Professional Documents
Culture Documents
Submitted To:
Sadaf Noor Ruba Zahid Zunaira Khan Namra Kabir Javeriya Sharoze
Multan.
Preface
First of all, praise and humble thanks are for
Almighty Allah
the most Merciful and potentially upon us to accomplish the present report successfully with all sincerity, we express our gratitude to the Holy Prophet, Muhammad (PBUH) who is the source of enlightenment, guidance, wisdom and knowledge for the entire humanity in all spheres of life.
We wish to express our deep sense of gratitude to our respected and honorable teacher Madam Shumaila Dilawar for her friendly behavior and keen interest. Her kind advice and guidance helped us a lot though out the progress of this report. The purpose of this report is to discus those factors which affect the Pakistan Tobacco Company
Although, it is very much difficult to say that our effort are perfect. But let us assure you that we try to leave no stone unturned to make this report as good as possible.
Authors
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Description
Introduction Structure of Pakistan Tobacco Company Brands of Pakistan Tobacco Company MARKETING ANALYSIS Competitors of PTC Market Shares of PTC Customer-Driven Marketing Strategy of Pakistan Tobacco Company Marketing Mix of Pakistan Tobacco Company External and Internal Environment of the Organization PESTEL Analysis of Pakistan Tobacco Company SWOT ANALYSIS of Pakistan Tobacco Company BCG Matrix Of PTC Conclusion Source of Information Questionnaire
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Company has instituted one of the largest afforestation efforts in South Asia in order to increase the natural forest cover in Pakistan, and ensure the environmental sustainability of our operations. Talented people join Pakistan Tobacco Company at all stages, and we offer excellent opportunities across our different functional areas.
Corporate & Regulatory Affairs Finance Human Resource Information Technology Production Leaf Marketing Sales Marketing Brand Marketing
But our main concern is Marketing Department. Later in this report we discus STDP strategies of Pakistan Tobacco Company. Then we have a look over their marketing mix (4 Ps) including Price, Product, Promotion, Place and in the last there are brief SWOT and PESTEL analysis. SWOT analysis means companys Strengths, Weaknesses, Opportunities and Threats. In the same way PESTEL analysis is the Macro environment factors including Political, Economical, Social, Technology, Environmental and Legal Factors.
PTC has always considered their selves a consumer focused company. They aim to offer a product that excels in all aspects and exceeds the expectations of our consumers. their brands are:
Dunhill Benson & Hedges John Player Gold Leaf Capstan by Pall Mall Gold Flake Embassy
MARKETING ANALYSIS
Marketing at PTC is divided into three further categories 1. Marketing research 2. Brand marketing 3. Trade marketing
Trade marketing: The trade marketing staff works direct in the field and interacts with
the distributors, wholesalers, retailers, and the customers. PTC has been consistently meeting consumer expectations for the past ten years with the popular international brand names like Benson and Hedges, John Players Gold Leaf, Wills, Capstan, and Embassy
Competitors of PTC
Pakistan Tobacco Company is a price sensitive company. It can compete in the price sensitive market. So PTC segmented its market on the base of the following two factors
Demographic Segmentation
In demographic segmentation they focus on the gender, age and the income level of the people. They do not consider female customer because smoking is basically link with males in our society. Then according to they laws it is illegal to sell cigarette to those who are at the age of less than 18.so firstly they divide the market into males and females. Then they divide males segmentation into teenagers and youngsters more than 20. The last demographical segmentation is on the bases of income of their customers. They launched the brands according to the income level of the customer. Following are their brand segmentation on the base of classes:
Psychographic Segmentation
There is the mix of the behavioral and psychographic segmentation.PTC link status with their brands. So some wants to be considering upper class society and use branded and expensive products. So to satisfy the psychographic need of the customer they highlight Gold Leaf and Benson & Hedges as the status symbol. There is the concept in the minds of people than Embassy is the brand for farmers, electricians etc.So the status conscious person do not buy it. The also segmented the market according to the following personalities of the person
Hardworking People
In this way they segmented their market according to the social classes lifestyle and personality characteristic.
Premium Class
It is the Cigarette produced by the best available tobacco. Gold Leaf is considered in this class. After getting the right of Benson & Hedges by PTC now it is also included in this class.
Middle Class
The tobacco of these cigarettes is little hard and in this class Wills, Red & White, Morven Gold is included.
Lower Class
In this class Embassy K-2 Royal and all Mardan Wala brands such as Daily, Time Square, Rangers etc. are included. The taste of these Cigarette is very hard and lower income group people smoke mostly these brands.
They also add personality features to their brands to satisfy the psychographic segmentation. Just as:
Gold Flake shows the symbol of being strong masculine person as well as for those who have high patriotic emotions Embassy is for farmers and it shows hardworking Gold Leaf is for those people who are discoveries lover and having adventurous nature
3. Differentiation
PTC differentiation itself or its marketing offer to gain Competitive Advantage through
Pakistan Tobacco Company is a commercial enterprise and their primary role is to build long term shareholder value by meeting consumers preferences for high-quality tobacco products. However, they believe that by absorbing and balancing a wider range of expectations, they are best placed to continue building a sustainable tobacco business.
Product Differentiation
Pakistan Tobacco Company invests in trying to understand the consumers preferences and ensures that adult smokers make informed choices about different brands available in the market. They have put in particular effort in promoting two of our Global Drive Brands, Dunhill and Pall Mall; and two of our great value for money brands, John Player Gold Leaf and Gold Flake.
Image Differentiation
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As discuss earlier PTC different Brands convey the products distinctive benefits and positioning.
4. Positioning
PTC gain positioning in the minds of their customer through Consumer Disposition Funnel. This strategy is used to give incentives to the customers and take the differentiated position in the mind of the customer.
Awareness Consideration
Those who are aware of PTC brands Those who consider that PTC is superior to others
Trail
Those who use the PTC brands for the first time
RepoTrail
Those who prefer PTC brands if their required brands not available Offer schemes like buy 1 get 1 free to make them loyal
Regular
Those who are loyal to you and PTC regular
To persuade them Maintain the to start using their brands offer them in small packets with discounts rate n rewards quality better than your competitor that the one who use it 1st time become regular
With the help of this consumer funnel PTC gain position in the mind of the customer. Now suppose the hypothetical example that how PTC gain its profit and build image in the minds of the customers. Gold Leaf is of 60 Rs, Gold Flake is of 40Rs and Capstan is 25 Rs
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sold. Now to gain the competitive advantage and increase the sales of the Gold Leaf PTC reduces its prices to 50 Rs. now those who purchase Gold Flake also shift to Gold Leaf. The companies share increases and Gold Flake become the Source of Business for Gold Leaf.
Thi
s Consumer Disposition Funnel also shows that the percentage of the categories also decreases as it moves upwards.
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PRODUCT
PTC has always considered it-selves a consumer-focused company. They aim to offer a product that excels in all aspects and exceeds the expectations of the consumer. In this section, you will find the story of our brands and their origins. PTC has particular emphasis on its five national drive brands.
PTC launched Benson & Hedges in Pakistan in March 2003. Made with the finest hand picked golden Virginia tobacco from across three continents, the brand is packed with perfection to seal its freshness. The objective of introducing this brand is to establish the locally manufactured B&H Lights as the most preferred offer amongst consumers, in the premium lights segment and to add image to the B&H family by offering a wider product range. It was launched in the three metros of Karachi, Lahore and Islamabad/ Rawalpindi.
The story of John Player Gold Leaf has to start from the story of its founder, John Player. An enterprising businessman, John Player started a small tobacco selling business in 1877 and turned it into a thriving cigarette company, John Player and Sons. With a distinct lifebuoy and sailor trademark, John Player Gold Leaf has an identity entrenched in sailing and maritime adventure. Thus staying true to John Players very first big brand -Players Gold Leaf Navy Cut cigarettes. Gold leaf is the key value and volume contributor for PTC. It remains the most aspire brand in Pakistan. From 2000, the brand is showing
Capstan:
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Capstan has grown by leaps and bounds to become the fastest growing brand of Pakistan Tobacco Company (PTC) in the year 2001, recording a staggering growth rate of 104%, overtaking sales volume of the major competitive brand in the early part of the year, and consistently outselling it throughout.
Gold Flake:
Gold Flake is PTCs largest brand in volume terms and is also a significant contributor towards the value share. A highly successful pack design change in 2004, soon after the new pack was lunched in the market and Gold Flake smokers accept the new design of the pack, at this point an aggressive promotion in the market that would ensure the maximum exposure of competition smokers to the new pack. There are three new variants were added into the family; Gold Flake 14HL, Gold Flake 10HL and Gold Flake 10SC, in order to offer the consumers a wider choice.
Wills King:
WILLS takes its name from the heritage of one of the original Imperial Tobacco Company families: the Wills Brothers of London. Wills is also a well known brand in Pakistan.
Embassy:
The third leading volume brand in Pakistan is most popular in the Punjab where it enjoys a leading position due to its equity and loyalty. Embassy continued its growth in the year 2001fortifying its position in the market. The brand registered a growth of 3% over 2000. Major focus during the year remained on the introduction of more consumer relevant packaging variants. In the 3rd quarter of 2001 the brand family was extended with the introduction of Embassy filter 16ss pack followed by Embassy kings 14HL variant. With the launch of these variants, the family now offers more choice to its consumer at affordable price.
PRICE
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PTC is continuously decreasing its prices in order to maintain its market leadership by Penetration Pricing. The price war started when PTC reduced the prices of its middle priced brands in the start of 2008. It cut down its prices from RS. 19 to RS.9 (almost 50% price cut) which reduce the excise duty from 63% to 43% with no change in the sales tax i.e. 15%. Despite reducing prices, PTC was still able to earn normal profit and was at its break even. As a result more people are purchasing the products, that has lead PTC to gain a market share of 46.3%. Discount brands of PTC including Gold Flake have seen a rigorous growth in sales. Almost 18% sales growth in Gold Flake has been observed as compare to previous year. On the other hand, Government argues that cigarette manufactures should continue with high prices and avoid limiting prices so that they can better able to get higher revenues and moreover increased prices would help discourage excessive smoking among the users (reducing the health effects of smoking). Although prices of PTC are still competitive, the existing price war system is a matter of concern for Pakistan Tobacco Board (PTB) and the government itself. No efforts are proved to be fruitful to reduce the gap created within the market.
PROMOTION
Promotion wars are playing a vital role in intensifying competition in the industry.. The enthusiastic, colorful and catchy slogans and other marketing techniques are used to target a wide variety of customers (especially youth), represent smoking activity as apart of status and youth symbol. Slogans like
Capstan men demand Capstan the world over Gold leaf for the taste alone Gold flake together in success
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The different types of promotional activities that are taken into account at PTC are as follows;
ADVERTISING
Packaging: By packing the product in the different packs and in different quantity to meet the demand of the different and segmented customers Point of purchase display: By placing products trial packs on the different shops to promote the sales Posters and leaflets: Display posters and fliers in front of shops
SALES PROMOTION
By giving the incentives to the distributors, whole sellers and retailers like to get the product on credit and sell to the customer and enhance their and the Company sales.
Contests and Lotteries: PTC uses different schemes, providing gifts in the packs and by giving winning prizes by means of lotteries to promote sales and to beat competitors. REBATES: They usually provide the rebates to the retailers and whole seller who want to establish their business on their own or who usually contact with them directly. TOPING UP: Talking with shopkeeper, tell them about their company, brand and advantages of brand. Pack display/Pack facing: small 3 or 4 row displays at hotspots in which prescribed program is implemented. BRAND AVAILABILITY :To confirm from the shopkeeper that all the brands are available or not, means to ensure all time availability of the stocks in the respective beats by doing the exercise of toping up.
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-60) shops per day but salesman also visit daily shops , some salesman also cover three beats the reason is that demand is not too much.
Place:
PTC, through 343 distributors, services a very large retail and wholesale network across the country. PTC has always been looked upon as one of the most dynamic organizations with its exuberance to quickly adapt to the changing needs of the market. Ensuring that consumers are able to purchase the product they require, both where and when they want them, plays a major part in achieving a high market share. Key activities include:
Development of distribution strategy Develop and implement distribution plans Implement merchandising and point of sale policy Monitor and manage out of stocks Build and effective sales oriented organization
PTC is one of a very few companies in Pakistan which is paying a great deal of attention to the retail marketing. PTCs current distribution network thereby reducing costs. Total of about 270,000 retailers and over 7000 wholesalers were surveyed.
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Internal Environment
Strength Weakness Threats Opportunities
External Environment
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Political
Pakistans political situations have always been in fluctuation. Even PTC is long since contributing in the countrys wealth in terms of taxes and providing employment to hundreds of people. Although it is never denied that tobacco is hazardous to health but PTCs aim is not to create more customers but to provide quality of tobacco to those who are already addicted. Marketing standards: PTC has long accepted that smoking is risky.
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Its business is not about persuading people to smoke; its about proving quality brands to adults so adults who have already taken the decision to smoke.
Economical
As a company it understands its roots are firmly embedded with the nations, it has been part of the industrial development in the country. Pakistans tobacco has maintained its growth momentum during the years scaled new heights with the achievement of milestones and made progress in the every facets of its business. PTC has contributed Rs. 26,472m in year 2007 in form of government levies and taxes which is the indicator how PTC is contributing in the economic development of the country along with the job creation and installation of advanced and sophisticated machinery and equipments.
Social
PTC marketing is not designed to sell smoking. It is marketing in long established mature product category. Where people already know what the basic product is. There would be no commercial sense in trying to market informed customers who dont want the product. Its marketing is about the following aspects
Brands Retaining the loyalty of customers to brand Winning customers from commentating brands.
As a company with long international roots and traditions, PTC is also sensitive to local customs and cultures. It is working with other companies in the tobacco industry to establish a common basis for clearly understood conduct, which would set the base line for acceptable tobacco marketing worldwide. Following are the key features of the Voluntary Code of Conduct:
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No advertising designed to appeal specifically to minors (<18 years of age). No advertisements in the magazines and newspapers, which are directed principally towards minors. No models under 25 years of age to be used to promote the products. No promotional events of particular appeal to minors. Celebrities not to be used for promotional purposes.
Technological
It is the back bone of every business; without it concept of modern business is becoming impossible in modern business environment. Process technology:
System Application Program (SAP) SAP is the world leading ERP system
Process Technology
Mark 9 plants are used in production. The manufacturing machines manufacture 8500 cigarettes per minute. A packing machine makes 300 to 400 packets per minute. The process technology consists of GLT, SMD and PMD.
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Environmental
Being fully alive to its role as a responsible corporate citizen PTC has implemented a well structured EH&S program PTC is committed to ensure that it nurture an environment where its employees and surrounding communities are safe from hazards that may affect their health and minimize the effect of its operations on biodiversity. PTC commitment to EH&S was further strengthened in 2006 as PTC achieved significant improvements on the EH&S roadmap. Both its production facilities were rectified with ISO 14001 earning the evergreen status. PTC has consistently sustained its accreditation in last seven audits with zero major and minor points. PTC efforts has further been sustained with National Forum for Environment and Health awarding PTC the annual Environment Excellence award on Health , Safety and Environment for second consecutive year in 2006. Throughout the company history it has maintained a strong stance on Corporate and social responsibility it strongly believes in building effective and constructive partnerships by helping address various EH&S issues. Over the years the company has substantial resources in terms of finance and manpower in various initiatives like Mobile Free Dispensaries, learning resource center and portable water.
Legal
A company in an industry such as ours faces many legal and legislative issues. Our legal team is dedicated to assuring the long-term sustainability of the business. As well as ensuring that our operations are fully complaint with exciting local and international legislation. The legal function has within its mandate has following areas
Reputation and legislation management Company secretarial work Intellectual property registration and protection
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Continuous learning and improvement. Sustainable growth. Environmental standards achievement. Market leadership in the world. Being beneficial to the community (Corporate Social Responsibility) Diversified workforce and environment. Technologically advanced machinery and equipments. Good salaries packages. Focus on health and safety on the company premises. Training and development of its employees. PTC offer heavy incentive package like Motorcycles, TV, tape recorders and wall clocks in promotion. PTC is a consumer-focused company. PTC is working in systematically way. PTC is working as doing good not only doing well. PTC attract only those people whom above 18 and not mare then 40. PTC gives more incentives to salesmen during any promotion. PTC is taking care of their employees. Management of PTC create a database and all its employees are link between each other
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PTC conducts health and safety programs of their employees. The working environment of PTC is very good. PTC appreciates all of those employees who show more effort in their work.
WEAKNESSES
Salaries difference between workers who work more and the one who put minimum efforts. Technological advancement would decrease the workforce and unemployment will increase. Very minimum marketing as compare to its competitors. Workers are always under threat because of downsizing. Improper distribution of work Salaries of salesmen are very low due to this reason they are not satisfied. Number of distribution is less. Sales promoter is not working up to the standard. The actual price of Gold leaf is Rs 39.60 most of the shopkeepers sales it on Rs 42. Company not covers rural area according to their desire. Some time salesmen not cover his area in proper time.
OPPORTUNITIES
Greater opportunity of promoting lower brands in rural region. PTC has the potential to further improve the cost reduction method. Create a better work environment in GLT department because of more hazards in this department. Lowering the downsizing will create a good image in the eye of regulatory authorities and government.
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Focus on its key brands i.e. high growth like Gold Flack this years growth was around 27%. Export of premium brands Brands acceptance shows that it has potential to grow and grow well. Promotion activities give us ideal opportunities to cannibalize substantial share from declining brands. Promotion has been a strong basis towards building up big brand image for all PTC. In promotion PTC give more incentives and LTC give less it is best opportunity.
THREATS
Some of its competitors are also producing high quality brands like Marlboro by Lackson. Internationally some countries are continuously promoting anti-smoking slogans like the ban of smoking in Bhutan in 2002. Better marketing campaigns by rivals. Their well-established brands are highly copied by some local manufacturer. The political, economic situation is not stable in Pakistan. Limitation of their product, Decline in tobacco growth When PTC starts any activity of coupon scheme LTC also start such type of scheme. Some times LTC introduce consumer promotion with better and attractive prizes. Sometimes LTC reduce its prices. LTC cover more area instead of PTC. Customer of Marvin Gold is very loyal. The prices of competitor are very less as compare to PTC brand
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CONCLUSION:
Pakistan Tobacco Company is part of a growing industry and the trends in the sales for the five years studied have been positive. As said earlier the company is enjoying a major share of the market through most of its brand being the market leader. Thus the company did not let go of the opportunity of the trends in the market growth and started invested in new and improved capital. The company invest in its Stars and question marks and try to eliminate its Dogs The major competitors of the company are importing their finished goods stock from their operations in other countries and are well-established companies too. PTC still enjoys the control over the local market, but todays customer is more price conscious and if PTCs competitors give competition through improved production facilitates and reduction in costs PTC might not be able to transform to low cost production facilities in short span of time.
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Source of Information
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MARKETING QUESTIONNAIRE
Dear Sir, We, students of Bahauddin Zakariya University is conducting survey on the Marketing Strategies of Pakistan Tobacco Company. Please cooperate with us by giving your information. You are requested to read carefully and select the best. All your information will be kept confidential.
Name of Manager:
1. Which of the following Marketing Segmentation Strategy you are adopting? a. Geographical Segmentation b. Demographic Segmentation c. Psychographic Segmentation d. Behavioral Segmentation e. If more than one then mention both
2. Which parameters are taken under consideration by PTC for effective Customer Marketing Segmentation? a. Age Segmentation b. Gender Segmentation c. Income Segmentation d. Profitability Segmentation e. If more than one then mention both
3. You give incentives to your customer on the bases of _________ a. User Status b. Usage Rate c. Loyalty Status d. If more than one then mention both
4. On which of the following factor you segmentized your International Market? a. Economic Factor b. Political Factor c. Legal Factor d. Culture Factor e. If more than one then mention both
5. Which of the following Market Targeting Strategy you are adopting? a. Undifferentiated Marketing Strategy b. Differentiated Marketing Strategy c. Concentrated Marketing Strategy d. Micromarketing Strategy
6. In what specific ways PTC differentiation itself or its marketing offer to gain Competitive Advantage? a. Product Differentiation d. People Differentiation
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e. Image Differentiation
7. According to you which of the following factor is/are required to make the Marketing Segmentation effective? Segmentation should be ______ a. Measurable b. Accessible c. Substantial d. Differentiable e. Actionable f. If more than one then mention both
8. Which of the Positioning Strategy is normally and frequently use by your company? a. More for more b. More for same c. Same for more d. Less for more e. More for less
9. In product management which of the following product feature are taken under high consideration in PTC a. Quality b. Variety c. Design d Brand name e. Packaging
10. What do you think how the effective Sales Promotion can be done? Through _____ a. Advertising b. Personal Selling c Sales Promotion d. Mention if any other
11. What are your Pricing objectives? a. Profit oriented b. Sales oriented c. Status oriented 12. Which Market-Entering Strategy you adopt whenever you launched a new product? a. Market-Skimming Pricing b. Market-Penetration Pricing c. Mention if any other 13. A company has four choices when it comes to developing Brands. Which of the following you prefer? a. Line Extension d. New Brands
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b. Brand Extension c. Multibrands 14. Being the manufacturer of Tobacco which of the following Brand Sponsorship you follow? a. Manufacturers Brand b. Private Brand c. Licensed Brand 15. According to you which of the following discounts make your sales effective? a. Quantity Discount b. Trade Discount c. Cash Discount 16. Which of following Marketing Channel you are adopting? a. Direct Marketing Channel b. Indirect Marketing Channel c. If any other then mention 17. Which of the following criteria of differentiation you satisfied during the differentiation of your product? a. Communicable and visible b. Preemptive c. Affordable d. Profitable
18. During evaluating the market on which of the three factors you focus the most? a. Segment size and growth b. Segment attractiveness c. Companys objectives and resources d. All of the above
19. According to you which of the following function is important for marketing channel member to perform. a. Information & Promotion b. Contact & Matching e. All of Above c. Negotiation & Physical d.Financing & Risk Taking
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