Essay About Tetra Paks Strategy And Company Tetra Pak Italy

Tetrapak
Tetrapak
1. What are the important features of the Italian milk market?
The segmentation of the Italian milk market in 1999 was in a process of change. The market
shares for the semi-skimmed milk and the newcomer enriched milk were growing in contrast
to the full fat milk.
The biggest growth in the last 5 years can be seen by the market share of semi-skimmed milk,
more than 30% growth. The sales for skimmed milk are also growing but not so much, only
5% for plain milk. For the newcomer product enriched milk the 100% growth can be notice.
It is the clear signal that the enriched milk has been accepted in the market and it is just a
question of time only, when this product plays a significant role on the milk market.
The clear biggest market share can be reached by full fat milk, about 60%. However the mar-
ket share for full fat milk declines from year to year. Over the last 5 years the sales of full fat
milk decreased by 9%.
2. What is Tetra Paks strategy towards this market?
The company Tetra Pak Italy uses a key account management structure to support a closer
working relationship with the strategic customers.
To the customer of Tetra Pak belong the top three milk producers. For one of the top produc-
ers, Pontero, is Tetra Pak an exclusive supplier. Tetra Pak Italy works very closely with the
customers together.
Tetra Pak offers different strategies for specific milk products. This differentiation strategy is
very important for the profitability in face of shriveling milk market.
Tetra Pak produces different cartons for different product classes, from low to premium
goods.
3. How well did Tetra Pak diagnose Ponteros market share problems?
Based on Tetra Paks analysis Pontero had lost the market share on its competitors. As exam-
ple the important segment for full fat milk are the families with children.
As next critical point was identified the declined milk market. Particularly the full fat milk
segment gets smaller, because of the decreasing number of children.
The structure of the products has change. Tetra Paks proposed to Pontero to access the mar-
ket with the enriched milk, which seems to be growing. The new milk category is profitable
and is accepted in all age customers. The content of the new milk product cannot be copied so
easily by competitors.
Tetra Pak has analyzed the market not just from general point of view, but especially from the
point of view of Pontero.
4. How viable was Fortinas “enriched milk” solution? Why did Pontero reject it?
The Fortinas proposal regarding the extending of the Ponteros product portfolio is based on
the negative development of the milk market and the current problems with the decreasing
market share and margins. The results of the analysis are definitely logical, but it does not fit
to the philosophy of the Ponteros company together. Pontero does not accept an “artificial
milk” as own product. Pontero would like to stay by natural quality of milk without any addi-
tional ingredients.
Pontero was so disappointed, because after the long year relationship Tetra Pak should know
the philosophy and product line of the key customer. If Pontero started an adds in TV against