specific packaging for olfrute.

    However, i donot understand as to how lowering the price would create a niche? its supposed to work the other way roundRecommend

  • Afia jamal

    dude as for people demanding it as “olpers ka juice”,those must b peopl from lower sec and not from upper sec groups . i belive these juices are actually targetted towards premium class and not lower and middle tear of our society. these people wont go in shops and demand it as olpers ka juice for sure. .and man there is perceptual mapping of brands.high price and high quality go together not low quality and high price . consumers certainly want value for every paisa they pay.moreover u need to offer something attrctive to consumers so that they switch only associating your brand with already leveraged brand doesnt work! Recommend

  • Imran Iqbal

    i am sure that like akpk i also endorse that we should buy our local company product and support it because it also give us the edge on becoming a prosperous nation (which we lack altogether) i personally buy and support our local brand if it has the same quality as in imported brands well engro foods has done a good job in giving tough time to nestle keep it up………..Recommend

  • Afia jamal

    Mr imran am not badmouthing about engro’s juice . i just gave my opinion.Recommend

  • http://omarhkhan.blogspot.com Omar Hasan Khan

    Afia,

    There are several types of wholesale outlets, you have the Jodia bazaar type, you have Makro/Metro type. The latter attracts the “upper class” you talk about – and how are you defining the upper class may I ask?

    Secondly, I find it interesting that you think the brand leveraging tactic is flawed considering Nestle’s Fruita Vitals’ success was driven by the fact that the product literally had the Nestle stamp on it – in fact, Nestle uses this tactic for all its products (would Pure Life been successful without Nestle’s tag? Would you have consumed it?) Moreover, many major brands have used this tactic – in some cases the brand has become bigger than the umbrella brand but the association always remain:
    – Tuc by Lu, Bakeri by Lu, Prince by Lu etc.
    – Nike Air Max, Nike Mercurial Vapor, Adidas Predators etc.
    – Pleasure by Estee Lauder, Euphoria by Calvin Klein, Armani Mania
    I hope this helped the brand leveraging argument. The other way of looking at it is: assume Olfrute was launched without the Olper’s tag, and you were the average consumer with no knowledge about Engro Foods, would you have tried it? You’ve got the already established Nestle Fruita Vitals pack right next to it, add the fact that Olfrute’s packaging isn’t that attractive – would the probability of you trying Olfrute not drop lower? I think it would. Just my opinion :)Recommend

  • Afia jamal

    Omer,
    Firstly, upper class means people who have income of 40000 and above, are relatively educated with a good lifestyle and comes to shop from modern trade, both local and international. These include macro/metro and self service outlets in different areas. The jodai bazaars you mentioned are for bulk purchases.
    Well I agree with you its good idea but at times it dilutes the brand essence. Olpers brings in this idea of dairy product, juice is different category. I would like to quote the example of another Pakistani brand Sufi, they have diversified portfolio of products under their brand such as Sufi banaspati, Sufi soap etc. Now you can’t associate Sufi with just one category and thus positioning is distorted of the brand. As in case of lu , they are a biscuit brand and the association works well for it .
    Exactly that’s my point that they failed to tempt consumers through their poor execution. It is not so difficult in case of juice item. An excellent ad and good taste would have done wonders for them.
    I hope I got my point clear, and please correct me if I am wrong!Recommend

  • Abdul Basit

    @ Afia

    Are you sure of the classification of ther SEC for which u argument. For SEC with an average monthly income of 40000 rupees can never be classified into SEC A (which as per my comprehension of your argument is the targeted audience of FruitaVitals as well as Olfrute).Moreover talking of the association of education with SEC there are alot of people in Pakistan that earn way more than 40,000 bucks a month and are not education well enough (The big merchants of Azam Cloth market and the Rex market are the instant examples that flash into my mind).

    Regarding the branding, I think one should not confine itself to the argument of dairy and juice categories are two different categories. As a some friend already very rightly shed light on the concept of umbrella branding that is being used by a numbers of corporate brands, inclusive of Nestle and Olpers. The use of Sufi with the brand like soap and cooking oil adds credibility to the products and not necessarily confusing the customer. Same is the case here in Olpers Milk, Olpers Omore and Olpers Olfrute.

    Further reinforce my argument Nestle NAN (the infant milk formula) and Nestle FruitaVitals are two different categories but use the same umbrella brand that adds value to the offering and does not confuse the customer i.e. the SEC A and above in this regard aswell.Recommend

  • afia jamal

    Dear friend , I was talking about what sec A generally refers to , exceptions do count.
    and I doubt if Sufi brand is a successful one in any of the categories. Nestle claims itself as a a food company but one should not forget Engro foods just recently diversified its portfolio from diary thing and this associated branding certainly seems to be backfiring for them! Recommend

  • Umair Hassan

    I love Nestle Fruitavitals and i just love the apple juice. Having said that, regardless of your observations which are somewhat correct, I’d still say that Olfrute is going to be a HIT if not a BIG HIT mainly because I trust Engro and its team. So far they have impressed me with their strategies and product quality. Its important to analyze what is the target market of Olfrute. I also believe that its a good sign that now companies like Engro are producing products that can act as alternative to NESTLE or other important items. We should support it !Recommend

  • faraz ahmad

    Dear all

    as per my experience olfrute is a quality brand from engro foods alongwith other quality products like olpers,tarang,owsum and tarka(desi ghee)olfrute doesnt need the support of any brand to be launched in the market it has high quality and excellent taste.as compared with nestle i think that olfrute has more natural taste.
    before making any comment we should go in the market and taste olfrute to validate our observations…..
    and i hope that in future olfrute will be the market leader.Recommend

  • Rizwan Liaqat

    I would like to echo the views of Dr. Dejavu above, he is correct in pointing out that the juices (Nestle and others) in our market are actually juice drinks. If I wanted a pure orange juice I would either have to make it myself at home, or buy a foreign brand like Tropicana (which would cost double). Having lived most of my life abroad, when I walk into a store to buy a drink the range of products depresses me. Same old bland juice drinks, Nestle, Minute Maid, Shezan and now Olfrute. I think the market here is wide open for a quality juice product that provides nutritional value and it’s a shame Olfrute can’t capitalise on that. It’s a shame that we live in a country that exports a wide range of fruit and we can’t find quality juices on our shelves. I had the unfortunate experience of tasting Minute Maid orange juice the other day, you would find more orange extract in a Tang drink.

    However I do feel that dairy products and fruit juices can be marketed under the same brand, it is already being done everywhere else. In the Middle East you will find both dairy and juice products marketed by Danone Safi, Al Marai, etc.

    At the end of the day no marketing campaign or packaging will propel sales if the quality is just not there. But ordinary Pakistanis have no concept of healthy food and continue to buy the trash served up by local companies, which is why its hard to see quality products emerging in the foreseeable future.Recommend

  • Saad Durrani

    Afia, either you are too young or too unobservant.

    The market would be “Olper ka juice” based, not the upper tier that you have analyzed. The upper tier has enough resources to choose a premium imported brands.
    It is too early to tell “whats wrong” or “whats right”. You are dead right about the brand activation. But, check the advertisment closely. Nadia Jameel is on a balance, and she runs about like a “lass” only to put balance. Weird idea.
    Olpers milk worked because it has a sweeter taste than Nestle, and it is much creamier. Furthermore, they did extensive promotion when they had to launch Olpers. They distributed it for free at Iftar in signals during the launching year.
    Nurpur launched its juice some years back under Nurpur Fruit Juice. Haleeb also did that with their juice brands. I think it was called Haleeb Good Day. Olpers is a food brand for Engro so it would not hurt that much if they release a fruit juice under its name. The Fruitavitals is also an extension. Earlier, Fruitavitals was released as mixture of Apple and Guava (as far as I remember) nectar. That experiment never worked. So they branded their Nestle nectar & juices line into Fruitavitals. Freshers on the other hand is at growth stage. Minute Maid, I believe did not pick up. That might be a failure.
    Apparently in marketing, seeing is not believing. Tarang looks like a failed product but it is doing great in sales. Pakola looks downright failure but it sells quicker than Pepsi at times. Same goes for Pakola Flavored Milk, it looks as it never worked but it is working.

    Honestly Afia, you write good stuff but you need to be a bit sound in your approach and question your belief before blogging. Analysis is best when its all-rounded, though it should have your thought if you want.Recommend

  • afia jamal

    Thank you so much Saad I ll certainly try next time. Keep reading my posts and giving your much valued honest feedback.Recommend

  • muhammad hammad

    @Afia jamal:

    salam
    i am currently student of MBA , am doing strategic maketing & planning course these days.i just read ur article, i need ur help in making report of course i`ll be very thank ful, i need to make a report on any product failure or to identify any problems in any products or company, let me know if u can

    looking forward for affirmative responce and waiting for ur reply

    thank you Recommend

  • Sidrah Moiz Khan

    I like the article. Although the ad was lame, really, but I liked the song!Recommend

  • Afia Jamal

    @saud contact me on my email id .
    @sidra thank you!Recommend

  • Kay

    call me a richard if u like but this post is very poor in terms of analysis and content!Recommend

  • Waqas Mazhar

    Dear All;
    As you all are well aware that Engro foods Olper is now the market leader when we launched this same comments were there. In case of Olfrute . Yes there were some flaws but “girte hain shah sawar hi maidan-e-jang main” we will inshallah rise again and shine as this is the vision of engro foods a pakistan based multinational company. We should be proud of it.Recommend

  • sahar

    You might want to check you stats before writing an article, Olper never became market leader of UHT milk category. Recommend

  • Ahmed Ali

    In order to make our industries compete globally it is my request to all friends to BE PAKISTANI BUY PAKISTANI

    as according to Michael E.Porter’s Diamond model international firms must first have enjoyed good local demand

    The demand conditions in the home market are important for three reasons:
    1. If the demand is substantial it enables the firm to obtain the economies of scale and experience effects it will need to compete globally.

    The experience the firm gets from supplying domestic consumers will give it an information advantage in global markets, provided that:
    (a) its customers are varied enough to permit segmentation into groups similar to those found in a global market as a whole,
    (b) its customers are critical and demanding enough to force the firm to produce at world-class levels of quality in its chosen products,
    (c) its customers are innovative in their purchasing behaviour and hence encourage the firm to develop new and sophisticated products.
    If the maturity stage of the plc is reached quickly (say, due to rapid adoption), this will give the firm the incentive to enter export markets before others do.

    I think this article is opinionated and one sided.
    I totally agree with Waqas Mazhar that “girte hain shah sawar hi maidan-e-jang main” and i am proud of engro….Recommend

  • Farooq

    i agree with the analysis. in my opinion, it is true analysis. Recommend

  • Jalal

    On the contrary, I love the ad! Didn’t know it was Nadia and that she was 30 years old. The ad does have a nice concept of revitalizing you just when you need it the most. Haven’t tasted it yet, though.

    As far as positioning goes Nestle too has all of these product categories, and more, and yet they’re able to not confuse the consumer. So, perhaps Olpers may want to know how they’re successful with it and they’re not.Recommend

  • Sumair Karar

    Contrary to the writer, the heading should have been what Nestle is doing wrong !

    Nestle’s current attempt to out step Olfrute has led to take quick actions but in their haste all they have been able to do is copy Lacnor’s packaging. There is nothing orignal about what they have done.

    Secondly, their choice of marketing cmapign “The Fruit Revolution” is just a sad publicity stunt. Having a non-existant charachter “Pyaaray Laal” take over the page and launch and activity with poor execution (it crashed the the day of the launch). This by purely an act of desperation !Recommend