Professional Documents
Culture Documents
Letter of Transmittal…………………...…………………….…...2
Letter of Acknowledgement………...……………………………3
KOLSON history and background...…………..…………………4.
Organizational structure………...…….....………………………...6
Mission statement……………………...…………………………7
Company objectives……………………...……………………….7
Organaizational culture....................................................................7
Product line and categories.........................……………………….8
Total Organized Biscuits Industry………………...……………...9
Marketing segmentation...............……………….………………10
*Target Marketing............………………………...…...11
* Positioning.......………………………………….…...11
* Brand Positioning……...…………………………….11
* Brand Personality……….……………...……………11
* Market size…………………………..……………….11
Market Share………..………………………..…………………12
Marketing Mix……….………………………………………….13
Products………………………………………………………....15
Critical analysis…………..……………………………………..21
Marketing strategy…………….………………………………...23
Distribution outlet……………….……………………………....24
Advertising……..……………………………………………..…25
1
Sales promotion.…………………………………………………………………26
Market research….…………………………………………………………….…26
Marketing Objectives…………………………………………………………...27
Macro environment………………………………………………………………27
…………………………………………………………………….28
Financial Analysis………….…………………………………………………….29
……………………………………………………………………..30
……………………………………………………………………...31
………………………………………………………………………32
2
Letter of Transmittal
Thanking you.
Sincerely,
Saad Ali Khan ………………….
3
LETTERS OF ACKNOWLEGMENT
HAD INTERVIEWED HIM FORM THE SAKE OF THE PROJECT AND IT WAS
NICE OF HIM TO TAKE OUT TIME FOR US FROM HIS BUSY SCHEDULE. HE
PLANS.
WE ALSO THANK OUR COURSE INSTRUCTOR, Ms. BASMA ALI FOR HER
4
KOLSON HISTORY AND BACKGROUND
Ever since its inception in 1942, as on today, Kolson enjoys the distinction of
being one of the Pioneer food manufacturing and processing industries in
Pakistan. The name of Kolson is synonymous with dynamic an innovative food
products.
Kolson also has a leading edge in manufacturing breakfast cereals that are
innovative and extremely popular among the consumers of all ages.
5
As company hierarchy enters to the third generation, it befittingly coincides with
yet another stunning product, an innovative range of high-class Biscuits. Jam
Hearts, Cream Hearts, Katch and Bravo, being sandwich, crackers and
traditional bakery biscuits respectively that are already fetching consumers'
recognition and appreciation because of its unique and smacking flavor and
texture.
The whole range of Kolson products is made by using latest German, Dutch,
Swiss and Italian etc latest technology and process to back prime raw materials.
The raw materials are procured from the leading available sources in Germany,
Denmark, Belgium and Nederland etc. The high quality Pakistani wheat products,
procured from select bunch of millers, are pivotal in determining the outcome of
high quality products.
As the global economy is taking a different turn in its outlook and demand,
Pakistan can not afford to lag. Kolson is prepared to accept the challenge to be
always one-step ahead of changes in offing. This is our simple promise to our
die-hard and prospective consumers in Pakistan.
6
CURRENT MARKETING SITUATION
Biscuit is popular all over Pakistan during british rule biscuit so popular in the
subcontinent that is now a common breakfast and most in the evening time with
tea coffee and all the day people like to eat and serve to there guest
commonly.most of the biscuit consumed with multinational company .
Pakistan’s biscuits industry is comprised of approximately 25 units in what is
called its organized sector, or the sector that is comprised of regular
manufacturing units that market their products under a brand name and a similar
number in the unorganized sector, or the sector that is comprised of small
bakeries that produce and market their products without a brand name.
Pakistan is one of the leading biscuit consumer in the world.biscuit is a food item
today for 128 million Pakistani .Despite 107.5% in duty sales tax and other
charges it is available to the common man at a price appreciable below any
alternative nourishment and is fast emerging as a preeminent health food.
Study on economic feasibility of biscuit in Pakistan was illustrated from the start
till to date.The flourishing of the biscuit industry in its present form,many attempts
have been made so far on Govt. level and in private sector as well from the last
50 year.The serious efforts began in the late 80’s.With the Govt. encouragement
biscuit was the replacement of the other food in the area were made accordingly
.The successful growth of wheat in the area have been ascertained.the yield
potential and quality of made biscuit have been assessed to be economically
viable.the extent of a suitable area has been identified and finally the production
package for growers has been evolved.
Currently there are some 5 major brand of biscuit available in the market.These
varieties consists the well known brand such as LU , EBM, KOLSON ,BISCONI
and MAYFAIR.
Prices of branded biscuit range from 5 Rs.to 25 Rs(ticky pack, half role and
family pack) keeping a targeted market of household this report has been
prepared. Major portion of the Karachi city able to purchase well known brand
have to go for high quality biscuit available for consumption on the local shops.
7
Almost 50% of the market for users of biscuit in Karachi ,is being held by EBM
through its brands namely followed by 25% market share held by LU 9% by
BISCONI and the remaining 5% by MAYFAIR.
ORGANIZATION STRUCTURE
7-Board of Directors
8- GMS
4- GA’S
RSM
ASM
TSO
SO
SR
DR
8
General Head Marketing
ABM ABM
ABM
Miraj
Hussain
MISSION STATEMENT
To provide a one shop to promote socially responsible life style products while
growing the global market with the conscious.
COMPANY OBJECTIVES
The fundamental objective of Kolson is maximum growth in the food industry.
brand into a completely different category in late 2004 when they diversified their
for new competitors and to make efforts to nip them in the bud, so that in the end
9
ORGANIZATIONAL CULTURE AT KOLSON
At kolson, we believe that responsibility and trust are inseparable. Kolson must
have trusting relationships with customers, owners, employees and society in
general. Therefore a determined effort is made to attend to the Group's
responsibilities in society in a comprehensive and innovative way.
“In my experience, there are close ties between the values you create and the
values you promote. To ensure long-term value creation, kolson’s activities
arebased on responsible and sound business practice in all partsoftheoperation."
- SLANTY - TWITCH
- TWINKLE Cheese balls - SMART CHIP
- CRINKLE PATATO - FRIEND CHIP
- PATATO CHIPS - SNACKER
- LONDON STICKS
- CHATA PATA RINGS
- KATCH
- BRAVO
- JAM HEARTS (Vanilla & strawberry)
- JAM HEARTS (Chocolate)
- CREAM HEARTS
- CREAM HEARTS (Chocolate and Vanilla)
- CHOCO WHEELZ
- FROOT WHEELS
- COCOA BEANS
- HONEY RICE CRISPIES
10
- MACARONI
- LASAGNE
- NOODLES
- SPAGHETTE
- VERMICELLI
OBJECTIVES - VERMICELLI
- VERMICELLI
14000
12000
10000
8000
6000
4000
2000
0
2001- 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009- 2010-
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Assumptions:
11
4. Kolson will also increase its efforts for further penetration but the focus will
be more on the trade push.
KOLSON-FG
Fed globe provides all the promised services & enjoys the position of a strategy
partner for Kolson in Pakistan.
MARKETING SEGMENTAION
Kolson segmented the market according to Demographic, Geographic,
Psychographic and Behavioral.
DEMOGRAPHIC
In demographic marketing segmentation of the Kolson divide market age wise,
gender wise, according to family size, family life cycle, income, generation.
Cracker: Katch
12
18 to 35 years male and female both, young and adults.
GEOGRAPHIC
Kolson sell its biscuit nationally and Internationally.All the major citys of Pakistan
urban & rural areas easily available for them.
PSYCHOGRAPHIC
Kolson offer its Biscuit to lower class, middle class and working class.
BEHAVIOURAL
Kolson biscuits are in regular consuming product that’s why Kolson make it
available every where as buyers buy Kolson biscuits easily and it gives good
quality in biscuit at affordable price.
TARGET MARKETING
Kolson target to all age of people.
POSITIONING
Kolson positioned its biscuits as a full of energy, young adults, remetiz, delicious
and innovative family and Party biscuits.
BRAND POSITIONING
Bravo when we hear the name of Bravo it indicated the full of energy and daring biscuits.
Jam Heart indicates the biscuits for Lovers and Teen agers.
Mobile name of biscuits indicates is a kid's biscuit.
BRAND PERSONALITY
13
Kolson has a strong brand personality that's why it supports the other categories
brand.
MARKET SIZE
Kolson biscuits are sold in all over the Pakistan nationally and now a Kolson
biscuit enters in International market like USA, Canada.
MARKET SHARE
50% EBM
25% LU
11% Kolson
9% Bisconi
5% Mayfair
14
Kolson
Biscuit
Market Shares of Biscuit Companies
shares
11%
EBM
LU
Kolson
Bisconi
May fair
MARKETING MIX
PRICING APPROACHES
15
Kolson use competition base prices approaches for set its price strategy. Kolson
sets its prices strategies available in the market.
PLACE
Kolson considers its distribution network to be one of its key strengths because it
is highly effective at supplying the various Kolson products at the retail outlets.
They have outsourced their marketing and distribution operations to Fed Globe
International.
Kolson biscuits& JAM HEARTS can be found at nearly all retail outlets
throughout Pakistan. They have a distribution network in all the major cities in
Pakistan.
Kolson is targeted at late teens and the youth. This is also evident from their
advertisements and television commercials. Kolson biscuits see itself competing
mainly with its closest rival Bakery and the market leader Sooper. It also sees the
non-branded egg and milk cookies as threats to its market share.prince by LU is
the biggest competitor of JAM HEARTS.
CHANNELS OF DISTRIBUTION
PROMOTIONAL ACTIVITIES
The company is aware and does quarterly analyses about who purchases what
products of Kolson. The company evaluates the trends in the markets; where
there are heavy sales and where there are no or negligible sales. Once they
have analyzed their strong and weak sales areas they decide which promotional
tools to apply.
BTL Activities
– Third Party Contracts
– Trade Gatherings
– Road Shows
– Club Dinners
16
– Conducted in Presence of concerned Sales Officer
ATL Activities
– Advertising Agency is Brand Partnership
– Media, Billboard Campaign
– Print Campaign
– Etc
Kolson markets its products through heavy advertisements. Most of the television
advertisements focus on its snacks and biscuits. Many billboards across the city
display Kolson products. The advertisements target all age groups and income
levels.
Trade push
When trade push is employed a good display position is sought after at outlets. If
there is money to be invested the common rule of “eye level is buy level” is
employed.
PRODUCTS
Name: Katch
Category: Cracker
Packaging: Ticky Pack (4per pack) & Half Roll & Family Pack
1 Box: 115gms (4.06 oz)
17
Ingredients:- Wheat Flour, Sugar, Vegetable Fat, and Oil, Invert Syrup malt
Extract, Skin Milk Powder, Yeast, Salt Raising Agents, Natural Enzyme,
Emulsifying Agents.
Energy 2030KJ
Protein 9.5 gm
Fat Total 32.1 gm
Carbohydrates:
Total 71.1
Sugar 10.0
Cholesterol 4.2 mg
Dietary Fiber 1.1 gm
Sodium 271 mg
Name: Bravo
Category: Egg & Milk Biscuits
Packaging: Ticky Pack (4per pack) & Half Roll Packaging:
1 Box: 24gms x 24 pkt (0.85 oz x 24)
Ingredients:- Wheat Flour, Sugar, Vegetable Fat, Skim Milk Powder, Fresh Eggs,
Cocoa Powder, Salt Emulsifying Agent, Artificial Food Colour & Flavours.
18
Nutrition Chart (Per 100gms)
Energy 2133KJ
Protein 7.5 gm
Fat Total 27.5 gm
Carbohydrates:
Total 72.9 gm
Sugar 25.8 gm
Cholesterol 17.2 mg
Dietary Fiber 0.180 gm
Sodium 271 mg
Packaging: Ticky Pack (4per pack) & Half Roll & Family Pack
19
Ingredients:- Wheat Flour, Sugar, Vegetable Fat, Invert Syrup, Skim Milk
Powder, Salt Maize Starch, Raising Agents, Emulsifying Agent, Artificial Food
color and Flavors, Strawberry jam.
Energy 1563KJ
Protein 6.3gm
Carbohydrates:
Total 63.0gm
Sugar 31.1 gm
Cholesterol 9.1 mg
Sodium 481 mg
Packaging: Ticky Pack (4per pack) & Half Roll & Family Pack
20
Ingredients:- Wheat Flour, Sugar, Vegetable Fat, Invert Syrup, Skim Milk
Powder, Salt Maize Starch, Raising Agents, Emulsifying Agent, Artificial Food
color and Flavors, Strawberry jam.
Energy 1563KJ
Protein 6.3gm
Carbohydrates:
Total 63.0gm
Sugar 31.1 gm
Cholesterol 9.1 mg
Sodium 481 mg
Packaging: Ticky Pack (4per pack) & Half Roll & Family Pack
21
1 Box: 115gms (4.06 oz)
Ingredients:- Wheat Flour, Sugar, Vegetable Fat, Cocoa Powder, Invert Syrup,
Glucose Syrup, Honey, Skim Milk Powder, Salt Maize Starch, Raising Agents,
Emulsifying Agent, Artificial Food color and Flavors.
Energy 2119KJ
Protein 7.0gm
Carbohydrates:
Total 67.4gm
Sugar 35.2 gm
Cholesterol 9.2 mg
Sodium 519 mg
Packaging: Ticky Pack (4per pack) & Half Roll & Family Pack
22
Ingredients:- Wheat Flour, Sugar, Vegetable Fat, Cocoa Powder, Invert Syrup,
Glucose Syrup, Honey, Skim Milk Powder, Salt Maize Starch, Raising Agents,
Emulsifying Agent, Artificial Food color and Flavors.
Energy 2119KJ
Protein 7.0gm
Carbohydrates:
Total 67.4gm
Sugar 35.2 gm
Cholesterol 9.2 mg
Sodium 519 mg
CRITICAL ANALYSIS
SWOT ANALYSIS
STRENGTH
The competitive edge identified for Kolson is their product innovation. Their idea
of innovation is reflected in their creation of unique products. Bravo is unique in
that it has a thin chocolate layer that runs in the middle and the shape is also a
bit different from any other egg and milk biscuit in the market.
23
Another strength identified is the supply and distribution channel. They are able
to achieve a strong distributor network because their well established products
like Slanty and Spaghetti also utilize the very same networks. Kolson also has
regional warehouses in the major cities like Karachi, Lahore, Quetta and
Peshawar.
WEAKNESS
One weak area that we can identify is their lack of expertise and experience in
the biscuit market. Other key players in the biscuit market such as LU and Peek
Freans have years of experience in the field of confectionaries and have created
a brand image. Customers do not necessarily think of biscuits when they hear of
Kolson. Another reason for this is the success of Slanty which has created a
strong association of chips manufacturer with Kolson.
OPPORTUNITY
According to market growth research conducted by Kolson the biscuit industry is
expected to grow b 50% in the next five years. This growth can be attributed to
opening u of new markets, especially in the rural areas where branded biscuits
are struggling save for Tiger. The way Tiger biscuits achieve this is by including
more biscuits per pack then its rivals.
Kolson can penetrate into these rural areas and possibly lower down its prices or
include more biscuits in the same pack. They would also need to adjust their
biscuit's taste and price for the rural markets possible by introducing a variant of
the same biscuit in a different packaging.
Kolson can also take the opportunity of promoting its biscuits as a better and
healthy alternative to other snack foods. Their biscuits contain nutritious like milk
and egg and so Kolson can promote that as well.
THREATS
Three main threats have been identified. The first and most pertinent threat is the
fast growing and highly competitive local industry. The mail players are Peek
Freans, LU, Bisconi, and the unbranded industry. Although the unbranded
24
industry is not so much successful in the metropolitan areas, it has managed to
give the branded products a very tough time in the smaller villages.
Second area Kolson must be careful about is the emerging threat form
International businesses that are establishing snack operations in Pakistan. So
far a significant competitor in the egg and milk market has not risen from the
Multi National Corporations but it is just a matter of time that they start looking in
this lucrative segment, which is, about grow even more.
The last threat that can be identified is related to the overall biscuit industry. It
results from the fast growing snack food industry (other then biscuit) which is
trying to fight for the customer money. A person, when he will have a choice, may
spend the money upon chips or nimco rather then spending on biscuits.
COMPETITOR ANALYSIS
The Lefèvre-Utile Biscuit Co. was a baker and cookie maker founded in
Nantes, France in 1846 by Jean-Romain Lefèvre. Today it is known as LU and is
a part of Kraft Foods.
25
The name LU comes from Lefèvre and his business partner and wife, Pauline
Utile. Their initials were first utilized by Alfons Mucha for an 1897 calendar ad for
the Lefèvre-Utile Biscuit Co. That same year the company hired Firmin Bouisset
to create a poster ad. Bouisset, already famous for his work for the Menier
Chocolate company, created Petit Écolier ("the Little Schoolboy") which
incorporated the LU initials. Bouisset's poster was used extensively and the
image was embossed on the company's Petit Beurre line of biscuits. Within a
few years, the success of the logo resulted in the company becoming known as
LU.
The founders' son, Louis Lefèvre-Utile took over the company and eventually it
was acquired by Generale Biscuit S.A. which in turn was sold to Groupe Danone
in 1986. Although an international brand today, LU products are primarily
distributed in Western Europe and as of 2005 represented nearly half of the
Sales for Danone's biscuits and cereal division.
Content: 308 gr
Price range of 5 Rs.to 25 Rs(tikey pack
half role and familiy pack)
Prince is the main competitor of JAM
HEARTS.
MARKETING STRATEGY
26
The aim of this strategy will be to concentrate efforts towards increasing the
number of users by converting consumers, from using traditional using of
biscuits, through Mass Media and Rural Penetration.
TARGET MARKETING
Kolson target Every member of a family, i.e. mass marketing one product for
all.and for JAM HEARTS it is targeting on teen ages and the youth.
POSITIONING
kolson has positioned itself as a value for money product. It tries to portray itself
as a quality biscuits and in the false prophecy that people believe it to be a
foreign brand where as most of the people perceive it to be a cheap local brand.
Concept of family is absent from Bravo advertisements, as well as JAMHEARTS,
unlike its other competitors, LU, ABM.
DIFFRENTIATION
kolson differentiates its products in the high priced segment. Similarly they
innovate and bring out new products in the high priced segment. With some
27
existing products, which don’t sell that much. kolson has reduced their quality
and sells them at a lower price.
PRICE
The current pricing strategy of Kolson's biscuits and of JAM HEARTS is
competition based. It is fair enough, because a higher price may take away its
urgent market share and a lower price would make the customers think that it is a
cheap product.
DISTRIBUTION OUTLET
General stores, wholesale markets, departmental and super stores, i.e.
increased efforts to penetrate the market.
company
company Super
Super
store
store
Distributor
Distributor
Wholesaler
Wholesaler Retailers
Retailers
ss
mobilebiscuit
biscuit
mobile Jamheart
heartFor
For
For Kids Jam
For Kids Adults
Adults
SALES & DISTRIBUTION OBJECTIVES & MODEL:
To make distribution a competitive advantage to reach as many people
and to cater to as many cities as possible.
High level of retail penetration –maximize sales
Reinforce brand image & positioning
Low distribution cost
28
High channel loyalty through fair profitability for channels
ADVERTISING
Advertising Budget
1. kolson on TV: TV ads are used to promote kolson as a brand that the name
off bravo indicates full of energy and daring biscuits for you and JAM HEARTS
for lovers as its name shows itself.
When it comes to advertising, kolson prefers TV, as it is the best media. Apart
from this, in Pakistan, TV is a strong medium, it has highest reach. Thus a large
part of advertising budget is focused on TV.
2. kolson on Print: The print ads are the extracts of TV commercials, placed
in various kinds of magazines ranging from health to fashion.
SALES PROMOTIONS
Objective
29
kolson has been working a big deal on promotional activities they think that
brand equity is more important. Although they sometimes do below the line
activities such as they set up stalls in different places. Kolson also do
promotional campaign but on a very small scale for JAM HEARS.
MARKET RESEARCH
Conduct through market research to understand the consumer-choices and
behaviors. Try to figure out what where Kolson& jam hearts lags, as compare to
its competitor, LU, ABM.
Kolson should ask the customers about what changes and additions in terms of
taste, size, packaging, etc, would the customers like to see in its biscuits.
MARKETING OBJECTIVES
To increase Kolson's market share to 11% of the entire Biscuit industry in the
future.
MACRO ENVIORNMENT(FORCES)
Economic Conditions:
30
The economic conditions of the country play an important part in the biscuits
industry. For instance currently Pakistan’s economy is improving, the
common man has more money to spend and they can buy simple
commodities like biscuits. This improvement in the economic conditions also
allows the companies to further invest and launch new products to cater to a
bigger market.
Government Regulations:
The government regulations decide both the influx of foreign goods and the
rules and regulations for the existing industries to follow.
31
Environmental Concern:
Even though environmental concerns are not so strict in Pakistan but still the
biscuits industry gets certification from standard organizations. For instance
kolson is ISO 9001: 2000 and ISO 14000 certified.
TECHNOLOGICAL FACTORS:
New Entrants:
The biscuits industry does not fear any new entrants because of the high
investment cost and also because companies do not focus on this particular
industry.
32
2008 2007
Rupees in millions
The outgoing year has been one of the toughest the company has ever faced in
terms of rising cost, global inflation, uncertain political situation and an erratic
economy.
Cost components that lead to reduction in GP may be segregated as follows:
Major raw material used in the production process and their average
annual prices are as follows:
a. WHEAT FLOUR
33
The year 2008 witnessed shortage of wheat flour in the country and
consequently prices moved significantly upward. Demand supply
mismatch was mainly due to inconsistent government policies. The same
may be analyzed from the graph below:
2000
1500
1000
500
0
JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN
2007-08 1277 1307 1532 1532 1532 1582 1902 1777 1652 1702 1802 2152
2006-07 1135 1180 1155 1195 1185 1185 1215 1195 1195 1175 1195 1215
To manage the price inflation, company has taken various steps including
exploring new suppliers locally to hedge ourselves against further rupee
devaluation risks. Further, fortunately international oil prices have also
shown a sharp decline subsequent to balance sheet date which will have
a positive impact on future profits.
2.PAYROLL COST
34
Increase in payroll cost is mainly due to the enhancement of minimum
wage by 15% to Rs. 4,600 per month for unskilled labor for financial year
2007-08 as compared to Rs. 4,000 during the year 2006-2007.
FUTURE OUTLOOK
Wheat Flour
The international palm oil prices have also shown declining trend
subsequent to balance sheet date and reduced by 60% since march 2008.
Landed cost has also been reduced to Rs. 80/kg in October 2008 from Rs.
120/kg during March – June 08 quarter.
Packaging film
35
1. Adjustment in SKU
To meet the cost pressures, the company has redesigned its SKU’s by adjusting
weight etc. of its finished products. The objective is to keep the SKU’s within the
cost limits and ensuring desired profitability.
Electricity charges
36
RECOMMENDATION
1. Kolson has not been so active in terms organizing or sponsoring
social events. We think that it should take a step forward by
sponsoring events like sports, concerts, and academic events. The
reason we chose academic events is Kolson currently positions
Bravo& Jam hearts as product for teens and youth, which is quite
evident from its TV commercials. In order to reinforce positioning, it
should sponsor academic events organized by college and university
students, who in turn are its target market.
37
38