Marketing Plan

Table of Contents

SITUATIONAL AUDIT...............................................................................................................................................4
MARKET ANALYSIS.................................................................................................................................................4
PRODUCTS ANALYSIS.............................................................................................................................................7

Page 1 of 40
 Marketing Plan

1. Executive Summary

BASF Pakistan (Private) Limited (BPL) is a subsidiary of BASF AG, Germany which is a
world’s leading chemical company. BPL is a joint venture of BASF AG (51%) and local
shareholding (49%). BPL manufactures a large portfolio of product for textile manufacturers
offering solutions to processes such as sizing, pre-treatment, dyeing, printing and finishing. One
of these products on which the market plan is made for the year 2006 is binders. The brand name
of BPL’s binders is Binder ET and it is used in Textile printing process. Binders are used in the
textile industry to apply on the surface of the fabric after it is dyed. Unless the binders are
applied on the fabric along with a thickener the fabric will loose the dyed color and will fade
while washing. Textile industry is the biggest industry in Pakistan and also one of the largest
purchasers of processed chemicals. There are several manufacturers of binders in Pakistan but
the three main competitors to BPL are Clariant, Sandalbar and M.B.Dyes. BPL currently holds
the largest market share of binders in Pakistan. However, due to growing demand in textile
industry there are many small players emerging and the existing competitors are also growing
strong threatening BPL’s market share. BPL will work to defend its market share and has set
objectives followed with appropriate strategies in order sustain its market and position. BPL’s
current market share is 46% and according to sources the accessible market for binders will grow
at 5.2% in the year 2006. BPL aims to increase its sales with the market growth and also to
increase the profit margin by 1.5%. In order to achieve the profit margin it will lower its
operating cost by 10% and reduce financial and administrative cost by 1% each. To achieve these
targets BPL will have to maintain its superiority in quality as it always had and with new pricing
strategy of giving customers rebates on large quantity purchases as well reduction in packaging
cost. New industrial distributors will be appointed who can provide better technical assistance
and service. BPL will uplift its promotions conducting trade shows, seminars, improving public
relations and giving product advantages such as free trials and discounts. A strong action plan is
proposed which will be followed by control measures in order to keep a check on the
implementation of the plan. These checks will help improve the integration between all
departments as well as suppliers and distributors.

Page 2 of 40
 Marketing Plan

2. Corporate Background

BPL’s core business in Pakistan includes manufacturing of Textile chemicals, Leather chemicals
and Unsaturated Polyester Resins. It has a product range of over 100.

BPL offers a huge portfolio of products to the textile industry. In other words textile industry is
the biggest consumer of BPL’s products. Beginning from strengthening the yarn to be woven
into cloth to finishing, solutions are offered for all textiles manufacturing processes such as;
sizing, pre-treatment, dyeing, printing and finishing. The product Binder ET on which this
marketing plan is based belongs to the business unit offering products to the printing segment of
textile industry.
The Production Plant of BPL, situated at Landhi, Karachi (business capital of Pakistan), was ISO
9001:2000 standards certified in 1998. Uniform global safety procedures based on modern
technology are adhered to and strict measures are taken to safeguard the environment from the
dangers of chemical waste and pollution (BPL, 2004).

Page 3 of 40
 Marketing Plan

Situational Audit

Market Analysis
The size of the chemical industry which is accessible to BPL Textile Products is approx 4140
mio PKR (BPL Marketing division 2005). This market comprises of small, medium and large
size textile units.
Textile industry itself is the biggest industry of Pakistan, since Pakistan is an agriculture based
country and its major crop is cotton (ranking 4th in total world’s cotton production). The total
output of textile in Pakistan is 4600 mio sq meter of fabric. There are total 600 textile processing
units. This industry is largely export oriented and major contributor to country’s total export.

Textile chemicals
The textile industry uses a large number of textile chemicals for processing of different types of
textile fibers, natural as well as synthetic. Total value of textile chemicals used in Pakistan is
about PKR 2.0 billion annually (Prospects of Chemical industry in Pakistan 2003).
The chemicals used in the textile industry are soaps, detergents, caustic soda, softeners, wetting
agents, emulsifiers, biocides, thickener, binders, acids, dyes & pigments, waterproofing agents,
foam stabilizers, optical brighteners, stabilizers, hydrogen peroxide, bleaching powder, soda ash
and sodium carbonate.

Page 4 of 40
 Marketing Plan

Production Capacity
There are several units manufacturing textile chemicals. Table 1 shows the capacities of textile
and tannery chemicals of eight major producers.

Table 1

Source: Prospects of chemical industry in Pakistan 2003

BPL (BASF) has products to offer for softeners, wetting agents, emulsifiers, thickener, binders,
and dyes categories. The total chemical market of these categories is PKR 4140 mio [table 2]
which is also the total accessible market for BPL in terms of its textile chemical product
portfolio. Out of this total market BPL holds 21% share which makes it 2nd largest player in
textile chemical industry.
If we limit our analysis to binders market in Pakistan, BPL is market leader in Binders with its’
46% share. BPL’s Binder ET market is PKR 1242 mio [table 3]. BPL share of Binder ET market
is 46% with sales of PKR 579 mio in 2005.

Page 5 of 40
 Marketing Plan

Table 2: Texti

Size of accessible market for texti

Players

BASF
(Source: BPL Marketing division)

Players
Clariant Table: 3 Product Binder’s players

Size of accessible market for Binder ET is PKR 1242 mio

Sales in PKR mio Share in %
BPL 579 46%
Clariant 348 28%

Others
Cognis
Sandalbar
M.B.Dyes
236
50
29
19%
4%
3%

Source: BPL Marketing division 2005

Sandalbar
As can be see from table 2 that there is a very close competition in binders market. All the
players in this market are strong and not only defending their shares but also quite aggressive in

M.B.Dyes
terms of gaining market share.

Ciba

Floerger Page 6 of 40
 Marketing Plan

Products Analysis

Binder: - is used in Textile printing process. It is applied on the surface of the fabric after it
is dyed. Without application of binder the dyes will bleed and come out while washing. Besides
enhancing color fastness it gives a soft and pleasant surface to the fabric. It also gives a
resistance to fabric ageing. Binder is a slightly viscous liquid. It is combined with another
chemical product named “Thickener” to give desired results during application.

Binder ET - the brand name of BPL, holds highest share both in terms of sales and profit margin
among all textile chemicals that BPL offers. It covers both medium and large size textile
industries that are focused on producing high quality fabric for home market as well as for
exports.

Since its inception in 1969 BPL holds majority share of Binder ET in Pakistan Textile Industry.
BPL also holds till date highest capacity for the manufacturing of Binder ET. The raw materials
and the manufacturing process of this product is same across the globe in BASF group
companies. Therefore, BPL is also maintaining the same quality of the product as observed by
other BASF companies all over the world.

Page 7 of 40
 Marketing Plan

2.1. Distribution Analysis

Textile Industry in Pakistan is concentrated mainly in South (based in business capital Karachi)
and in North (concentrated in major cities; Lahore, Faisalabad and Gujranwala). There are also
some scattered units in North East part of Pakistan which borders with China but they are not big
manufacturers.
There are approx 30 major players and 70% of them are located in Karachi (BPL Marketing
division 2005). All major customers of BPL in terms of sales are located in Karachi however; the
customers’ base i.e. in terms of numbers is high in North. BPL manufacturing plant is located in
South in Karachi however; to cater its customers in North it has sales offices in Lahore and
Faisalabad.
As mentioned above that the customers in North, although large in numbers are low in value.
Therefore, it is not feasible for BPL to cater these small customers itself. To serve them BPL has
appointed distributors in North. The purpose of the distribution channel is to provide all efficient
means to the customers so that they have an access to the product and can easily purchase it
(Winer 2004).
BPL holds legal contracts for sale with these distributors and gives them annual sales targets.
Upon exceeding the targets distributors are given special rebates and discounts. BPL uses these
distributors only for logistics. In case customers require technical assistance BPL provides itself.

As shown in Fig.1 there are 8 customers which purchase Binder ET from BPL in large quantities
in the range PKR 5 million or greater. The total sale to this segment is PKR 121 million. This
segment of customers although low in number, accounts to 21% of BPL’s total binders sales.
There are also about 401 small size customers, whom BPL presently serves with three
distributors. This segment is large in number of customers but small in terms of quantity
purchased. Altogether this segment accounts to only 12% of total binder’s sales.

Page 8 of 40
 Marketing Plan

Figure 1: Basis of distribution: in terms of sales of Binder ET

Sa

21% 16%

Source: BPL Marketing division 2005

2.2. Competitive Analysis

400
Number of customers in segment

The type of competition here is the Industry concept of competition where the groups of firms
350
offer a class of products that are close substitutes for one another (Kotler & Keller 2006)
BPL has 3 competitors for Binder ET. They are Clariant, Sandal Bar and M.B.Dyes. Clariant is
the market challenger which 300
holds a market share of 28% while Sandal bar holds 19% and
M.B.Dyes is small with 4% (See fig. 2).
250
M.B.Dyes
Others
4%
3%

200
SANDALBAR
19%
BPL
150 46%

100
CLARIANT
92 mn
50 28%
121 mn
Figure 2: Binder Market Share in 2005

8 11
0 Source: BPL Marketing division 2005

>.5 > 0.25

<0.5
Page 9 of 40

Customer seg
 Marketing Plan

Clariant is a very strong competitor to BPL as it products are also of high quality, closer to
BPL’s, and unlike BPL, to gain the market share it can afford to sacrifices on its price. Reason
being that Clariant product base is large and unlike BPL its sales and profits are not dependant
on a single product. BPL has to maintain a profit margin because 60% its sales to textile industry
comes from Binder ET while Clariant’s accounts to around 29% of its total sales to the textile
industry. The other major competitor is Sandal Bar whose product portfolio is also dependant on
binders, however, being a local company it has low operating cost which enables it to keep its
price low. Moreover, Sandalbar focuses on capturing market by comprising on profit margin too.
In doing so it compromises on quality and so is able to capture market of those consumers which
seek lower quality at lower prices.

Page 10 of 40
 Marketing Plan

2.3. Macro-Environmental Situation

2.3.1. Political and Legal

One of the legal issues that are hurting the textile industry directly and the chemical
industry indirectly is the Anti dumping law imposed by WTO which permits importing
countries to restrict imports for temporary periods if the exporting country is damaging
the domestic industry by selling are very low price. Number of countries in EU, Japan,
and South Korea and have imposed restrictions on Pakistani textiles on anti dumping
charges. This is hurting the textile market abroad and will eventually cause injuries to the
textile chemical manufacturers such as BPL as their accessible market will decrease.
Government of Pakistan has played a role in settling disputes between the textiles
exporters and the importing countries and has also been involved aggressively in
educating the exporters of new trading rules and regulations
Political scenario of Pakistan at present has two main fronts; one is domestic through
extremist group surging post 9/11 scenario creating instability inside. The other is
relationship with neighboring country India. Present government of General Pervaiz
Musharraf is working on both fronts. They are trying to curb extremism on one hand and
on the other improving relations with Indian government.

2.3.2. Economic

The outgoing fiscal year has been an eventful year for Pakistan’s economy. According to
finance ministry (2005) Pakistan achieved a real GDP growth of 8.4 percent in 2004-05,
fifth time in the country’s history that it exceeded 8 percent growth mark and it also
positioned itself as the second fastest growing economy after China in 2004-05. The per
capita income of Pakistan crossed $ 700 mark and it also achieved highest ever
production of cotton (14.6 million bales) and wheat (21.1 million tons) in 2004-05.

Page 11 of 40
 Marketing Plan

However lower interest rates due to expansion of private credit and high fuel prices led
to rising inflation which averaged 9.3 percent during the first ten months (July – April) of
the current fiscal year as against 3.9 percent in the same period last year.

The Government of Pakistan is serious in implementing fast track reform process by

strong macro-adjustment program such as to accelerate privatization, deregulate
industries, bring down tariff structure, adopt international standards, and develop SMEs
(small and medium enterprises).

WTO policies of free trade are proving a threat to major industries in Pakistan including
chemical and textiles. BPL and its other competitors may also face increasing foreign
competition especially from China which has high production efficiency and may steal
the chemical market for textiles at much cheaper rates.

2.3.3. Technological

The industry in Pakistan is fast adopting new technological changes using latest
technology and machinery in order to meet global standards and efficiency in production.
The government of Pakistan has been a strong facilitator and promoter of the IT sector
and it has evolved a new IT policy which is in pursue of developing human resource,
infrastructure development, software industry and promote intensive use of information
technology in trade, homes, agriculture, education, health and other sectors with
widespread use of internet.

Page 12 of 40
 Marketing Plan

BPL continues to re-enforce its position as major player in chemical industry by investing
in infrastructure development and state of the art technology. With the introduction of
SAP based COSMOS software it is now possible to keep track of BPL’s business through
Asia-Pacific. The software provides a standard for all business transactions and processes
ranging from incoming orders to payment collection. This way BPL has linked many of
its suppliers and customers through the software in order to achieve efficiency in
procurement and distribution. This system links BPL to 53 BASF group companies in 14
countries (BPL, 2005).

The factory of BPL conforms to BASF uniform global safety policy based on modern
technology, optimum organizational structure, high level of efficiency and a strong sense
of security among employees. It also has three application laboratories where the finishes
product is tested and also shown for trial to its customers.

Page 13 of 40
 Marketing Plan

3. Opportunity and Issue Analysis

3.1.SWOT analysis

3.1.1. Strengths
BASF’s internationally strong brand name: A strong brand name is itself a strength
for an industrial organization like BPL (Hutt & Speh 2001). BPL enjoys a very
established brand name because of its parent company in Germany, BASF AG. BASF
AG is a world’s leading chemical company with a range of over 1000 products.
Largest production capacity: BPL’s production capacity in terms of producing Binders
is largest amongst all producers in Pakistan. It has a big manufacturing plant in Landhi,
Karachi with state of art technology which allows production efficiency.
High technology implemented from the parent company: BASF worldwide has all its
companies connected with SAP which is a very efficient ERP package in the software
industry. The cost of implementing SAP on its own would have been costly to BPL but
the parent company gave advantage to all its group companies by purchasing umbrella
package from SAP. This reduced the huge implementation cost of BPL and it has to pay
only the user license and maintenance fee.
Raw material purchase from parent company: The raw material required to produce
most products including Binder ET are purchased from the parent company. This ensures
high level of quality.
Technical training from the parent company: BPL’s employees, especially those on
the marketing side receive training from the parent company about how the industrial
consumer should use the product and on what machines to be used so that they can
educate their customers well.

Page 14 of 40
 Marketing Plan

3.1.2. Weaknesses

High dependency on one product: One of the weaknesses BPL has is that it is highly
dependant on the sales of Binder ET. Of the total sales to textiles, Binder ET accounts to
about 64%. This makes BPL so dependant on Binder ET that it cannot afford to lose the
market share neither can it lower its price to maintain or increase the sales as it cannot
afford to lose profit on it.
High overhead costs as compared to local manufacturers: Although BPL had great
advantage from parent company in terms of installation of ERP packages however,
adapting these technologies and sending employees for technical trainings add to its
overall cost on which local manufacturers have an edge on. Since they spend minimal on
these overhead costs and are able to keep the product cost low.
Less sales force than the competitors: One of the major weaknesses that BPL has
against the competitors is that it has a very thin sales force as compared to the
competitors. BPL’s thin sales force is not able to cover all the areas especially where the
customer base is large in number. To cater these large in number but small in individual
volume purchase BPL is heavily relied upon distributors.

3.1.3. Opportunities

Demand from Indian textile market: Indian textile market is growing and the so the
demand for chemical products such as Binder ET.
USA and UK are closing their textile units: This has lead to high potential import from
Asia to the European countries and USA. Although textile industry will be highly
challenged by China it has the capacity to sell high quality textiles at a lower price but the
opportunity for BPL here is that the local textile manufacturers would want high quality
chemicals and for them BPL will be an effective choice.

Page 15 of 40
 Marketing Plan

3.1.4. Threats

WTO regulations of free trade: Low tariffs will give access to international
manufactures especially Chinese who have economies of scale and low cost. This will
affect local industry both on domestic and international fronts.
Local chemical producers are growing stronger: Local manufacturers in Pakistan are
growing in numbers and are also nearly competing in quality. Their growth threatens
BPL of losing its market share in the future.
Growing Anti dumping duties: Stringent anti dumping laws may impact textile export
which might eventually affect BPL’s sales.

Page 16 of 40
 Marketing Plan

3.2.Issue Analysis
BPL has to deal with issues which concern it both internally and externally. One issue that
BPL will have to deal with soon is to build a manufacturing plant in other parts of country as
well. It has one large production plant in Karachi which although has a large production
capacity but it serves customers mostly in the southern part because of easy transportation.
The external issues to deal with are those concerning increasing international competition in
the near future in the wake of WTO. Although Pakistan has taken the stand of protectionism
from international competitors the free trade rules of WTO demand end to protectionism.
China being the leader in cost leadership is threatening the chemical manufacturers as it may
flood the market with its product in the future and come up as BPL’s strongest competitor.

Page 17 of 40
 Marketing Plan

4. Objectives

4.1.Financial Objectives

Increase the profit margin by 1.5%: Current profit margin of BPL is 16% and BPL will
achieve a profit margin of 17.5% in 2006. This will be done by reducing the operating cost
which is the raw material and packaging cost. This cost is 60% of the total sales volume
currently and this will have to be reduced to 50% in order to increase the profit margin.
The accessible market for Binder ET in the textile industry is expected to grow at a rate of 5.2%
according to Board of Investment (2005). BPL will have to defend its current market share of
46% by also growing with market and increasing its sales by 5.2%.
Reduce financial cost by 1%: BPL should try to take advantage of parent company’s global
agreement with financial institutions like Deutsche Bank. If the company shifts all its financial
transaction from other banks to Deutsche bank, it will be able to enjoy the same rates agreed with
parent company. This will reduce cost of running finance by 1%.
Reduce Administration cost: Administration cost comprises of indirect cost of functional
departments such as Finance and Accounts, Human Resources and IT support. Company should
reduce this cost by 1%. This can be achieved by restructuring the department and laying off
redundant jobs.
Sealed other cost: all other cost such as selling, transportation and other operating cost should
be kept at same percentage of sales as last year.

Page 18 of 40
 Marketing Plan

4.2.Marketing Objectives

Defend current market share: BPL should maintain its current market share of 46% in 2006.
The market leader position will be maintained by building stronger relations with existing large
size customers and also attracting new ones.
Expand distributors’ base: BPL should focus on small size customers by appointing
distributors who can provide technical assistance to these customers. This also means that BPL
should increase the number of distributors from current 3 to at least 5. This will enable BPL to
expand its coverage.
Aggressive Promotions: BPL previously did not promote its product aggressively. Many
customer areas have remained untapped because BPL did not approach them. BPL marketing
division will start consumer trade and trade promotions, increase personal selling and increase
Public relations.

Word count =3142

Page 19 of 40
 Marketing Plan

5. Reference

BASF Pakistan Private Limited 2004, Viewed at 20th September 2005,

< http://www.basf.com.sg/apac/PakLtdAboutUs.asp>

Board of Investment Government of Pakistan 2004, ‘Textile Sector, Pakistan Investment guide,
Islamabad’, viewed 23rd September 2005,
<http://www.pakboi.gov.pk/Industry_Data/textile_vision.html

Hutt.M and Speh.T, 2001, ‘Business Marketing Management: A Strategic view of Industrial and
Organizational Markets’, 2nd edn, Harcourt College Publishers, P. 365

Kotler.P and Keller.A, 2006, ‘Marketing Management’, 12 edn, Pearson Prentice Hall, Upper
Saddle River, New Jersey, p. 318

Ministry of Industries, Production & Special Initiatives 2004, last updated 14th May 2004,
Prospects of ‘Chemical Industry in Pakistan, Expert Advisory cell, Islamabad’, viewed at 23rd
September 2005, <http://www.pakistan.gov.pk/divisions/ContentInfo.jsp?
DivID=16&cPath=145_150&ContentID=1196>

Ministry of Industries, Production & Special Initiatives 2004, last updated 14th May 2004, Digest
of ‘Industrial Sectors in Pakistan, Expert Advisory cell, Islamabad’, viewed at 23rd September
2005, <http://www.pakistan.gov.pk/divisions/ContentInfo.jsp?
DivID=16&cPath=145_150&ContentID=1201>

Winer. R 2004, ‘Marketing Management’, 2nd edn, Pearson Prentice Hall, Upper Saddle River,
New Jersey, US, p. 258

6. Bibliography

Page 20 of 40
 Marketing Plan

BASF Pakistan Private Limited 2004, viewed 20th September 2005,

< http://www.basf.com.sg/apac/PakLtdAboutUs.asp>

Barbara.S, 2005, ‘An empirical framework developed for B2B e-business models’, The journal of
Industrial and Business marketing, vol.20, p.218, viewed at 2nd October 2005, retrieved from
ProQuest database

Board of Investment Government of Pakistan, 2004, ‘Textile Sector, Pakistan Investment guide,
Islamabad’, viewed 23rd September 2005,
<http://www.pakboi.gov.pk/Industry_Data/textile_vision.html

Hutt.M and Speh.T, 2001, ‘Business Marketing Management: A Strategic view of Industrial and
Organizational Markets’, 2nd edn, Harcourt College Publishers, Orlando, P. 365

Kay.M 1999, ‘Business to Business Marketing’, Journal of Marketing Science, vol.27, p.281,
viewed 19th September 2005, retrieved from ProQuest database.

Kotler.P and Keller.A 2006, Marketing Management, 12 edn, Pearson Prentice Hall, Upper
Saddle River, New Jersey, P. 318

Ministry of Industries, Production & Special Initiatives 2004, last updated 14th May 2004,
Prospects of ‘Chemical Industry in Pakistan, Expert Advisory cell, Islamabad’, viewed 23rd
September 2005, <http://www.pakistan.gov.pk/divisions/ContentInfo.jsp?
DivID=16&cPath=145_150&ContentID=1196>

Ministry of Industries, Production & Special Initiatives 2004, last updated 14th May 2004,
‘Digest of Industrial Sectors in Pakistan, Expert Advisory cell, Islamabad’, viewed 23rd
September 2005, <http://www.pakistan.gov.pk/divisions/ContentInfo.jsp?
DivID=16&cPath=145_150&ContentID=1201>

Winer. R, 2004, ‘Marketing Management’, 2nd edn, Prentice Hall, Upper Saddle River, New
Jersey, P. 258

7. Strategy

Page 21 of 40
 Marketing Plan

7.1.Porter’s Generic Strategy

BPL will have to adopt the strategy of overall cost leadership for achieving its stated
objectives and goals. The current strategy that BPL has adopted is that of differentiation
(Kotler & Keller 2006) through which they have been able to maintain superior quality as
always, and has been seeking quality leadership and thus so far maintained the highest
market share.
The analysis so far shows that BPL has reached a maturity stage and its sales are
stagnating although neither the profit nor the sales are falling but they are only increasing
at a lower rate. By adopting the cost leadership strategy it will be able to attract more
segments of market so that it serves both; those customers which are seeking superior
quality and are willing to pay high cost and were BPL’s current customer as well as those
which were seeking superior quality but were going for BPL’s competitors because of the
lower price they were offered. This strategy is also important because the two stronger
competitors of Binder ET against BPL which are Clariant and Sandalbar are growing
strongly and local manufacturers especially such as Sandalbar and M.B.Dyes usually take
a large segment of market by selling the lower cost product which is also off course
inferior in quality.
As stated in the objectives BPL will achieve lowest production cost by reducing
operating, administrative and financial costs. BPL will also make sure that in achieving
cost leadership it does not compromise on quality and maintains superiority so that in
making new customers it will also have to retain the existing ones.

7.2.Segmentation, Targeting and Positioning

7.2.1. Market Segmentation

Page 22 of 40
 Marketing Plan

Based on (Shapiro & Bonoma 1983) market segmentation would be done on four
segmentation variables which are Demographics, Operating variables, Purchasing
approaches and situational factors.
Demographics: Here the market would be segmented according to geographical
areas as to which parts of Pakistan should be served. The textile customers are
concentrated mostly in the city of Karachi which is in the south of Pakistan and
the customers here are big businesses which usually purchase in large quantities
from BPL. The other area which has high customer base but small businesses is
the north side of Pakistan with customers scattered in cities like Lahore,
Faisalabad and Gujranwala.

Operating Variables: The operating variables here are concerned with the
purchasing capabilities of the customers. The customers are of all kinds. There are
heavy and medium users who usually buy in large quantities and even light
consumers which have small businesses. BPL caters to all types of users but
prefers heavy and medium users presently.

Purchasing approaches: There are many purchasing approaches by different

customers and the supplier has to understand them in order to capture the market.
BPL serves those customers which are seeking high quality and good service at a
higher price. There are many customer segments present which cannot afford the
high price for Binders and their needs are served by suppliers who make less
superior product at a lower cost.

Page 23 of 40
 Marketing Plan

Situational Factors: Factors which vary on case to case basis such as should the
company focus on large or small orders or should the company serve those buyers
who need quick or sudden delivery should be looked upon. BPL serves both small
and large orders but for those which require sudden delivery depends on location.
If the customers are located in Karachi where the BPL’s manufacturing plant is
located they are able to receive quick deliveries but those located on the north side
of Pakistan usually have to wait for few days until the product is transported to
them.

7.2.2. Market Targeting

Targeting a marketing segment depends on such factors as the maturity of the
market, the competitive structure and the organizations experience in the market
(Cravens & Piercy 2003). BPL has already created a niche market of those
customers who are looking for best quality binders. However there is a potential
market of:
a. Price conscious customer who can compromise on quality
b. Geographically scattered customers whom BPL is unable to serve directly
because of its thin sales force.
This is quite an attractive segment for BPL because it comprises of large number
of buyers.
BPL’s aims to attract customers mentioned on bullet (a) through achieving cost
leadership and thus providing lower price for these customers. BPL can achieve
cost leadership by reducing its operating cost and on the other hand providing
special discounts and rebates to customers on achieving certain purchase volume.

To target geographically scattered customers BPL plan to expand its distributors

base. However, the expansion will bring results only if the newly appointed
distributors have technical skills also. These customers are located mostly in
North in cities like Faisalabad, Gujranwala and Lahore. While appointing new
distributors BPL should also ensure that they have sufficient and suitable
warehousing facility to store Binder ET.

Page 24 of 40
 Marketing Plan

7.2.3. Market Positioning

BPL has positioned its product as the most superior in quality made for quality
conscious consumer. However high quality usually comes with a higher price and
this has kept many customers away from BPL as they consider Binder ET as
highly unaffordable. BPL will have to re-position its brand according to the new
strategies by clarifying the brand’s essence and what goals it help the customers
to achieve (Kotler & Keller 2006).

The new positioning in the minds of the consumer would be that although
Binder ET is of superior quality but still affordable through rebates/discount
policy and packing material refund advantage. Customers should be given this
message that Binder ET is for every textile manufacturer who are themselves
seeking to be quality leaders in their products. This new message will have to be
highly promoted. Since BPL has disadvantage of a thin sales force and to keep its
operating cost lower it does not want to increase the number of sales persons,
therefore they cannot cover door to door customer. The marketing team of BPL
therefore has the strategy to organize seminars, dinners, trade shows so that
majority of the customer can attend and learn about the product. However,
interaction with sales force is still imperative for the trial of products. In this
regard BPL’s marketing team should schedule yearly planners to organize trails at
customers’ premises.

Page 25 of 40
 Marketing Plan

7.3.Marketing Mix

7.3.1. Product Strategy

Binder ET has reached a stage now where there are more and more competitors
coming in and the existing major opponents are also growing their market share.
The sales volume has begun to stabilize and after analyzing the product life cycle
by Haas (1982) the market is being saturated and the product has reached its
maturity stage. Based on (Haas 1982; Kotler 2006) the product strategy at the
maturity stage can be of product modification or replacing the old product with a
new one. This strategy would be hard to adopt because of the nature of the
product such as Binder ET. As it is a chemical product its features or style cannot
be enhanced, however, its quality can be enhanced and as mentioned earlier BPL
is the leader in quality amongst all the competitors. The main strategy here would
be to maintain the competitive edge through superior quality so that Binder ET
remains recognized as the best brand name.
The second strategy would be to install large storing tanks provided by BPL to
customers who buy in large volumes and are more frequent customers.
Previously, Binder ET being a vicious liquid was packaged in small drums
specially made for the product and then transported to the customer. The cost of
drums was also included in the total cost. By installing storage tanks at customers’
premises and supplying material in Lories BPL will incur onetime cost but later
will reduce its total price by eliminating packing drum cost.

Page 26 of 40
 Marketing Plan

7.3.2. Pricing Strategy

The competitors are posing a big challenge to BPL by capturing a large
percentage of market by lowering their prices. As Clariant has a high portfolio of
products for textile customers it is, unlike BPL, not highly dependant on the sales
of its Binders and is therefore quite willing to lower its price and increase its
sales. Competitors like Sandalbar have always been selling at lower cost targeting
a particular segment which looks for lower priced binders of inferior quality. BPL
cannot afford to compromise on its price like Clariant does neither can it degrade
its quality in order to reduce cost and sell at lower price so the question remains
how will it defend its market share and increase its profit margin as stated in the
objectives. BPL will have to lower its price but not by compromising or lowering
the quality or lowering the unit price of product but by giving advantage to
customer in terms of packing cost i.e. with large customers as mentioned above
BPL can install storage tanks thus can eliminates drum cost. To medium and
small size customers BPL can offer to purchase back the packing drums it used to
deliver the material since these drums can be reuse to pack the product. However,
to customer this is an added advantage because they get refund on packing cost.

Secondly BPL can offer rebates and discounts on achieving a set target of
purchase volume. This policy should be across the board for all customers.

Page 27 of 40
 Marketing Plan

7.3.3. Placing Strategy

As described earlier BPL has two different sales channels. One way of
distributing is through its own salespersons and the other is through industrial
distributor. The customers that BPL is serving require technical services. One of
the problems that BPL is facing is that it has thin sales forces in comparison to its
competitors. This makes it difficult for BPL to give coverage to small customers.
These customers currently are being handled by distributors and BPL provides
very basic and minimal technical service to these. The problem can be solved
either ways, that is, by increasing its own sales force or by hiring industrial
technical distributors. BPL does not want to increase its sales force for the time
being since it does not want to increase its operating cost. BPL has to focus on
appointing distributors with technical expertise and than maintaining close
contacts with them.

Now also because BPL wants to expand its customer base by targeting customers
with medium and small demands BPL to adopt the strategy of exclusive
distribution so that it maintains a considerable control over service level offered
by the distributor or any intermediary (Kotler & Keller 2006)

7.3.4. Promotion Strategy

Amongst the promotion mix, sales promotion, public relations and personal
selling are the most important tools for a company like BPL. In the area of sales
promotion BPL will have to carry out trade promotions by conducting trade
shows and also consumer promotions (Peter & Donnelly 2004). Trade shows play
a very important in industrial goods.

Page 28 of 40
 Marketing Plan

The Export promotion bureau of Pakistan conducts trade shows on a very large
scale and many local as well as international customers are invited. BPL will have
to participate in these shows more importantly now because it wants to expand the
customer base and strategies in this regards have to be brought into knowledge of
many customers. The other important area to be looked upon is that of consumer
promotions. BPL will have to induce the consumers to try its product, offering
free trial or probably even selling the first order at a very nominal price. An
important win over competitors can be to offer the customers rebates or trade up
on purchasing larger quantity of Binder ET. This will result in high revenues and
will help great deal in defending its market share.

The other important tool in the promotion mix is Public relations. Public relations
help in influencing the overall image of the organization. BPL has already
influenced its public image. It has a Biological Wastewater Treatment Plant
installed which exhibits a manifestation of Responsible Care. This plant
treats 31,000 gallons of water per day, and has helped BPL to improve
ecological conditions and to meet National Environmental Quality
Standards. 17,000 gallons are reused within the Factory and 14,000
gallons are released to the neighboring village, free of cost (BPL 2005).
The other good initiative that no competitor has taken would be to
introduce a sponsorship program (Peter & Donnelly 2004) for students
pursuing education in many well known Textile institutes of Pakistan. It
can offer scholarships and loans to deserving students.

Because of the high level of service and technical assistance required in

the industrial goods specially one such as binders personal selling is the
most important tool for BPL. According to Haas (1984), personal selling
has great application in industrial market as the customers are relatively
few in number and they can be specifically defined and located. BPL will
have to improve relations and focus more on large size customers.

Page 29 of 40
 Marketing Plan

8. Action Program

Jan 06 Feb 06
Figures 3a and 3b show the monthly Action plan schedule for the rear 2006. They are
now further explained in quarterly periods.
Negotiate one year
contract with raw
January 2006 to March 2006: Appoint 2 new
material supplier
The first quarter will be important because all the necessary plans requireddistributors
to achieve
objectives will carried out in this quarter. Firstly in the month of January there will be a
negotiation from different suppliers of raw material to BPL so that they agree to supply
BPL large quantities at discounted prices. Apart from this discussion with distributors
will also take place in order to carry out Binder ET’s distribution in North and here two
distributors will be appointed. The negotiation with suppliers will have to be finalized
too. From the month of March there will be meetings held with distributors and they will
be carried out every two months.
Discuss agreement with Finalize deal with raw
new distributors material supplier

Page 30 of 40
 Marketing Plan

April 2006 to June 2006:

The second quarter will be marked with aggressive hunt for new customers. There will be
a trade show and seminars will be conducted in Karachi and Lahore and all potential
customers will be invited. In doing so the existing customers will also be served and there
would be large storage tanks installed in the premises of these customers. A meeting with
the distributors will be held in May.

Jul 06 Aug 06
Arrange seminar
July 2006 to September 2006: to announce
The new customers will be Free
given trial offers
free trials of theto scholarship
product with the required technical for
service and training so that they are satisfied before purchasing the product. In the same
new customers textile engineering
month the bi-monthly meeting with distributors will take place. The month of August and
students
September brings a start to new admissions in college and universities in Pakistan.
Seminar will be arranged in Karachi, Lahore and Islamabad to announce scholarships for
textile engineering students.

Monthly meeting
with all distributors Page 31 of 40
 Marketing Plan

October 2006 to December2006:

BPL expects new customers to do business with it by August. Now once BPL has made
new customers it will have to retain them and grow its business. In October BPL will ask
its new customers if they want the storage tanks to be installed in their premises. If these
customers are satisfied with BPL’s binder they will accept the offer because it will help
them purchase in large quantities and store so that they get discount on large purchases.
BPL celebrates the family day in the month of November. It would be a good idea to
invite all the customers on this day in order to gain their loyalty. In month of December
there will be a review of the objectives and targets set and how far have they been
achieved.

Page 32 of 40
 Marketing Plan

9. Controls
The action plan is followed by effective controls measures to be carried out in order to
ensure the effectiveness of the marketing plan. A good integration between all the
departments is required in order to achieve the target. A number of measures to be taken
are follows:
• Check on the all the costs related to production: The operating costs, financial
costs and administrative costs will have to be checked through out so that they are
maintained according to the stated objectives.
• Monthly sales report to be issued: A sales report on total unit sales have to be
issued to check any movement in the sales. If sales are below target than strong
steps will have to be taken by the marketing department.
• Report on new customers: A report will be issued bi-monthly about new
customers. If the report shows a positive trend of customers growing in number
than this means that the plan is working well.
• Bi-monthly meeting with the distributors: There will be bi- monthly meeting
with the distributors to check their performance and finding out if they require
any technical service.
• Check on market share movement: Around mid-year the percentage of market
share movement will be monitored. If BPL has defended the market share or done
better than that than its fine otherwise, any drop in the market share will send a
strong message to the marketing team.
• Year end Comparison: The most important comparison will be done at the year
end to see if the stated targets are achieved on is there a large difference between
the stated and the actual.

Page 33 of 40
 Marketing Plan

10.Projected profit and loss

Profit and Loss Statement of Binder

Sales Volume
Distribution cost
Operating cost (raw material and p
Other variable manufacturing cost
Contribution Margin - 1

Fixed Manufacturing Cost

Tranportation cost
Selling Cost
Contribution Margin - 2

Other Operating expenses

Administration cost Page 34 of 40
 Marketing Plan

Assumptions:
Textile chemical market will grow at 5.2%
Market size for Binder ET in 2006 will become 1307 mio PKR existing 1242 mio PKR
BPL will defend it share of 46% (which means achieve sales target of 601 mio PKR) AND increase profit margin from 16% to 17.5%

Profit and Loss Statement of Binder ET for the year 2006 projected

Percent of total
PKR mio sales volume
Sales Volume 609
Distribution cost 18.27 3%
Strategy to have agreement with major raw material
supplier for bulk purchase. Gaining huge discounts
Operating cost (raw material and packing cost) 304.5 50% and reducing operating cost by 10%
Other variable manufacturing cost 12.18 2%
Contribution Margin - 1 274.05

Fixed Manufacturing Cost 24.36 4%

Transportation cost 12.18 2%
Selling Cost 12.18 2%
Contribution Margin - 2 225.33

Other Operating expenses 9.135 2%

Administration cost 12.18 2%
In 2006 govt is announcing interest rate cuts.
Another opportunity is that BASF global company
has agreement with Deutsche Bank for financial
services of all group companies therefore better
Financial cost 21.315 4% rates will be available.

Earning before tax 182.7

Tax @ 45% 76.14
Profit 106.56 17.50

Page 35 of 40
 Marketing Plan

11.Contingency Plan
While working on this marketing plan there are many possible unforeseen circumstances
which are to be looked at and a contingency plan is proposed for them. Oil prices have a
larger impact on the cost of raw material purchase by BPL. In the event of hyper increase
in oil prices BPL will have its impact on the operating cost because of increasing cost of
raw material and also because of exchange rates risk which will cause the Pakistani rupee
to fall against the dollar. To deal with this issue BPL will have to sign a whole one year
contract by taking a forward cover on any price fluctuations, that is, BPL will set a price
with the suppliers which will remain constant through out the year under any
circumstances.
The other major threat to BPL’s marketing plan is from the competitor’s side. Local
manufacturers may respond by lowering their price, even sacrificing their own profits in
order to steal BPL’s market share. BPL in this case would not go for price wars as it will
maintain its superior quality to win the customers and carry on its product strategy which
will give customers an advantage over packaging cost and high volume purchases.
According to the plan BPL will only appoint two distributors in order to serve the
customers. In case the demand goes beyond the plans and the customer base increases
BPL will appoint more distributors according to the need at that particular time.

Page 36 of 40
 Marketing Plan

12.Conclusion

Looking at the macro environment the demand for BPL products including Binder ET
will be growing in coming years as the textile industry is growing in wake of
competition and creating a large accessible market for chemical manufacturers like
BPL. Strong economic growth of Pakistan also ensures healthy environment but
increasing competition is a threat to BPL’s share. However BPL has a lot to be
optimistic as it is the market leader in terms of market share of binders and it has
strong brand name as well as updated technology to beat its competitors. The aims
and objectives set for the year 2006 are realistic and achievable if the all the strategies
are carried out with care and as planned with necessary controls and action. The
product quality has to be maintained as it is; price advantage has to be given to
customers on packing as well as quantity purchases, distribution channel has to widen
and more aggressive promotion has to be carried out in order to achieve the target.
With these strategies the target market has also increased and BPL will have to tap
this market in order to maintain the market share. For the smooth working, controls
along with a contingency plan are made in order to see the marketing plan through in
the year 2006.

Word count = 3309

Page 37 of 40
 Marketing Plan

13. Reference

Bonoma.T and Shapiro.B, 1983, ‘Segmenting the Industrial Market’ (Lexington, MA: Lexington
Books)

Craverns.D and Piercy.N, 2003, ‘Strategic Marketing’, 7th edn, McGraw-Hill/Irwin, New York,
P.135

Haas.R, 1982, ‘Industrial Marketing Management’, 2nd edn, Kent Publishing Company,
Massachusetts, USA, Pp .169-239

Kotler.P and Keller.A, 2006, ‘Marketing Management’, 12 edn, Pearson Prentice Hall, Upper
Saddle River, New Jersey, pp.54-288- 300-444

Peter.J and Donnelly.J, 2004, ‘Marketing Management: Knowledge and Skills’, 7th edn,
McGraw-Hill/Irwin, NY, Pp.123-124

Page 38 of 40
 Marketing Plan

14.Bibliography

Barbara.S, 2005, ‘An empirical framework developed for B2B e-business models’, The
journal of Industrial and Business marketing, vol.20, p.218, viewed 2nd October 2005,
retrieved from ProQuest database

BASF Pakistan Private Limited, 2004, viewed 20th September 2005,

< http://www.basf.com.sg/apac/PakLtdAboutUs.asp>

Board of Investment Government of Pakistan, 2004, ‘Textile Sector, Pakistan Investment guide,
Islamabad’, viewed 23rd September 2005,
<http://www.pakboi.gov.pk/Industry_Data/textile_vision.html>

Bonoma.T and Shapiro.B, 1983, ‘Segmenting the Industrial Market’, (Lexington, MA: Lexington
Books)

Craverns.D and Piercy.N 2003, Strategic Marketing, 7th edn, McGraw-Hill/Irwin, New York,
P.135

Haas.R 1982, Industrial Marketing Management, 2nd edn, Kent Publishing Company,
Massachusetts,Pp.169-239

Kay.M 1999, ‘Business to Business Marketing’, Journal of Marketing Science, vol.27, p.281,
viewed 19th September 2005, retrieved from ProQuest database.

Kotler.P and Keller.A, 2006, ‘Marketing Management’, 12 edn, Prentice Hall, Upper Saddle
River, New Jersey, Pp.54-288- 300-444

Ministry of Industries, Production & Special Initiatives, 2004, last updated 14th May 2004,
‘Prospects of Chemical Industry in Pakistan, Expert Advisory cell, Islamabad’, viewed 23rd
September 2005, <http://www.pakistan.gov.pk/divisions/ContentInfo.jsp?
DivID=16&cPath=145_150&ContentID=1196>

Ministry of Industries, Production & Special Initiatives, 2004, last updated 14th May 2004,
‘Digest of Industrial Sectors in Pakistan, Expert Advisory cell, Islamabad’, viewed 23rd
September 2005, <http://www.pakistan.gov.pk/divisions/ContentInfo.jsp?
DivID=16&cPath=145_150&ContentID=1201

Page 39 of 40
 Marketing Plan

Peter.J and Donnelly.J, 2004, ‘Marketing Management: Knowledge and Skills’, 7th edn,
McGraw-Hill/Irwin, NY, USA, Pp.123-124

Page 40 of 40