Post on 03-Apr-2018
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EXECUTIVE SUMMARY
Throughout the course of Principles of Marketing, the essence of marketing and
its application has been emphasized. For an organization, not only its immediate
and competitive, but also macro environment is important as it needs to survive
and sustain itself whilst operating in these environments. Spice industry all over
the world can be referred to as a subset of the food industry. Spices stand at
prominent positions in Pakistani imports and exports.. The spice industry of
Pakistan annually grows at a rate that is above 50%. Within this industry, 80%
market share is with unbranded loose spices and the rest with branded packed
spices. Shan Foods and National Foods both are the leaders in branded packed
spice category each holding 40% share in 2010, while other prominent players
include Chefs Pride, Ahmed Foods, Habib Foods and Zaiqa Foods. Shan Foods
was founded in 1981 in a single room as Shan Masala. Later, due to its
popularity, it went on to become Shan Foods. It has presence in 60 countries
today and deals in six broad categories of offerings. Shan Foods has capitalized
on the changing market trends and consumer tastes and through product trials, it
has made sure to churn out offerings that are best in line with consumer tastes. It
maintains global presence primarily through exports and follows more than one
growth strategy simultaneously. With fourteen departments and state of the art
technology and customer focused marketing strategies and campaigns; Shan
Foods has become synonymous with authentic traditional cuisine of good quality
and taste.
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MISSION AND VISION
COMPANY MISSION AND VISIONShan Foods mission explains its success, To continuously develop and
produce quality products that meet the customers and markets demands,
compatible with applicable regulatory requirements. To be a consumer oriented
company with keen insigne of food products ensuring quality panty consistency
and authentic taste to operate with state of the art technology to obtain optimum
results and retain highest quality standard thrived efficient and motivation
human resource and inculcate in them a sense of participation and proved for
personal goals and development.
Shan Foods vision is to be a dominant global player in food products and
socially responsible company that attains its quality standards so that Shan
stands for tradition, trust and good taste.
ANALYSIS OF MISSION AND VISIONShan Foods through its mission and vision want to project their ambition to become
a global leader in food products while maintaining quality standards so that its
name becomes synonymous with these two phrases. It intends doing this by
maintaining its focus on their customers and the applicable regulatory requirements
of the markets it is operating in, be it local or international. Along with these core
values, it intends preserving and upholding other values like purity, authenticity and
consistency; which it credits for the phenomenal growth it has seen over the past
decade. The company intends to grow on the back of cutting edge technology, with
the proven best practice of CPI (Continuous Process Improvement), and it realizes
that a major portion of its past success and the future drive towards its development
and the achievement of its goals will be hinged on the motivation level, the training,
and ultimately the efficiency of its human resource.
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INTRODUCTION TO SHAN FOODS
ORGANIZATIONAL HISTORYShan Foods came into existence in 1981 when it began operations from a single room.
Shan Masala as it was back then, launched full range of spices to cater to local public,due to its popularity. Shan started exporting after a few years due to increased
international popularity. But after sometime, the need to reposition the brand was
felt. It needed to be repositioned as a food brand rather than a spice brand. Re-
imaging the organization became necessary for re-positioning of the brand; it was a
job well done and led to continued success of Shan on national and international
fronts. Now, Shan Foods is well known as a brand of easy to cook mixes for
Pakistani food. The name of Shan Foods has become synonymous with highest
quality and exquisite taste. It continues to carry on, the tradition of authentic cuisine
to farthest parts of the world. There are six broad categories of varieties Shan deals
in including recipe mixes, plain spices, dessert mixes, basmati rice, pickles and salts.Today, Shan Foods has presence in 60 countries. The brand is exported to UK,
USA, and Middle East and now to Far East regions as well
Organizational Hierarchy
Shan Foods comprises 14 departments all together:
1) Supply Chain
2) Information Technology
3) MIS
4) Procurement
5) Engineering & Services
6) Production
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7) Communication
8) Human Resource
9) Export
10) Import
11) Quality Control
12) Research & Development
13) Sales
14) Marketing
Following is the organizational hierarchy of Shan Foods
In the below hierarchy:CEO: Chief Operating OfficerGM: General Manager
BM: Brand Manager
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ManagingDirector
CEOGeneral Marketing &Manager Sales Exports
Director GMDirector /GMSales Office(Production) Director GM Manager
Director GM Regional Sales BM (plain spices,(Procurement) Manager instant mixes)
Territory Sales CategoryManager Owners
Regional Sales CategoryManager Owners
Territory Sales CategoryManager Owners
Regional SalesManager
Territory SalesManagerRegional Sales
ManagerTerritory Sales
Manager
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TARGET MARKET
Females aging from 18 to 45 years compose the main target market of ShanFoods. This is because of the reason that in our part of the world, women are
mostly related to the food and cooking. Hence, Shan Foods develops productsthat are according the needs and wants of these women no matter if they arestay-at-home or working, single or married ones.
OBJECTIVESBusiness objectives
Shan takes pride in its practices regarding client and customer interaction as
derived from Islam. Their strong connection and respect for Islam drives the
companys core values. Therefore they have agreed upon not to accept anything
but the best in raw material from the suppliers as Islam teaches to entertain our
Islamic brothern similarly as we would treat ourselves.Driving from the same concept of Islam Shan Foods also provides quality to its
utmost limits in the products that it offers. Its is the main reason for their how cost
as Shan Foods has the latest technology which is one of its kind in south east
Asia. The V-look technology and the coal grinding technology is only an example
to their dedication to provide nothing but the best to their consumers.Its the world class quality that brings the blind trust of the consumers on Shan
products that it will not only be hygienically prepared but would be secure from
any harmful ingredients that loose spices offer.
Value proposition of Shan Foods is to be receptive towards innovation and
experimentation in food and in life, while remaining a brand that will provide the
highest quality products to its customers and will never comprise on this idea.Shan food considers all major food brands, packed and loose, retailers brands,
ready to cook or raw food as its potential competitor. The direct competition is
with National Foods, Meehans, Sheehans, Ahmeds, Youngs and the like.
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Marketing objectivesAs the strong connection of the Shan Foods owners with Islam, the company
does not believe in advertisement heavily on any advertisement medium. Since
the product offerings are seasonal the company does advertise in Ramadan and
come with its advertising campaigns. Shan advertisement does not show any
celebrity or prominentfigure to drive sales, rather it just compromises of show-reel showing hands with
background music and rotating dishes. The company also conducts BTL
activities and holds up demonstrations of cooking with its Spices and product
offerings on different venues. All the marketing strategies are customer centric or
customer oriented so that it can leverage on already well-developed consumer
goodwill for the company.Shan due to its consumer centric marketing strategies and with market
intelligence has started targeting teenagers as they are the future decision
makers in households. Shan is aiming to educate and persuade the teenage
population with innovative campaigns and with demonstrations to provide them
complete information on not only Shan Foods but also regarding the superior
quality that if offers to them. This is a very strategic move as when the time willbe right, Shan usage will increase many folds because these teenagers will then
already be loyal to the Shan product offerings
With its proactive research and development department Shan is always on the
move to newer and better opportunities that it can cash upon. Regardless of this
it has not filled some basic gaps such as products for fisheries and the likewise
cuisines
GROWTH RATE
The food industry in Pakistan is a developing industry and is witnessing growth.
The main reason behind this is that buyers have started to shift from loose to
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packed spices, thus changing the cooking and eating habits. The claimed growth
rate of the entire industry is more than 50% annually.Shan Foods with a colossal annual growth of more than 50% was quick to
respond to the driving forces and key success factors of the industry and today, it
proudly is the most preferred spices company. It has become the industry giant
holding almost 40% of the market share belonging to the branded spice dealers.
It has over the period of time, managed to win the heart share of consumers that
has translated into its brand loyalty and true friendship with consumers.
Company Products
Products Range of Shan FoodsThe products of Shan can be broadly categorized into 6 categories, with multiple
sub-categories. The different product offerings of Shan Foods are:
Recipe Mix
- Biryani Mixes
- Stir Fried Foods
- Curry Spice Mixes
- Deep Fried Foods
- Barbeque
- Vegetarian Foods
- Instant Foods
- Breakfast
Plain Spices
- Khushbudaar Lehsan
- Zaiqedaar Adrak
- Khatta Khatai
- Qasuri Methi
- Karara Zeera
- Taiz Laal Mirch
- Taaza Dhaniya
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- Zaafrani Garam Masala.
- Teekhi Kaali Mirch
- Khaalis Haldee
Dessert Mixes Basmati Rice
Pickles
Salts
Even after having more than just spices in the portfolio, Shan is considered the
Recipe Mix expert. Within Biryani alone it has nine different variants, two spicy
and seven milder ones. And it is the first one to come up with Taaza Dhaniya in
the Plain spice category. Every single offering of Shan has its own identity.Product Offerings within Spice Mix CategoryThe Spice mix division at Shan Food Industries happens to be the oldest product
category of the company. The category has a total of 67 different products, which
are broadly divided into 11 categories, some of these categories are Authentic Curries
Traditional Stir Fries Tasty Instant Food
Tempting Vegetables
Delectable Biryani
Sumptuous BBQ
Lavish Fried Food
Yummy Chat
Looking at the product portfolio of Shan Foods, it is seen that Shan Foods has given is
consumers an offering for every occasion and every type of taste. Be it traditional cuisine
mixes like Biryani or an offering in the Dessert category; Shan has an offering to
complement all the good things in life associated with food. Out of all its categories, the
Spice Mix category is the oldest and is still used synonymous with the name Shan i.e.
Shan Foods is still referred to as Shan Masala by many. This shows how strong the
spice association is with Shan Foods. Other categories like Basmati Rice, Dessert
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Mixes, Pickles and Salts were introduced later. It is seen that Shan itself promotes its
Spice Mix category most with minimal or no marketing expenditure on the rest of its
categories. Shan advertises its traditional recipe mixes and spices the most, because it
wants to remain top of the mind and top of the heart brand. Shan Foods is believed to be
the leader in the Spice Mix category and it takes utmost effort to ensure that the
leadership crown is not worn by anyone else but only Shan Foods. Following is what
some offerings from Shans product portfolio look like:
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Micro enviorment
Supplier
Suppliers can seriously affect the shan foods marketing. They provide the resoures
needed by the shan food company to produce its goods.Marketing manager policies
are affected by them.
Public
Public is a group that has a actual interest in the company. Shan food company
identify the public that affect its strategies. These are fellows.
o Financial publics
o Government public
o Media public
o General public
o Internal public
Customer
Consumer markets consist of individuals and households that buy the products for
personal use. Their taste for the product can be changed at any time, in result, the
company enviorment is distrubed.
Market intermediaries
Any disput with market intermediaries can cause of decrease in sales. Companies
whole environment is affected due to them.
Technology
Shan food uses the latest technology to produced its product. In 2012 shan import
the machienary for packing the products. This machine can pack upto 30,000 packet.
Strategic and Marketing Analysis
Market Segmentation:The market segmentation can be explained by defining demographic, geographic,
and behavioral factors that are most important for Shan Foods.Demographic FactorsThe basic demographics that Shan caters to are the women of today belonging to
age group of 18 years and above with socio-economic class of middle lower of
above. Her martial status can be married or single, cooking for the household or
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just trying out new things
Geographic FactorsShan food has not segmented itself on the basis of geographical segmentation. Their
distribution ranges from valleys of Quetta to the Khyber Pass and to the seas of
Karachi. It has more than 500 distributors in its supply arsenal. However some recipes
are more famous in particular areas of the country than others because of sub-culture
preferences. For e.g. the white Nihari, Sindhi Biryani, & Qorma mix are in huge demand
in Karachi and the demand in Lahore consists mainly of Pulao, Murgh Choley & BBQ
mix.Behavioral Factors:Being born Pakistani, loving food is in our blood. Spicy and delicious food is a main
part of our lives. Be it the celebrations of Eid or marriage ceremony of a beloved,
its the food that give colors to the events and that bring the relatives for a quality
timeAnother behavioral factor is related to the double income phenomenon that is
growing everyday. Both the man and the woman of the house are earning to
support the family and they require ease and convenience when it comes to
cooking factor.
The purchase behavior changes according to the seasons. If on one occasion Fruit chart
masala is in demand because of Holy Ramadan, BBQ mixes could be in demand on Eids
or in summers when families invite friends over on BBQ parties. The Haleem & BBQ mix
are in greater demand during the winter season while Chana Chat mix is purchased more
often in summers
SWOT ANALYSIS SHAN FOODSStrengths
Shan food has a very strong heritage and legacy behind it which has given it a
strong goodwill in households.
Shan foods enjoys an approximately 50% market share in the recipes mixes
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category.
Shan foods is a leading exporter of food items from Pakistan providing it an opportunity to tap
the large global market which helps it to expand at a rapid pace.
Shan has a wide range of products and SKUs available consolidating its presence
in various niches and keeping its customers loyal to the brand.
Weaknesses
Shan is not present in Jams and marmalades, Ketchups categories like National
foods thereby loosing an opportunity market. Many loyal Shan customers purchase
National products in these categories which is causing loss of potential sales.
Shan has a low market share outside Karachi in the Punjab market where National
enjoys market leadership. This is due to weak distribution of Shan products in
Punjab market which is causing loss of potential sales.
Opportunities
Shan can vertically integrate to produce its own raw materials which will not only
reduce costs but will also provide it more control over the quality of input.
Shan currently has a very low advertising spend in the FMCG industry. It can
deploy brand activations and other innovative campaigns to switch customers from
the loose/ unbranded segment to Shan products.
Shan can also horizontally expand its scope like national foods and enter the other
related food categories where it can tap its loyal customers with minimal extra
efforts.
Threats
The biggest threat to Shan is the high inflation in Pakistan coupled by a global
recession which is putting pressure on the profits and sales.
The prevalence of counterfeit products is also threat to Shan causing loss in
goodwill and potential sales.
The emergence of newer brand with deep pockets can also damage Shans
market share due to heavy advertisement while keeping the product quality
close to that of Shan
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RATING AGAINST CUSTOMER BUYING CRITERIA
The table below suggests what is the weight age customer gives to each of
the non priced attributes and how is Shan and National performing against
them
Shan NationalQUALITY & PRICE
Non Price AttributesWEIGHTAGE
affecting Customer%
ChoiceProduct-Related %1. Quality 25 22 222. Packaging 10 10 103.
Variety
1816
14
5. Brand Name 15 14 12Service- Related %1. Recipe 20 18 152. Availability 12 8 10
Positioning
Shan Foods position statement is To the confident and convenience seeking woman
of today, our wide range of Shan spice mixes offer premium quality products, made
with the finest ingredients like no other. It is just for the fact that the consumers should
be provided with solution of having a tasty meal in no time with home made mixes of
recipes and spices
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Positioning Map
Brand
Other players in the industry are:
Mehran Foods
Ahmed Foods
Habib Foods
Zaiqa Foods
Kitchen Secrets
PRICING POLICIES, PROMOTIONAL AND DISTRIBUTION PLANSShan Foods is present in 6 broad food categories which are as follows:
Recipe Mix
Plain Spices
Dessert Mixes
Basmati Rice
Other
5%
Chefs
pride
15%
Shan foods
National foods
40%
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Pickles
Salts
Though there are many competitors in the Spice Food business, but the main competitor or
rival of Shan Foods is National Foods. Shan has a strong market share in the Recipe mixes
category from which it derives most of its revenue. Shan is most famous for its Biryani Masalafor which today it has nine different variants.
Pricing PolicyThe pricing of all Shan offerings varies and depends on each Stock Keeping Unit (SKU).
However, the price ranges for five (out of six) categories of Shan product offerings are as
follows:
Recipe Mix:
The Recipe mixes range from Rs.20 to 45
Plain Spices:
Pricing of Plain spices varies SKU wise. For example, 50 grams red chilli powder is
available at a price of Rs.40 and150 grams at Rs.120
Dessert Mixes:
Desserts are all priced at Rs.40
Pickles
Pickle pricing is Rs.170 for 1000 grams, pricing varies also.
SaltsIodized salt is priced at Rs.25 (800 grams) and plain salt at Rs.22 (800 grams)
It is seen that on a general note, Shan Foods offerings are based on parity pricing and are
similar to those of its rival National Foods. According to sources, this similar pricing is not
due to any price war that exists between both companies but is because the raw materials
of both are similar in nature for many offerings. If the cost of raw materials increases, both
have to increase their prices and again their prices show similar trend after increase.
PromotionThe estimated marketing budget for Shan is Rs.100 million for all their ATL and BTL
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activities in the year 2012. The company does most of its marketing on seasonal
basis especially before and during Ramadan and near Eid. The breakdown for the
budgeting is 80% for ATL activities and 20% for BTL activities. In the recent times
Shan has put more emphasis on its export and only comes up with new marketing
campaign for new products.
Shan does not advertise as a ritual and can be termed as quite conservative when it comes to using
mass media fro promoting itself. It does not believe in advertising rigorously. The advertising is done
seasonally only; however it does conduct certain promotional campaigns and activities. Almost all of
Shans promotions are addressed towards women. The advertisements of Shans offerings focus
entirely in the females of the family. The marketing strategy is very customer oriented i.e. Shan
emphasizes on marketing its products keeping in mind its customers thus having a customer centric
view. Such a marketing strategy allows it to leverage on the goodwill already in the market.
It has started to reach out to a wider audience keeping in mind the changing lifestyle to
nuclear families and convenience seekers. Shan has recently realized that a potential part
of the population i.e. the teenagers are the ones that will become tomorrows decision makers. Thus, it aims at informing, reminding and persuading teenagers through
innovative campaigns with proper information regarding the superior quality of Shan
products. This way, Shan will be their most preferred choice when they become the
decision makers in the kitchen.More recently, the major marketing or promotional expenditure done by Shan Foods is on
making deals with television channels for their commercial air time. One of their most
recent deals was with Geo news and Geo entertainment in which they committed Rs. 12
million for one month of heavy advertisement in both prime and non prime time
advertisement. Few of the BTL activities that the company does and plans on continuing is
branding of shows in which the contestants can directly interact with the host of the cook.
Along with that it also does mall activities which is direct marketing to educate the potentialconsumers.
Distribution
At Shan Foods, special care is placed upon meeting market and customer demands
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in a fitting and timely manner. It is therefore, ensured by the Supply Chain team that
goods or shipments reach their destinations well in time to match market trends and
customer demands.Shan makes sure that its authentic brands are distributed by efficient and top of the line
distributors. Shan has a separate Sales department focusing on International Modern Trade
(IMT) and Local Modern Trade (LMT). This department maintains direct relationships with
variety of shops to meet their customized requirements. This practice helps Shan to keep a
close and direct relation with high sales outlets which is pivotal for its greater profits and
market share.Sales teams are totally monitored by Territory Sales Manager (TSM) and Regional Sales Manager
(RSM). Shan Foods helps by extending all possible marketing support to its distributors in to create
awareness of its quality products in the international market in mutual sustainable business
interest. Companys TSMs and RSMs work on the basis ofarea wise policy for distribution, be it local distribution or export. Products are distributedon the basis of geographic segmentation. For instance, in posh areas no display of the
sachet packs will be seen in the stores whereas in underprivileged areas only sachets are
supplied.In Pakistan alone Shan has 500 distributors; from Karachi to Skardu. The sales force of
Shan supplies its products to these distributors and some direct distribution is also done
mainly in Karachi market.The distribution channels of Shan Foods include:
Retail
Wholesale
Hyper Markets
(e.g.Macro)
International Chains
(e.g. Wal-Mart, Carrefour, Lulu Hypermarkets, Panda, Safeer, Mall of the Emirate,,
Reliance India)Shan is the largest exporter of premium quality packaged spices, spice mixes, food mixes, rice
mixes to USA, Canada, UK, Germany, Holland, Malaysia, Middle east, South Asia, Japan,
Singapore, Australia, and many other countries of the world.
It also exports its products to the Far East, Bhutan, Japan, Malaysia, Singapore, Thailand
etc. In totality, it has its presence in almost 60 countries worldwide. It is the first Pakistani
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brand that has been officially launched in India and Shan foods plans to extend its
availability in other lucrative markets around the world. The Above The Line (ATL) activities of Shan foods include advertisements on television,
radio and print (magazines and newspapers). Following are some of its famous ATL
campaigns
Expert
Ramadan ad
Radio ads with tara ra ra ra music
Backgrounds music with rotating dishes
Khanon mein shaan Shan Zindagi Asaan
5 mins Qorma
Following is an ad of when Shan Foods launched its pouch pack for Achaar (pickle):
Some of the Below The Line (BTL) activities done by Shan Foods as part of its promotion
are as follows:
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College Activities
Cooking Demonstration Programs
Activities/ Programs involving localities
(E.g. programs for Memon community in areas of Bahadurabad and Sindhi Muslim
Society Memoni Biryani Masala)
Product and new product strategies and pipeline
Growth Strategy
Pakistans food industry is growing rapidly and is on the growth stage of its life cycle.
The prime reason for that is that consumer are becoming brand conscious these days
and are switching from unbranded looses spices to packed branded spices which in
turn indicates that cooking and eating habits are also changing. The growth rate of
whole industry currently is more than 50% annually, which is phenomenal opportunity
for company like Shan to capitalize by filling that gap.
Shan was vigilant and responded well enough to the market conditions. Today
Shans growth rate is more than 50% and it is industry giant having about 40% of
the share of branded spices industry. Shan has remained successful in achieving a
soft corner in peoples hearts which has resulted into a strong brand loyalty.
Its very difficult to compete in spice industry with top-down or centralized
organizational structure because of the fact that different departments
performances are inter-dependent. Shan realized this and it now has decentralized
structure. Every worker is welcomed to participate in decision making and cancome up with new ideas and thoughts to improve the product or the production
process. This helps the strategist in understanding that what is attitude of an
average employee about the company and that feedback aids in forming better and
improved strategies. By involving employees in decision making process gives
employees a sense of ownership and they feel right at home where they have a
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say.
Product Strategy
Shan in an entrepreneurial venture and it is following market development strategies,
product development strategies and penetration strategies as it is expanding its
product line to new customer base in various locations, setting up product lines such
as spices, pickles, etc and sustaining its global position mainly through exports. Shanhas great prefers vegetable. Similarly in Pakistan Shan has wide range of meat mixes
as people are meat lovers and highly prefer meat diet. Shan is currently present in
over 60 countries and is performing to maximum of its potential to become the global
leader. Therefore, based on conceptual understanding form the Strategic Marketing
Management course, it can be called a transnational.
Shan Foods has the competitive edge of technology and innovation. Company develops
new methods and techniques to test its new products and generate trials in the market to
measure the market response before they formally launch any product. So we can say that
research is an integral part of the company and the new product is brought in keeping in
view the customer preferences and needs.
The spices mixes at Shans production plant are created with the exquisite and genuine
flavors having the cultural and traditional touch. Shan believes in the best as it never
compromises on standards of finest quality and engraves the old age recipes into modern
packaging keeping the freshness intact.
The raw material is an initial and important part of whole product strategy. Shan strongly
holds the belief that excellent quality is majorly dependent on the first-class quality raw
material processed with the help of state of the art technology. For this very reason the
purchase department at Shan Foods thoroughly selects the best quality spices from fields,
local bazaars and international markets. Raw material is also procured from number of
countries such as black pepper is imported from India, Africa, Thailand and various other
countries. Shan Foods pays special attention in obtaining raw material as different spices
are imported from the places where those spices are grown best.
Possible Future Prospects:
Shan is currently in spice mixes and pickles but it can find niche market such as diet
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conscious people and bring in the spices for that market. Shan also can diversify its
product offerings and can enter into jam and ketchup market as national is already
playing in that category.
Brand Development
Management ControlControl is one of the managerial functions like planning, organizing, staffing and
directing. Everything managers do in following-through on decisions taken to achieve
defined goals within an established timetable, is considered management control. It is
important because it helps to check the errors and to take the corrective action so that
deviation from standards are minimized and stated goals of the organization are
achieved in the desired manner. This constitutes three main activities:
Setting standards
Measuring actual performance
Taking corrective measures
An earlier view of control saw this concept in action only after errors were detected, but in
the modern view of management, control is a foreseeing action.
Management control can be defined as a systematic effort by business
management to compare performance to predetermined standards, plans, or
objectives in order to determine whether performance is in line with these standards
and presumably in order to take any remedial action required to see that human
and other corporate resources are being used in the most effective and efficient
way possible in achieving corporate objectives Wikipedia.
SETTING STANDARDS
Management control takes place at a number of levels within an organization namely:
strategic, operational and tactical levels. In effect, control variables at one level cascade tothe next level below and translate in nature and focus accordingly. For example, these
controls may predominantly be financial in nature at the strategic level but translate to
departmental activities at the operational level, and hence encompass both financial and
non-financial information. Further down to the tactical level, they translate into
productivity both for the groups and the individual. Therefore, the focus of this exercise in
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any organization is on finance, performance appraisal and benchmarking.
Marketing activities are inherently more volatile due to the constantly changing business
environment which is driven by the needs and wants of the market. Therefore, for
marketing performance to be measured correctly, the appropriate criterion for marketing
activity needs to be determined, namely: annual plan, profitability, efficiency and strategy.
For Shan Foods, the criteria to measure marketing success should be evaluated from thefollowing factors:
Measurement of awareness (of the product range)
Feedback on customer satisfaction
Market share data both in terms of levels of sales, and repeat business
Annual plan
Measures the extent of marketing success over a period of time. ShanFoods should be
on analyzing:
Sales
Market share
Expenses
Customer perception
Budgeting
The process of developing any kind of strategy and its budgeting are intertwined.
Budgeting process translates marketing strategy into financial terms, and is the single
most common control mechanism. It serves not only to quantify plans but also to
coordinate activities, highlight areas of critical importance and assign individual
responsibilities. Difficulty, time, negotiation, and paperwork: all figure into the budgeting
process. Simply put, it is a tool for resource allocation and acquiring the approval for all
such allocations. Shan Foods managers preparing a budget should look into:
Budgeting guidelines policy and procedure relating to budget formulation. Includes
assumptions, methods, and presentational requirements.
Cost behavior understanding the cost drivers within an area of responsibility and how
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those costs are allocated.
Timescale specific time and manageability considerations set for budgetary periods,
example financial year or a rolling budget, with forecasts over regular intervals.
Objectives specific aims and goals and how they will be assessed.
Though budget types can be historic, zero-based or activity related, it is recommendedthat Shan Foods pursue activity related budgeting for their marketing pursuits since such a
budget would have calculation rules such as percentage of sales, or average industry
spending, and these precursors are used to determine the available funds for marketing.
Profitability
Creates a systematic basis for allocating cost and defining profit both in terms of
products or marketing activities. Ultimately it should help Shan Food s decision making
in terms of:
Expansion
Reduction or elimination of product offerings
Resource allocation through various distribution channels.
Efficiency control
Gains optimum value from the marketing assets. Shan Food managers should look for
value for money by analyzing the impact of promotional activities and setting controls
on:
Sales
Advertising
Directing marketing
Monitoring marketing performance
When deciding on how to monitor marketing performance, reasonable standards
need to be allowed. Shan Foods emphasis should be on monthly monitoring (or
weekly in case of critical situations). The question in mind should be,
What is the time period that allows the most realistic and accurate picture of our
marketing performance?
Which KPIs need to be at the center of attention at the moment?
Is there a need to create new KPIs?
Improving marketing program and their effectiveness
In order to establish a better marketing control system, the biggest obstacle at Shan
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Foods may be the oft-repeated element of resistance. Being a seth company, there
might be a lack of constructive and positive attitude at the top management. The basic
objective of any top management should be to make its sales and marketing people
more effective.
Practicality and clarity should be addressed when implementing changes. This could
be done through a series of thought provoking questions: What specific actions should be taken?
When should the actions be taken?
By whom should the actions be taken?
What could be realistic starting and completion dates?
Who shoulders the responsibility of implementing these corrective actions?
Strategic control
Reviews marketing strategy and its subsequent implementation, in terms of the direction
towards strategic organization goals. This exercise comprehensively examines marketing
activities and assesses their effectiveness and makes recommendations to improve
marketing performance. It is usually conducted in the form of a:
MEASURING ACTUAL PERFORMANCE
Ratios:
A simple and effective technique to measure performance is in terms of ratios.
However these should not be used in isolation but should rather be considered in
relation to trends and comparison with planned or standard ratios. Additionally, it is
important to acknowledge that though these ratios are a quick and effective way to
establish performance, they are mere indicators and hardly identify the source of a
pending problem. It is also important to define the standards and be consistent with
their use when using ratios, for example, profit before or after tax is to be considered
Many businesses operate with lower acceptable ratio; however a ratio that is too high
shows that the organization is not making optimum use of its financial resources by
holding too much cash. Shan Foods can use these ratios to analyze the level of asset
involvement in its marketing efforts.
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Variance analysis:
Used along with budgetary control, Shan Foods would be able to examine the
variation between the actual and planned results and this applicable to a range of
marketing activities. The comparison would be made against budget forecasts, and
the reasons for prevailing differences would be easily identified and examined withinthe areas of concern and their component parts. More specifically, variance analysis
could be applied to sales price and sales volume and the values of variance can point
to either of the two reasons. The management of Shan Foods can thus examine why
revenue targets fell short of the intended volume or intended price. This technique
can further be used to analyze other factors such as profit, cost and market size.
Performance appraisal:
In this form of management control, the focus is on achieving better results from
groups or individuals. Such a framework is based on planned objectives, levels of
achievement and competence. Management is required to have good people skills
and its attitude to be constructive in nature. This would involve them using three
specific managerial skills
Reviewing performance though a normal management activity, Shan Foods
should emphasize the use of objective criteria to be used as the basis of such
reviews. Far too often our industry and business environments use personal
preferences and pre-conceived notions about employees to write performance
reviews. The result is a deteriorating workforce which lacks motivation and hence a
required level of commitment towards company vision, mission and objectives.
The review criteria should be communicated and all work and personal
development plans should be considered in tandem with the communicated criteria.
Giving feedback related to performance in terms of actual results and observed
behavior. It is again important to mention here that Shan Foods does not just focus
on the negatives when giving feedback, since such practices are common in the
Pakistani business environment. It is pertinent to be specific yet descriptive when
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referring to actions, behaviors and judging overall results. More importantly,
suggestions should focus on key aspects of improvements that managers would
like to see in their workforce.
Counseling in order to overcome the observed weaknesses and build on the
noted strengths, performance appraisals should firstly be positive in nature, and
Shan Foods management should be ready to counsel staff so as to build aworkforce that is not only equipped and geared towards achievement but also
motivated and committed enough to go attain the company goals.
THE NEED FOR TAKING CORRECTIVE MEASURES:
If a planned marketing activity is not meeting its intended objectives, it calls for
corrective actions. Since there is a wide range of possible outcomes, it is obviously
prudent to have the corrective actions which are addressing the areas where the
problem exists. Following are a few broad categories where problems may exist, and
the corrective actions that may be taken to address them.
Unsuitable marketing objectives and strategy
Usually the starting point for any organizational activity, it is quite possible to have
incorrect objectives which are the real problem. Not reading the organization
environment correctly may lead to this, and this ends in having objectives that are
too ambitious or unrealistic. Conversely, it is also possible that the resources an
organization holds are insufficient to meet the stated objectives. For example a
sudden reduction in income which was not expected may shrink funding, and it
would become difficult to sustain a planned marketing activity under the new
financial constraints.
Unsuitable marketing tactics
This is where the marketing mix may not be having the required impact on target
market audience. The pricing levels may have been set too high which hindered
participation, or the message being sent out in an advertising campaign may have
been incorrectly perceived. Similarly it is also possible that the wrong audience may
have been targeted at the outset, or that the target audience did not have easy
access to tickets. Another reason could be that the sponsors were not impressed by
the levels of corporate hospitality.
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Insufficient marketing budget
This is something that should be done at the beginning of a planned activity. The
resource availability should be verified and more importantly budgeted, so that
hindrances from cash constraints can be avoided later. The success of marketing
tactics depend on this, and if not handled earlier, the impact of marketing campaignwill not be felt because of the later need to cut corners.
Last but not the least, it is very important to do a gap analysis prior to taking
corrective actions. The discrepancies between planned and actual results must be
pinpointed before any such corrective actions can be implemented.
TAKING CORRECTIVE MEASURES
A corrective action is a change implemented to address the weakness identified in
a management system. Normally corrective actions are instigated in response to:
Customer complaints
Abnormal levels of internal non-conformity
Non-conformities identified during an internal audit
Business organizations do not have unlimited resources at their disposal. Management
control can therefore lead Shan Foods to a more effective and efficient use of its
resources, helping it to channel their efforts towards marketing initiatives and their
achievement. This in turn will help them achieve their financial objectives in a controlled
manner. Shan Foods marketing efforts should not only help management decision
making, but also give support and direction to the day-to-day marketing active
ties, since it is the customer needs and the satisfaction of those needs that at the end of
the day become the judgment criteria for those efforts. Having a structured and rational
approach to conducting marketing initiatives may well be appreciated more within Shan
Foods than taking a piecemeal approach, as it would demonstrate action towards specific
organizational objectives and their marketing solutions.
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Some recommended corrective actions for Shan Foods:
Obtain regular feedback from customers
Continuously increasing customer demands and the constantly competitive work
environment calls for organization
Wide learning as a continuous process rather than mere quality control. Shan
Foods should view its organization as an integrative system responsible forcustomer service and satisfaction. Taking regular feedbacks would therefore help
transform any unsatisfied customers into satisfied ones.
Dedicated call centers
It is important to have synchronization between company objectives, customer
service standards and customer satisfaction levels. Running and maintaining a
dedicated call center (or outsourcing this function to a reputable company), which
gathers current customer perceptions continuously will help compare and align
Shans business service standards with its objectives and the customer attitudes.
Monitoring marketing performance
The question to who should be responsible for monitoring has three possible
alternatives: top management, marketing management, or the combination of the
two. It is recommended that Shan Foods goes for the combination alternative as
this approach allows direct marketing management to take immediate and timely
corrective actions, and concurrently allows top management to have the necessary
visibility but only from a control perspective. Since Shan Foods is known to be a
seth company, this combination approach would suit its operations better than the
other two alternatives.
o Regular marketing audits
conducting periodic, comprehensive, systematic and independent investigation of
Shan Foods marketing activities, with the goal of identifying possible opportunities
as well as potential challenges will help the organization think pro-actively and
evaluate the success of the corrective actions. Marketing audit is one way of
helping organizations do the things they want to do, but moreover do it right the first
time..
Shan Foods does conduct yearly audits, but we feel that increasing the frequency will
improve the marketing function. These audits need to be carefully planned and conducted
so as to ensure that the time and resource expenditures are kept to a minimum.
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Extending use of ERP system
Organizations these days make extensive use of MIS to help them achieve
increased profitability through optimizing their resources. Shan Foods has been
aware to this, and their business savvy is portrayed by the fact that it has been
utilizing a customized ERP system to achieve these very goals. They have runningmodules in:
o Inventory management material resource planning
o Production planning
o Sales
o Accounts
o HR
The use of these modules however is still in the nascent stage and needs to grow into
areas where management control can be brought about effectively. Shan Foods needs
to further explore their current ERP system to employ some of the famous techniques
such as kaizen or activity based costing.
From the perspective of marketing management it can also employs various
organizational controls through this ERP system such as
o Sales forecasting
o Sales force and reseller incentive programs
o Sales force management system
o Customer relationship management
Marketing dashboard
A tool used to simplify marketing reporting and analysis. It continuously tracks
marketing metrics, related information and trends and presents everything on a one
page report. It will help Shan Foods by
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o Staying a step ahead and focused
o Providing a better insight into marketing related problems
o Communicating information to everyone involved
o Saving management valuable time
o Measuring marketing effectiveness
o Making smart decisionso Continuously tracking marketing activities and metrics like
sales per customer, product, region, industry, etc sales from
new products / customers
Profit and margins per customer, product, region, industry, etc.
profit and margins from new products / customers market
share
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Recommendations
Apart from everything one of the growing sectors in food industry is of frozen foods,
though a news field for Shan foods but with the current performance in spices and thequality it maintains, Shan has strong chances of making its marks in the frozen food
category as well which is currently led by K&N. Shan Foods existing distribution and
production facilities can help in this initiative.
Though the new generations are realizing the benefits of open spices to packaged
branded ones, but there still need to be developed effective marketing strategies after
understanding the trends in how people are using spices and for what reasons are they
using them. Convenience, environmental concerns, increasing acceptance of food as
having therapeutic value are some of dimensions organizations need to study and develop
new uses for their spices.
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REFERENCES
PRIMARY SOURCES
Mr. M. Saad Khalidi
Brand Manager
Shan Foods
Email: saad@shanfoods.com saadkhalidi@gmail.com
SECONDARY SOURCES
Ahmed, Rutaba,
Available at: http://jang.com.pk/thenews/may2008-weekly/health-13-05 -
2008/index.html
Foodtech, Industry Overview, Pakistan- Steady Pace for Successful Growth,
Pakistan.
Available at: http://www.foodtechpakistan.com/Indsutry%20Overview.ht m
Shan Foods
Introduction, Company History and Mission Statement[online]
Available at: http://www.shanfood.com
mailto:saadkhalidi@gmail.commailto:saadkhalidi@gmail.comhttp://jang.com.pk/thenews/may2008-weekly/health-13-05http://jang.com.pk/thenews/may2008-weekly/health-13-05-2008/index.htmlhttp://jang.com.pk/thenews/may2008-weekly/health-13-05-2008/index.htmlhttp://www.foodtechpakistan.com/Indsutry%20Overview.htmhttp://www.shanfood.com/http://www.shanfood.com/http://www.foodtechpakistan.com/Indsutry%20Overview.htmhttp://jang.com.pk/thenews/may2008-weekly/health-13-05-2008/index.htmlhttp://jang.com.pk/thenews/may2008-weekly/health-13-05-2008/index.htmlhttp://jang.com.pk/thenews/may2008-weekly/health-13-05mailto:saadkhalidi@gmail.com