Shan Food Marketing Report Multan

7/28/2019 Shan Food Marketing Report Multan

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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

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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: [email protected] [email protected]

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:[email protected]:[email protected]://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:[email protected]

Shan Food Marketing Report Multan

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