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Habib Oil Complete Project
Habib Oil Complete Project
MARKETING PROJECT
NAZISH MUBASHAR.
Prog. M.B.A.
PAK-AIMS
ACKNOWLEDGEMENT
PREFACE
First of all I would like to thank our instructor Mr. Ahsan Umer for
providing me the opportunity to look into various marketing strategies
of Habib Oil Mills Pvt (Ltd). This project has given me a complete
knowledge and practical experience, which will help me in future. I am
also thankful to Mr. Ali Azfar, assistant sales manager of HOM for
sharing his experience and knowledge regarding the marketing
strategies of HOM. His help has enabled me to prepare this report. I
hope that this report will provide you the required information
regarding the marketing strategies of HOM.
ABOUT COMPANY
Habib Oil Mills (Pvt.) Ltd. "HOM" is the largest FMCG Company
exclusively in the vegetable oil & fats sector in Pakistan. The company
produces premium brand cooking oils and Hydrogenated cooking mediums,
and markets the products through its own distribution network, which covers
almost all commercially viable markets nationwide.
The company has strong financial background and has sizable
infrastructure managed by professional staff. It has proven track record in
this business and has plans for targeted prosperous growth in future.
The marketing policy of the company envisages development of brand
loyalties among the customers and consumers through their continued
involvement and participation in series of several promotional activities run
by professional staffs and consultants.
The monthly national cookery contest being the most popular marketing
activity of the company which brings valuable prizes to the winning recipes
every month started 10 years ago and has celebrated its 120th diamond
jubilee contest in Feb. 1999.
MISSION STATEMENT
The company has five years look ahead strategic plan for
progressive target achievement of manufacturing and marketing
89,000 tons of cooking oil and banaspati per annum by year 2003.
Development of necessary infrastructures and staffing for the
above targets including establishment of a new factory at port
Qasim are completing scheduled milestones successfully.
HISTORY OF GROWTH
Incorporated in 1954-55, Habib Oil Mills (Pvt.) Limited was initially
established as an oil expelling unit. The present management took over the
unit in 1978 when it was producing only 5000 metric tons of cooking oil
annually.
The new management carried over major expansion and modernization of
the unit over the years, and converted it into an integrated unit for edible oil
refining, cooking oil blending and production of hydrogenated cooking
medium. The unit after subsequent expansion and modernization has now an
installed production capacity of 58,000 metric tons of cooking oil and
Banaspati per annum.
The products enjoy vast popularity and brand loyalties, and stands first in
terms of market share in this sector nationwide.
The company has achieved a growth of 500% in a ten-year span, which is
primarily attributed to its consistent quality care, and driving successes
from application of needed market strategies.
TABLE OF CONTENTS
CURRENT MARKETING SITUATION:
Marketing situation
Product situation
Competitive situation
Distribution situation
Microenvironment situation
SWOT analysis:
Strengths.
Weaknesses.
Opportunities.
Threats.
OBJECTS
Marketing Objects.
Financial Objects.
MARKETING STRATEGY:
ACTION PROGRAMS:
Growth rate
1998
35 thsd.tons
1999
40 thsd.tons
2000
50 thsd.tons
2001
53 thsd.tons
2002
58 thsd.tons
So the total sale is about 60 thsd. Tons per year. Habib oil is blended oil.
The buyers of this product belong to upper-upper, upper, and middle
classes. Who want good taste in their foods.
Banaspati
60%
Oil
40%
Sindh/Balo.
40%
60%
NWFP
70%
30%
The reason of this consumption pattern which is different from one another
is, literacy rate of sindh/balochistan is higher than other provinces, people
belong to these area know which is better for health oil or ghee. But case is
opposite in Punjab and NWFP. Fat consumption in NWFP is very high but it
is fat from animal (mutton, beef).
COMPETITIVE SITUATION:
Dalda
Uni-lever.
Tallo
Seasons
Sufi
Hamza vegetable.
Kisan
Madina enterprises.
SWOT ANALYSIS
Strengths and Weaknesses of Habib Oil Mills
There are certain strengths and weaknesses of HOM, which are
discussed as under:
STRENGTHS
ISO 9002 Certified:The company has a well-defined quality policy and has successfully
obtained the ISO-9002 quality system certification in the year 1997.
"HOM" is the first company to receive such certification in Pakistan in the
vegetable oil & fats sector.
Good Market Reputation.
The company has good market repute, due its good and consistent quality
products. The logo of the company is Quality Products at Moderate
Price.
Market Leader
Another major strength of HOM is its market share. At the present time
they are the market leaders in edible oil industry with avery good market
share of 42%.
Wide Product Range
Another major strength of HOM is that, it is the only edible oil producing
company, which has that much wide range of products in the market.
Quality products.
It is HOMs policy to provide good quality products to customers at
reasonable prices. It makes all efforts to involve every employee of the
company in the achievement of this objective.
Nation Wide Distribution.
The company has 350 plus distributors all over Pakistan and a fleet of
delivery vehicles consisting of Hino Trucks and Mazda Trucks to cover its
entire supplies. The distribution staffing is designed to have a strong link
between the senior sales staff and the end consumers. This staffing is further
reinforced with CSF (customer sales force) to enhance the contact with the
customers and the market.
Professional Management.
A team of Professional Managers with the following leadership practices
performs the day to day administration of the company. Find opportunities
for constantly challenging and improving personal performance. Reward
and celebrate significant and creative achievement.Develop and appoint
high performing and high potential people to key positions.Communicate
with all constituents openly, honestly, interactively, and on a timely basis.
WEAKNESSES
Lack of Diversification
The major weakness of the HOM is that it deals with only one kind
product, which is edible oil so it cannot diversify from its present business to
some other business.
Less Production Capacity
Another weakness of HOM is that they are not be able to fulfill the
demand of the customers, the reason being that they dont have more
capacity for production.
THREATS.
The Threat of Indirect Competition.
There is a threat and a chance for the Indirect competition that may grow
in future. For example that the companies already producing items can
come in Ghee business.
Dalda Ghee & Sundrop Oil.
The main competitors are Dalda & Sundrop. There is main Threat is from
this side. Due to Price factor and Quality standared these company are
giving high task to Habib Oil Mills.
Unable to Meet Demand:Due to Overdemand the company is not in position to meet the consumer
demand properly. That is a main weakness for the company.
Market Strategies
As far as the market strategies are concerned HOM uses two types of
strategies, such as Push and Pull Strategies. HOM uses the combination of
these two strategies. Push strategy is concerned with the short-term period
and it is usually less expensive and in this strategy the company emphasizes
on customer, while the Pull Strategy is used for long term period and in this
strategy company emphasizes on trade rather than customer.
Market Share
As HOM is the market leader in the oil industry, its market share is 42%.
The market share for other companies is: Dalda 39%, Soya Supreme 12%,
Tullo 10% and for others 7%.
According to the BCG model the company falls in cash cows, because
company is characterized by low growth and high market share and the
business is generating large cash surpluses.
Strategic Tools
Game Theory Concept of HOM
According to the Game Theory Concept HOM always have a check on its
major competitor Dalda regarding its promotional and pricing strategies for
example, when for the month of ramzan HOM reduced its prices by Rs.10,
Dalda also responded and reduced its prices by Rs.15.
Marketing Strategies
Total Market Strategy
To serve the market HOM follows Total Market Strategy and serves an
entire spectrum of the market by selling different sizes of the product to
different segments. The proof is that the company has five oil products in the
market and every product has minimum three sizes.
Early Entry Strategy
HOM was the early entrants in the edible oil market. It entered in the market
in1975; the other early entrants were GCP and Kohinoor. The first company
to enter in this market was Dalda, which is to complete its 50 years of
serving the market. Due to the first to enter in the market Dalda enjoyed
high profits with a production of 150,000 tons and due to the entrance of
other companies the production is now reduced to only 60,000 tons.
Strong Commitment
HOM is doing its business in a good manner and it has a very strong
commitment with the market and its other business operations. If the
company looses its commitment than it will also loose its market share that
is why HOM gives trade discounts to its dealers and focuses on every step of
the competitors.
Market Dilution Strategy
The company sometimes uses the pruning strategy when it is not getting the
desired results from its products. In the past the company had used this
strategy many times, once it was used for Nayab Banspati, which was not
very successful product that is why it was eliminated in the market. The
other products that were eliminated are American corn oil and Habib Punch
pack.
Product Strategies
Positioning Strategies
Multiple Brands
Company has one product in the market, which is related to edible oil, but in
this segment company has multiple brands, which covers the complete
market of edible oil.
Design strategies
Standardized products
Company has standardized products but these products are available in
different sizes for the convenience of its customers, such as 1 liter, 2.5liters,
5 liters, and 10 liters.
New product strategies
Product improvement strategies
Company also follows this strategy and introduces improvement with the
passage of time, such as different flavors, new grate taste and vitamin A, E
& D.
Product imitation strategy
Company some times follow other companies and does not take initiative,
such as HOM introduced corn oil after introducing this product by other
companies.
Value marketing strategy
Quality strategy
Companys basic philosophy is to provide quality products to its customers
and the evidence is the ISO 9002 certification.
Customer service strategy
Company never ignores its customer and always gives importance and value
to them. Company has its own in house research department, which gathers
information related to the customers preferences and sometimes the
company also hires the services of other research firms such as, Aftab
Associates. HOM also provides door-to-door service occasionally and use to
give free samples.