You are on page 1of 40

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

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. wetting agents. 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. binders. If we limit our analysis to binders market in Pakistan. Table 1 Source: Prospects of chemical industry in Pakistan 2003 BPL (BASF) has products to offer for softeners. emulsifiers. thickener. Table 1 shows the capacities of textile and tannery chemicals of eight major producers. Page 5 of 40 . BPL is market leader in Binders with its’ 46% share. Out of this total market BPL holds 21% share which makes it 2nd largest player in textile chemical industry. and dyes categories.Marketing Plan Production Capacity There are several units manufacturing textile chemicals.

B.Dyes Ciba Floerger Page 6 of 40 . All the players in this market are strong and not only defending their shares but also quite aggressive in terms of gaining market share.Marketing Plan Table 2: Texti Size of accessible market for texti Players BASF (Source: BPL Marketing division) Size of accessible market for Binder ET is PKR 1242 mio Players Sales in PKR mio BPL 579 Clariant 348 Sandalbar 236 M.Dyes 50 Others 29 Clariant Cognis Table: 3 Product Binder’s players Share in % 46% 28% 19% 4% 3% As can be see from table 2 that there is a very close competition in binders market.B. Sandalbar Source: BPL Marketing division 2005 M.

Page 7 of 40 . holds highest share both in terms of sales and profit margin among all textile chemicals that BPL offers. Besides enhancing color fastness it gives a soft and pleasant surface to the fabric. Since its inception in 1969 BPL holds majority share of Binder ET in Pakistan Textile Industry. BPL is also maintaining the same quality of the product as observed by other BASF companies all over the world. Binder is a slightly viscous liquid.Marketing Plan Products Analysis Binder: is used in Textile printing process. Without application of binder the dyes will bleed and come out while washing. Therefore. It also gives a resistance to fabric ageing.the brand name of BPL. 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. It is applied on the surface of the fabric after it is dyed. It is combined with another chemical product named “Thickener” to give desired results during application. BPL also holds till date highest capacity for the manufacturing of Binder ET. Binder ET . The raw materials and the manufacturing process of this product is same across the globe in BASF group companies.

Therefore. Upon exceeding the targets distributors are given special rebates and discounts. to cater its customers in North it has sales offices in Lahore and Faisalabad. BPL uses these distributors only for logistics. BPL holds legal contracts for sale with these distributors and gives them annual sales targets.e. To serve them BPL has appointed distributors in North. whom BPL presently serves with three distributors. Distribution Analysis Textile Industry in Pakistan is concentrated mainly in South (based in business capital Karachi) and in North (concentrated in major cities. BPL manufacturing plant is located in South in Karachi however. As shown in Fig. in terms of numbers is high in North. The total sale to this segment is PKR 121 million. All major customers of BPL in terms of sales are located in Karachi however. Faisalabad and Gujranwala). This segment of customers although low in number. 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). Altogether this segment accounts to only 12% of total binder’s sales.1. There are also about 401 small size customers.1 there are 8 customers which purchase Binder ET from BPL in large quantities in the range PKR 5 million or greater. Page 8 of 40 . it is not feasible for BPL to cater these small customers itself. This segment is large in number of customers but small in terms of quantity purchased. There are also some scattered units in North East part of Pakistan which borders with China but they are not big manufacturers.Marketing Plan 2. the customers’ base i. Lahore. although large in numbers are low in value. In case customers require technical assistance BPL provides itself. As mentioned above that the customers in North. accounts to 21% of BPL’s total binders sales. There are approx 30 major players and 70% of them are located in Karachi (BPL Marketing division 2005).

2).Marketing Plan Figure 1: Basis of distribution: in terms of sales of Binder ET Sa 21% Source: BPL Marketing division 2005 16% The type of competition here is the Industry concept of competition where the groups of firms offer a class of products that are close substitutes for one another (Kotler & Keller 2006) 350 BPL has 3 competitors for Binder ET.Dyes. Number of customers in segment 2. Competitive Analysis 400 250 200 150 100 50 CLARIANT 28% SANDALBAR 19% M. Clariant is the market challenger which 300 holds a market share of 28% while Sandal bar holds 19% and M.Dyes 4% Others 3% BPL 46% 92 mn Figure 2: Binder Market Share in 2005 121 mn 0 8 11 > 0.B.B.Dyes is small with 4% (See fig. They are Clariant. Sandal Bar and M.2.5 Customer seg .B.5 Page 9 of 40 Source: BPL Marketing division 2005 >.25 <0.

Sandalbar focuses on capturing market by comprising on profit margin too. however. Reason being that Clariant product base is large and unlike BPL its sales and profits are not dependant on a single product. closer to BPL’s. 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. to gain the market share it can afford to sacrifices on its price. and unlike BPL.Marketing Plan Clariant is a very strong competitor to BPL as it products are also of high quality. being a local company it has low operating cost which enables it to keep its price low. In doing so it compromises on quality and so is able to capture market of those consumers which seek lower quality at lower prices. Moreover. The other major competitor is Sandal Bar whose product portfolio is also dependant on binders. Page 10 of 40 .

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. 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. Macro-Environmental Situation 2. Economic The outgoing fiscal year has been an eventful year for Pakistan’s economy.3. 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. They are trying to curb extremism on one hand and on the other improving relations with Indian government. Page 11 of 40 . one is domestic through extremist group surging post 9/11 scenario creating instability inside. 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. Present government of General Pervaiz Musharraf is working on both fronts. Number of countries in EU.1 million tons) in 2004-05.2. According to finance ministry (2005) Pakistan achieved a real GDP growth of 8.1.3. The other is relationship with neighboring country India.6 million bales) and wheat (21. The per capita income of Pakistan crossed $ 700 mark and it also achieved highest ever production of cotton (14.3. 2.4 percent in 2004-05. and South Korea and have imposed restrictions on Pakistani textiles on anti dumping charges.Marketing Plan 2. Japan.

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. The Government of Pakistan is serious in implementing fast track reform process by strong macro-adjustment program such as to accelerate privatization. bring down tariff structure.3 percent during the first ten months (July – April) of the current fiscal year as against 3. homes. health and other sectors with widespread use of internet. WTO policies of free trade are proving a threat to major industries in Pakistan including chemical and textiles.3.3. adopt international standards.Marketing Plan However lower interest rates due to expansion of private credit and high fuel prices led to rising inflation which averaged 9. agriculture. and develop SMEs (small and medium enterprises). software industry and promote intensive use of information technology in trade. deregulate industries. Page 12 of 40 . infrastructure development. 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. education. 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.9 percent in the same period last year.

This system links BPL to 53 BASF group companies in 14 countries (BPL. optimum organizational structure. 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. It also has three application laboratories where the finishes product is tested and also shown for trial to its customers.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. Page 13 of 40 . high level of efficiency and a strong sense of security among employees. The factory of BPL conforms to BASF uniform global safety policy based on modern technology. 2005).

Raw material purchase from parent company: The raw material required to produce most products including Binder ET are purchased from the parent company. 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.SWOT analysis 3. This ensures high level of quality. BASF AG. 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. Largest production capacity: BPL’s production capacity in terms of producing Binders is largest amongst all producers in Pakistan. BPL enjoys a very established brand name because of its parent company in Germany. Technical training from the parent company: BPL’s employees. Page 14 of 40 . 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.1. It has a big manufacturing plant in Landhi. Karachi with state of art technology which allows production efficiency.1. Opportunity and Issue Analysis 3. Strengths BASF’s internationally strong brand name: A strong brand name is itself a strength for an industrial organization like BPL (Hutt & Speh 2001).1.Marketing Plan 3. BASF AG is a world’s leading chemical company with a range of over 1000 products. This reduced the huge implementation cost of BPL and it has to pay only the user license and maintenance fee.

3. BPL’s thin sales force is not able to cover all the areas especially where the customer base is large in number. Opportunities Demand from Indian textile market: Indian textile market is growing and the so the demand for chemical products such as Binder ET. To cater these large in number but small in individual volume purchase BPL is heavily relied upon distributors. 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. Weaknesses High dependency on one product: One of the weaknesses BPL has is that it is highly dependant on the sales of Binder ET.Marketing Plan 3. 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.2. High overhead costs as compared to local manufacturers: Although BPL had great advantage from parent company in terms of installation of ERP packages however. Page 15 of 40 . 3. 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. Of the total sales to textiles.1. Since they spend minimal on these overhead costs and are able to keep the product cost low. adapting these technologies and sending employees for technical trainings add to its overall cost on which local manufacturers have an edge on.1. USA and UK are closing their textile units: This has lead to high potential import from Asia to the European countries and USA.

Local chemical producers are growing stronger: Local manufacturers in Pakistan are growing in numbers and are also nearly competing in quality. This will affect local industry both on domestic and international fronts.1.4. Their growth threatens BPL of losing its market share in the future.Marketing Plan 3. Threats WTO regulations of free trade: Low tariffs will give access to international manufactures especially Chinese who have economies of scale and low cost. Page 16 of 40 . Growing Anti dumping duties: Stringent anti dumping laws may impact textile export which might eventually affect BPL’s sales.

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. 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. One issue that BPL will have to deal with soon is to build a manufacturing plant in other parts of country as well.Issue Analysis BPL has to deal with issues which concern it both internally and externally. Although Pakistan has taken the stand of protectionism from international competitors the free trade rules of WTO demand end to protectionism.Marketing Plan 3.2. Page 17 of 40 . The external issues to deal with are those concerning increasing international competition in the near future in the wake of WTO.

Sealed other cost: all other cost such as selling. Human Resources and IT support.2%. Reduce Administration cost: Administration cost comprises of indirect cost of functional departments such as Finance and Accounts.1. The accessible market for Binder ET in the textile industry is expected to grow at a rate of 5. transportation and other operating cost should be kept at same percentage of sales as last year.Marketing Plan 4.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. BPL will have to defend its current market share of 46% by also growing with market and increasing its sales by 5. it will be able to enjoy the same rates agreed with parent company. If the company shifts all its financial transaction from other banks to Deutsche bank. Reduce financial cost by 1%: BPL should try to take advantage of parent company’s global agreement with financial institutions like Deutsche Bank. This will reduce cost of running finance by 1%. Objectives 4.2% according to Board of Investment (2005). Company should reduce this cost by 1%. 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. This can be achieved by restructuring the department and laying off redundant jobs. Page 18 of 40 .

BPL marketing division will start consumer trade and trade promotions. Expand distributors’ base: BPL should focus on small size customers by appointing distributors who can provide technical assistance to these customers.2. increase personal selling and increase Public relations. The market leader position will be maintained by building stronger relations with existing large size customers and also attracting new ones. Word count =3142 Page 19 of 40 . Aggressive Promotions: BPL previously did not promote its product aggressively. Many customer areas have remained untapped because BPL did not approach them. This also means that BPL should increase the number of distributors from current 3 to at least 5.Marketing Plan 4. This will enable BPL to expand its coverage.Marketing Objectives Defend current market share: BPL should maintain its current market share of 46% in 2006.

258 6.jsp? DivID=16&cPath=145_150&ContentID=1201> Winer.pk/divisions/ContentInfo. Harcourt College Publishers. p. Upper Saddle River. <http://www.pk/divisions/ContentInfo. Expert Advisory cell. P.sg/apac/PakLtdAboutUs.A. 2nd edn.pk/Industry_Data/textile_vision. viewed at 23rd September 2005. Bibliography Page 20 of 40 . Islamabad’. <http://www. Upper Saddle River.pakboi. 318 Ministry of Industries. US.jsp? DivID=16&cPath=145_150&ContentID=1196> Ministry of Industries. Production & Special Initiatives 2004.M and Speh. last updated 14th May 2004.pakistan. Digest of ‘Industrial Sectors in Pakistan. Islamabad’.pakistan. Production & Special Initiatives 2004. ‘Marketing Management’. ‘Marketing Management’. Pearson Prentice Hall.T. ‘Business Marketing Management: A Strategic view of Industrial and Organizational Markets’.gov. <http://www. Pearson Prentice Hall. Reference BASF Pakistan Private Limited 2004. last updated 14th May 2004.Marketing Plan 5. p. Viewed at 20th September 2005.asp> Board of Investment Government of Pakistan 2004. Expert Advisory cell. Prospects of ‘Chemical Industry in Pakistan. Islamabad’. New Jersey. 2nd edn. ‘Textile Sector. viewed at 23rd September 2005.com. 2001.gov.gov. Pakistan Investment guide. R 2004.basf.html Hutt. < http://www.P and Keller. viewed 23rd September 2005. 12 edn. 365 Kotler. 2006. New Jersey.

gov. 365 Kay. New Jersey. Islamabad’. Prentice Hall. Pearson Prentice Hall. 2nd edn.A 2006. retrieved from ProQuest database Board of Investment Government of Pakistan. 2004. ‘Business to Business Marketing’. viewed 23rd September 2005. viewed 19th September 2005.gov. ‘An empirical framework developed for B2B e-business models’. Journal of Marketing Science. viewed 23rd September 2005. vol. 2005.pakboi. 2nd edn. vol.pk/divisions/ContentInfo.basf. Islamabad’.pk/divisions/ContentInfo.27. R.T. <http://www. 258 7. Prospects of ‘Chemical Industry in Pakistan. viewed at 2nd October 2005.20. Islamabad’. P. last updated 14th May 2004. P.sg/apac/PakLtdAboutUs. ‘Marketing Management’. p. Production & Special Initiatives 2004. ‘Business Marketing Management: A Strategic view of Industrial and Organizational Markets’. Production & Special Initiatives 2004. Harcourt College Publishers.pk/Industry_Data/textile_vision.Marketing Plan BASF Pakistan Private Limited 2004. Pakistan Investment guide. Marketing Management. Strategy Page 21 of 40 . 2004. 2001. The journal of Industrial and Business marketing.281. retrieved from ProQuest database. 12 edn. ‘Digest of Industrial Sectors in Pakistan. Upper Saddle River.jsp? DivID=16&cPath=145_150&ContentID=1196> Ministry of Industries.S. Expert Advisory cell. Kotler. New Jersey. P.pakistan. p. <http://www. Expert Advisory cell. Orlando.jsp? DivID=16&cPath=145_150&ContentID=1201> Winer. ‘Textile Sector. viewed 20th September 2005.asp> Barbara.P and Keller. last updated 14th May 2004. 318 Ministry of Industries.218. <http://www. < http://www. viewed 23rd September 2005. Upper Saddle River.com.html Hutt.pakistan.gov.M and Speh.M 1999.

2. 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.Porter’s Generic Strategy BPL will have to adopt the strategy of overall cost leadership for achieving its stated objectives and goals. As stated in the objectives BPL will achieve lowest production cost by reducing operating.Dyes usually take a large segment of market by selling the lower cost product which is also off course inferior in quality. Targeting and Positioning 7.1. administrative and financial costs.Segmentation. 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.Marketing Plan 7. 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.2.B. 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. 7. By adopting the cost leadership strategy it will be able to attract more segments of market so that it serves both. 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. Market Segmentation Page 22 of 40 . and has been seeking quality leadership and thus so far maintained the highest market share.1.

Marketing Plan Based on (Shapiro & Bonoma 1983) market segmentation would be done on four segmentation variables which are Demographics. Page 23 of 40 . The customers are of all kinds. The other area which has high customer base but small businesses is the north side of Pakistan with customers scattered in cities like Lahore. 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. There are heavy and medium users who usually buy in large quantities and even light consumers which have small businesses. Purchasing approaches and situational factors. Faisalabad and Gujranwala. BPL caters to all types of users but prefers heavy and medium users presently. Operating Variables: The operating variables here are concerned with the purchasing capabilities of the customers. Purchasing approaches: There are many purchasing approaches by different customers and the supplier has to understand them in order to capture the market. 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. Operating variables. BPL serves those customers which are seeking high quality and good service at a higher price. Demographics: Here the market would be segmented according to geographical areas as to which parts of Pakistan should be served.

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 has already created a niche market of those customers who are looking for best quality binders. These customers are located mostly in North in cities like Faisalabad. Gujranwala and Lahore. the competitive structure and the organizations experience in the market (Cravens & Piercy 2003). the expansion will bring results only if the newly appointed distributors have technical skills also. 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. Market Targeting Targeting a marketing segment depends on such factors as the maturity of the market. 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. Geographically scattered customers whom BPL is unable to serve directly because of its thin sales force.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. To target geographically scattered customers BPL plan to expand its distributors base. 7. However.2. Price conscious customer who can compromise on quality b.2. While appointing new distributors BPL should also ensure that they have sufficient and suitable warehousing facility to store Binder ET. Page 24 of 40 . BPL serves both small and large orders but for those which require sudden delivery depends on location. However there is a potential market of: a.

In this regard BPL’s marketing team should schedule yearly planners to organize trails at customers’ premises. 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. Page 25 of 40 . trade shows so that majority of the customer can attend and learn about the product. Market Positioning BPL has positioned its product as the most superior in quality made for quality conscious consumer. dinners. 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.3. 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. The marketing team of BPL therefore has the strategy to organize seminars. 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).Marketing Plan 7. interaction with sales force is still imperative for the trial of products. This new message will have to be highly promoted. However. therefore they cannot cover door to door customer.2.

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.Marketing Plan 7. however. 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. This strategy would be hard to adopt because of the nature of the product such as Binder ET. 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 cost of drums was also included in the total cost. 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. Page 26 of 40 . Previously.3. Kotler 2006) the product strategy at the maturity stage can be of product modification or replacing the old product with a new one. its quality can be enhanced and as mentioned earlier BPL is the leader in quality amongst all the competitors.Marketing Mix 7. As it is a chemical product its features or style cannot be enhanced. Binder ET being a vicious liquid was packaged in small drums specially made for the product and then transported to the customer.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.3. Based on (Haas 1982.

3. Pricing Strategy The competitors are posing a big challenge to BPL by capturing a large percentage of market by lowering their prices. Secondly BPL can offer rebates and discounts on achieving a set target of purchase volume. As Clariant has a high portfolio of products for textile customers it is. 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. However. Competitors like Sandalbar have always been selling at lower cost targeting a particular segment which looks for lower priced binders of inferior quality. unlike BPL. to customer this is an added advantage because they get refund on packing cost.2. 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.e. with large customers as mentioned above BPL can install storage tanks thus can eliminates drum cost. This policy should be across the board for all customers. not highly dependant on the sales of its Binders and is therefore quite willing to lower its price and increase its sales.Marketing Plan 7. Page 27 of 40 . 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.

One way of distributing is through its own salespersons and the other is through industrial distributor.3. Trade shows play a very important in industrial goods.3. The problem can be solved either ways. 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).3. BPL does not want to increase its sales force for the time being since it does not want to increase its operating cost. Placing Strategy As described earlier BPL has two different sales channels.4. This makes it difficult for BPL to give coverage to small customers. Page 28 of 40 . BPL has to focus on appointing distributors with technical expertise and than maintaining close contacts with them.Marketing Plan 7. The customers that BPL is serving require technical services. sales promotion. that is. 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. One of the problems that BPL is facing is that it has thin sales forces in comparison to its competitors. Promotion Strategy Amongst the promotion mix. by increasing its own sales force or by hiring industrial technical distributors. public relations and personal selling are the most important tools for a company like BPL. These customers currently are being handled by distributors and BPL provides very basic and minimal technical service to these.

and has helped BPL to improve ecological conditions and to meet National Environmental Quality Standards. It can offer scholarships and loans to deserving students. According to Haas (1984). It has a Biological Wastewater Treatment Plant installed which exhibits a manifestation of Responsible Care.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. offering free trial or probably even selling the first order at a very nominal price.000 gallons of water per day. The other important tool in the promotion mix is Public relations. Public relations help in influencing the overall image of the organization. 17. free of cost (BPL 2005). The other important area to be looked upon is that of consumer promotions. Page 29 of 40 . An important win over competitors can be to offer the customers rebates or trade up on purchasing larger quantity of Binder ET. BPL will have to induce the consumers to try its product. BPL has already influenced its public image. BPL will have to improve relations and focus more on large size customers.000 gallons are released to the neighboring village. 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.000 gallons are reused within the Factory and 14. This will result in high revenues and will help great deal in defending its market share. 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. This plant treats 31. 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 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.

Marketing Plan 8. 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. They are Negotiate one year contract with raw January 2006 to March 2006: material supplier Appoint 2 new distributors The first quarter will be important because all the necessary plans required to achieve objectives will carried out in this quarter. Discuss agreement with new distributors Finalize deal with raw material supplier Page 30 of 40 . The negotiation with suppliers will have to be finalized too. 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. Feb 06 Figures 3a and 3b show the monthly Action plan schedule for the rear 2006. From the month of March there will be meetings held with distributors and they will be carried out every two months. Action Program F Jan 06 now further explained in quarterly periods.

A meeting with the distributors will be held in May. textile engineering students. There will be a trade show and seminars will be conducted in Karachi and Lahore and all potential customers will be invited. Lahore and Islamabad to announce scholarships for Monthly meeting with all distributors Page 31 of 40 . F Jul 06 Aug 06 Arrange seminar July 2006 to September 2006: to announce The new customers will be given trial free trials of theto product with the required technical Free offers scholarship for service and training so that they are satisfied before purchasing the product.Marketing Plan April 2006 to June 2006: The second quarter will be marked with aggressive hunt for new customers. In doing so the existing customers will also be served and there would be large storage tanks installed in the premises of these customers. Seminar will be arranged in Karachi. The month of August and students September brings a start to new admissions in college and universities in Pakistan. In the same new customers textile engineering month the bi-monthly meeting with distributors will take place.

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. Now once BPL has made new customers it will have to retain them and grow its business. 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.Marketing Plan October 2006 to December2006: BPL expects new customers to do business with it by August. Page 32 of 40 . In month of December there will be a review of the objectives and targets set and how far have they been achieved. In October BPL will ask its new customers if they want the storage tanks to be installed in their premises.

Page 33 of 40 . • Report on new customers: A report will be issued bi-monthly about new customers. Controls The action plan is followed by effective controls measures to be carried out in order to ensure the effectiveness of the marketing plan.monthly meeting with the distributors to check their performance and finding out if they require any technical service. • Monthly sales report to be issued: A sales report on total unit sales have to be issued to check any movement in the sales. • 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. • Bi-monthly meeting with the distributors: There will be bi. any drop in the market share will send a strong message to the marketing team. If sales are below target than strong steps will have to be taken by the marketing department. If the report shows a positive trend of customers growing in number than this means that the plan is working well. • 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.Marketing Plan 9. financial costs and administrative costs will have to be checked through out so that they are maintained according to the stated objectives. A number of measures to be taken are follows: • Check on the all the costs related to production: The operating costs. A good integration between all the departments is required in order to achieve the target.

2 Other Operating expenses Administration cost Page 34 of 40 .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 .Marketing Plan 10.

18 12.7 76.18 4% 2% 2% 2% 2% In 2006 govt is announcing interest rate cuts.14 106. Financial cost Earning before tax Tax @ 45% Profit 21.18 274.33 9.18 225.315 182.1 Fixed Manufacturing Cost Transportation cost Selling Cost Contribution Margin . Gaining huge discounts 50% and reducing operating cost by 10% 2% Sales Volume Distribution cost PKR mio 609 18.2 Other Operating expenses Administration cost 304.27 Operating cost (raw material and packing cost) Other variable manufacturing cost Contribution Margin .05 24.5% Profit and Loss Statement of Binder ET for the year 2006 projected Percent of total sales volume 3% Strategy to have agreement with major raw material supplier for bulk purchase.56 17.36 12.Marketing Plan Assumptions: Textile chemical market will grow at 5. Another opportunity is that BASF global company has agreement with Deutsche Bank for financial services of all group companies therefore better 4% rates will be available.5 12.50 Page 35 of 40 .135 12.2% 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.

BPL will set a price with the suppliers which will remain constant through out the year under any circumstances. Page 36 of 40 . The other major threat to BPL’s marketing plan is from the competitor’s side. 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. According to the plan BPL will only appoint two distributors in order to serve the customers. To deal with this issue BPL will have to sign a whole one year contract by taking a forward cover on any price fluctuations. 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. even sacrificing their own profits in order to steal BPL’s market share.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. Local manufacturers may respond by lowering their price. 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. that is. Oil prices have a larger impact on the cost of raw material purchase by BPL.Marketing Plan 11.

distribution channel has to widen and more aggressive promotion has to be carried out in order to achieve the target. 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.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. For the smooth working. The product quality has to be maintained as it is. Word count = 3309 Page 37 of 40 .Marketing Plan 12. price advantage has to be given to customers on packing as well as quantity purchases. Strong economic growth of Pakistan also ensures healthy environment but increasing competition is a threat to BPL’s share. With these strategies the target market has also increased and BPL will have to tap this market in order to maintain the market 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. controls along with a contingency plan are made in order to see the marketing plan through in the year 2006.

54-288. ‘Strategic Marketing’. McGraw-Hill/Irwin.T and Shapiro.P and Keller. ‘Marketing Management’.300-444 Peter.B. 1982. 7th edn. New York. MA: Lexington Books) Craverns.A. 2006.Marketing Plan 13.D and Piercy. Pearson Prentice Hall.J. NY. Kent Publishing Company. 1983.135 Haas.R. pp. 2nd edn. ‘Segmenting the Industrial Market’ (Lexington. New Jersey. Pp.N. Reference Bonoma.169-239 Kotler. USA.J and Donnelly.123-124 Page 38 of 40 . 7th edn. McGraw-Hill/Irwin. 12 edn. 2004. P. 2003. Massachusetts. Pp . ‘Marketing Management: Knowledge and Skills’. Upper Saddle River. ‘Industrial Marketing Management’.

p.pakboi.R 1982. Kotler. Industrial Marketing Management. Islamabad’. 2006.A. ‘Marketing Management’.20. retrieved from ProQuest database.Marketing Plan 14. Production & Special Initiatives. viewed 19th September 2005.B. viewed 23rd September 2005. Pp. 2004. Massachusetts.N 2003.pk/Industry_Data/textile_vision. 2004.54-288.P and Keller. <http://www. 2005.gov.sg/apac/PakLtdAboutUs.jsp? DivID=16&cPath=145_150&ContentID=1201 Page 39 of 40 . < http://www. (Lexington. 1983. Upper Saddle River. last updated 14th May 2004. 12 edn. P.asp> Board of Investment Government of Pakistan. viewed 20th September 2005.pakistan.Pp. MA: Lexington Books) Craverns.html> Bonoma. Pakistan Investment guide. McGraw-Hill/Irwin. ‘An empirical framework developed for B2B e-business models’. ‘Segmenting the Industrial Market’.27. 2nd edn. New Jersey. viewed 23rd September 2005. retrieved from ProQuest database BASF Pakistan Private Limited. 7th edn. vol.basf. viewed 23rd September 2005.jsp? DivID=16&cPath=145_150&ContentID=1196> Ministry of Industries.gov. Journal of Marketing Science. Islamabad’.Bibliography Barbara.pakistan.S. p.pk/divisions/ContentInfo. Prentice Hall.300-444 Ministry of Industries. Strategic Marketing.T and Shapiro. <http://www. ‘Textile Sector. The journal of Industrial and Business marketing. ‘Business to Business Marketing’. vol. ‘Digest of Industrial Sectors in Pakistan. last updated 14th May 2004. 2004.169-239 Kay. Production & Special Initiatives. ‘Prospects of Chemical Industry in Pakistan.135 Haas.281.com.M 1999. Expert Advisory cell. Islamabad’.pk/divisions/ContentInfo. viewed 2nd October 2005.218.gov. Expert Advisory cell. <http://www. New York.D and Piercy. Kent Publishing Company. 2004.

J. McGraw-Hill/Irwin. USA. NY.123-124 Page 40 of 40 .Marketing Plan Peter. ‘Marketing Management: Knowledge and Skills’. 7th edn. Pp. 2004.J and Donnelly.