4. 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
7. Competitor Analysis – Italian Packaging Industry
Tetra 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.
8. 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
9. 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
10. 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.
12. 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
13. What are the real problems
behind the drop of market share?
14. Italian Milk Industry Overview
Milk Industry
Segmentation
Full Fat
Semi-
skimmed
Skimmed Enriched
57%
17%
19%
7%
Market share by segments
Full fat Semi-skimmed Skimmed Enriched
0%
20%
40%
60%
80%
100%
1995 1996 1997 1998 1999
Market trend by segments
Full fat - Plain Semi skimmed - Plain
Skimmed - Plain Enriched Milk - All
Mature and concentrated market
Increasing trend of Enriched milk
15. Italian Milk Industry Overview
- 5,000 10,000 15,000
Oct/Nov 98
Feb/Mar 98
Oct/Nov 99
Feb/Mar 99
Shelf place trend in shops
Pontero Filo Andina
18.0% 16.0%
10.9%
13.0%
9.3%
12.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Market share evolution
Pontero Filo Andina
0
5
10
15
20
25
May-98
Jun-98
Jul-98
Aug-98
Sep-98
Oct-98
Nov-98
Dec-98
Jan-99
Feb-99
Mar-99
Apr-99
May-99
Jun-99
Jul-99
Aug-99
Sep-99
Oct-99
Nov-99
Average Sales per shop
Pontero Filo Andina
0
1
2
3
4
5
Buyer Power
Supplier
Power
Substitutes
Degree of
rivalry
New entrants
Threats for Pontero from intense competition
16. 60
29
21
0
10
20
30
40
50
60
70
Pontero Filo Andina
Number of outlets
24%
31%
45%
30%
24%
27%
19%
52%
23%
25%
26%
37% 37%
19% 21%
30% 30%
40%
23%
37%
0%
10%
20%
30%
40%
50%
60%
-35 years
old
35-49 +50
years old
1%2
people
3 4 5 & 5+ No
children
-6 years 6-15
years
Consumer research
1999 Pontero 1999 Andina
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Best quality
perception
Today's buyer Spontaneous
recall
Named as first
brand
Pontero Brand Profiles
1998 1999
Pontero’s performance
Strong distribution network and brand perception
But losing advantages in some segments
17. 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
18. 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
19. Reasons of falling market share:
Less effective distribution.
Sales drops.
Ignore new market trends.
21. 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 Pontero
1
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
22. 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 Pontero
1
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
24. Improving sales by aggressive marketing mix
PRODUCT
New packaging New multi-function design Develop milk substitutes
Skimmed milks to
niche markets
Micro-filtered milk
25. Improving sales by aggressive marketing mix
PLACE
Increase trade discount New channels
26. Improving sales by aggressive marketing mix
PROMOTION
Promotional TV Ads Social responsibility
activities
Social events
Celebrity testimonial
27. 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
28. 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
