Tetra pak casestudy

Tetra Pak Case studyThe challenge of intimacy with a key customer

Group 2David, Toichiro, Angela, Mansoor, Joe,

Andy

Company Profile

Performance Evaluation

Marketing Challenges

Solutions Assessment

Implementation

Proposition

Content

Tetra Pak – Company profile

Tetra Pak’s packaging products

Establishment: 1952.

Founder: Dr. Ruben Rausing.

Home country: Sweden.

World’s largest producer of

aseptic carton packaging

Swedish company

Company Profile




Implementation

Proposition

Content

Buyer Power

Supplier Power

SubstitutionRivalry

New entrants

-1

1

3

5

Five Forces– Italian Packaging Industry

Strong competition and relatively high buyer power

Competitor Analysis – Italian Packaging IndustryTetra Pak Combibloc Elopak

Background • Market leader of carton package• Innovator of aseptic

Second largest of carton package

Vision to become the world leader in non-aseptic segment.

Market share

80% aseptic carton 10% carton share

Products Cartons, equipment, services

Cartons, packaging systems

Carton & plastic systems, plastic packaging

Sales 1999 (World)

7 bil EUR 767 mil EUR 483 mil EUR

Strategy Expand to plastics •Expand to plastics•Low price &

new design.

Expand to plastics

Potential threats from Combibloc in Cartons market with aggressive pricing strategy and new designs.

Tetra Pak’s SWOT Analysis

• Market leader in Italian carton (80% market share).

• Innovator of aseptic technology.

• Global knowledge base in liquid foods industry.

• Long history and sole partnership with Pontero.

• Key supplier for all biggest Italian milk companies

Strengths

• Primarily dependent on diary products.

• Declining sales in Western Europe

• Prices higher than competitors

• Weaker position in plastic market

• Potential crack with Pontero.

• Non-customer focused orientation.

Weakness

Tetra Pak’s SWOT Analysis

• Growing plastic pkg market

• Rise of new “enriched milk”

business.

• Increasing demand of space-

saving package.

• New private milk labels

Opportunities

• Trend of lower cost packaging.

• Reduction of full-fat milk demand.

• Relationship with Pontero in danger.

• Intense competition with new aggressive competitors.

• Drop of sales in Western market.

Threats

Tetra Pak’s Organizational structure

President & CEO

Chief Technology Officer

Legal Affairs

Chief Technology Officer

Legal Affairs

Legal Affairs

Plastic Division

Processing Division

Carton Division

Market CompaniesMarket CompaniesMarket Companies

AsiaAmericasEU & Africa

Traditional organizational structure which focuses on sales and profits.

Lack of focused customer-oriented marketing unit.

Company Profile




Implementation

Proposition

Content

Tetra Pak’s Marketing Challenges

Challenge of intimacy with key customer (Pontero)

Pontero asks for marketing advice for growth

Combibloc waits for a chance to replace Tetra Pak

→ Potential crack with Pontero (KEY CHALLENGE)

Challenge of rising competition & declining market

Combibloc aggressively aims to cost reduction

Plastic market becomes more intensive

→ Potential threats from competition

What are the real problems

behind the drop of market

share?

Italian Milk Industry Overview

Milk Industry Segmentation

Full FatSemi-

skimmedSkimmed Enriched

57%

17%

19%

7%

Market share by segments

Full fat Semi-skimmed Skimmed Enriched 1995 1996 1997 1998 19990%

20%

40%

60%

80%

100%Market trend by segments

Full fat - Plain Semi skimmed - Plain Skimmed - PlainEnriched Milk - All

Mature and concentrated marketIncreasing trend of Enriched milk

Italian Milk Industry Overview

Oct/Nov 98

Feb/Mar 98

Oct/Nov 99

Feb/Mar 99

- 5,000 10,000 15,000

Shelf place trend in shops

Pontero Filo Andina

0.0%2.0%4.0%6.0%8.0%

10.0%12.0%14.0%16.0%18.0%20.0%

18.0% 16.0%

10.9%13.0%

9.3%

12.0%

Market share evolution

Pontero Filo Andina

0

5

10

15

20

25Average Sales per shop

Pontero Filo Andina

Buyer Power

Supplier Power

SubstitutesDegree of rivalry

New entrants

0

5

Threats for Pontero from intense competition

Pontero Filo Andina0

10203040506070

60

2921

Number of outlets

-35 years old

35-49

+50 years old

1%2 people 3 45 &

5+

No child

ren

-6 years

6-15 years0%

10%20%30%40%50%60%

24%31%

45%

30%24% 27%

19%

52%

23% 25%26%

37% 37%

19% 21%30% 30%

40%23%

37%

Consumer research1999 Pontero 1999 Andina

Best quality perception

Today's buyer Spontaneous recall

Named as first brand

0%10%20%30%40%50%60%70%80%90%

Pontero Brand Profiles1998 1999

Pontero’s performance

Strong distribution network and brand perceptionBut losing advantages in some segments

Pontero’s SWOT Analysis

• Market leader in full-fat,

skimmed and semi-skimmed.

• Extensive national distribution.

• Diversified product portfolio.

• Strong relationship with leading

packaging company

Strengths

• Losing market share.

• Losing shelf space.

• Higher production costs.

• Declining margin in premium products.

• Narrowed brand positioning.

Weakness

Pontero’s SWOT Analysis

• Business expansion

opportunities

• Growing semi-skimmed segment.

• Potential enriched milk segment

• Growth of alternative beverages.

Opportunities

• Declining full-fat milk segment.

• Growing substitutions for milks.

• Brand damage if wrong move.

• Increasing private label milks

Threats

Reasons of falling market

share:

Less effective distribution.

Sales drops.

Ignore new market trends.

Company Profile




Implementation

Proposition

Content

Advantages Disadvantages Eva

Abandon Enriched milk altogether

•Protect Pontero’s brand image.

• Ignore a new trend of market.•Do nothing to recover

market share.• Impact to Tetra Pak

business.

2.5

Reintroduce enriched milk with a twist

•Catch the trend of new market.•May recover share loss.•New business for Tetra Pak

•Potential risks to brand image.•Threaten relationship

of Tetra Pak and Pontero1

Aggressive plan to improve Pontero’s current operations

•Do not against Pontero’s philosophy.•Recover Pontero’s share

loss.•New business for Tetra Pak

•High investment in marketing

4

Addressing Solutions

Advantages Disadvantages Eva

Abandon Enriched milk altogether

•Protect Pontero’s brand image.

• Ignore a new trend of market.•Do nothing to recover

market share.• Impact to Tetra Pak

business.

2.5

Reintroduce enriched milk with a twist

•Catch the trend of new market.•May recover share loss.•New business for Tetra Pak

•Potential risks to brand image.•Threaten relationship

of Tetra Pak and Pontero1

Aggressive plan to improve Pontero’s current operations

•Do not against Pontero’s philosophy.•Recover Pontero’s share

loss.•New business for Tetra Pak

•High investment in marketing

4

Addressing Solutions for Pontero

Company Profile




Implementation

Proposition

Content

Improving sales by aggressive marketing mix

PRODUCT

New packaging New multi-function design Develop milk substitutes

Skimmed milks to niche markets

Micro-filtered milk


PLACE

Increase trade discount New channels


PROMOTION

Promotional TV Ads Social responsibility activities

Social eventsCelebrity testimonial

Suggestion for “Enriched milk”

Enriched milk is new trend of the market but against Pontero’s philosophy.

Enriched Milk Acquisition

Develop in separated brands to avoid brand conflicts

Other actions for Tetra Pak in future

Evolve current organizational structure

Establish independent marketing department to work more

strategically with customers

→ Avoid another “Pontero” in the future

Align with customer’s business strategy

Implement a CRM system

Thank you

Tetra pak casestudy

Business

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