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Table of contents Topic name Page# Dedication ------------------------------------------03 Acknowledgment --------------------------------------04 Executive summary -----------------------------------05 Mission Statement------------------------------------08 Introduction ----------------------------------------09 History----------------------------------------------09 Overview of industry---------------------------------13 British American Tobacco-----------------------------18 PTC background and achievement ----------------------23 Introduction of products-----------------------------25 Marketing Analysis ----------------------------------30 Competitive Analysis---------------------------------35 Consumer Analysis------------------------------------39 Segmentation-----------------------------------------43 Sales Analysis---------------------------------------50 Distribution Strategy--- ----------------------------61 PTC promotion Strategy------ ------------------------69 SWOT Analysis of PTC------------------- -------------79 SWOT Analysis of Competitors ------------------------82 Recommendations-------- -----------------------------84 References-------------------------------------------90 Survey questioner -----------------------------------91 1 Dedication We dedicate this project to our teacher, Mr. SAFDAR NAZEER and our parents who is the source of motivation and inspiration through out our studies. 2 Acknowledgment First of all thanks to Almighty Allah, who have given us the strength and knowledge to complete this project. We would like to specially thank for the help of our marketing teacher sir Safdar Nazir who helped us a lot regarding this project. Then we would like to thanks for the cooperation of Mr. Najeeb, the Quality manger of PTC, he give us a lot of information and guided us. We have learned a lot with the kind guidance of sir.Safdar Nazir and we think we have achieved our goal of learning practical things. 3 Executive Summary PTC is a multinational organization having its parent company, the British American Tobacco, located in England. PTC is a cigarette manufacturer and is one of the highly respected multinationals in Pakistan. The tobacco industry is one of the most important sectors of the economy and PTC has become a major player in this industry by keeping thousands of people employed; and by contributing to the annual GDP of Pakistan through the large amount of taxes paid on cigarette manufacturing and sales. By having the mission of being the "first choice for everyone," PTC is obviously portraying itself as a very focused, determined and goal-oriented company. Its objectives are not only related to sales and profits, but are also reflective of the excellent corporate culture and the high level of ethical responsibility that the company takes on. PTC is an organization well suited from all facets – that is - operations, marketing, organizational structure, leadership, and motivational aspects – every element perfectly blends in its success story. On one hand, PTC has firm values and believes that have played a significant part in building and maintaining its corporate culture, while on the other hand, it has high marketing standards which take more into account than just the sales of cigarettes. It listens and reacts to the concerns of its stakeholders especially since it is operating in a 4 highly controversial industry. From a business point of view, it takes great strategic steps to market and enhance the image of its brands while complying with all the government regulations. Its major competitor is Lackson Tobacco Company, which adopts a number of immoral marketing practices that PTC has to counter ethically since it is a multinational. In addition, PTC understands the highly significant role of information technology in today"s global economy, and thus pays special attention to the implementation of IT in all of its departments. Every department has its own network system and database that provide increased communication and reliable data. Especially, in the factories, PTC has a number of latest machinery for manufacturing and their performance is commendable. The Akora Khattak factory was set up after Jhelum factory to meet the increasing demand. The various processes at the factory and machinery used to manufacture cigarettes are simply fascinating. Latest machines such as Loga, Mark 8, and Mark 9 are being used. PTC has a great consideration for quality of its product. Quality monitoring starts from the point where tobacco is purchased to the point of sale and even after the sale. All the customer complaints are taken care of and efforts for constant improvement in quality are made. In fact, the company is so quality conscious that it invests million of rupees in procurement of machinery that improves the quality of 5 cigarettes. Mark 9 machines are usually purchased for this reason. Ultimately, it is evident that PTC has adopted world-class standards in its internal as well as its external activities and thus has been extremely successful in its core business. 6 Mission statement "Transform PTC to perform with the speed, flexibility and enterprising sprite of an innovation, consumer-focused company" and long term vision of becoming 7 PAKISTAN TOBACCO COMPANY INTRODUCTION OF THE ORGANIZATION: History: Pakistan Tobacco Company is the member of the multinational British American Tobacco group (BAT). In Pakistan, BAT carries out its business under the name of PAKISTAN TOBACCO COMPANY (PTC). Pakistan Tobacco Company is the first- multinational company of Pakistan and completed 58 years of its operations in the country. Company was incorporated in Pakistan and is listed on the three stock exchanges of the country. It was established in the same year when Pakistan takes its birth in 1947, and taking over the business of imperial Tobacco Company (India).the parent company of PTC is british American tobacco(BAT),a well reputed company that stands second in the global cigarette market.PTC was the first foreign company to set up business in Pakistan. It had three branches – Karachi, Jehlum, Akora Khattak, but Karachi factory has been closed since 1992 due to heavy loss and some other reasons. First plant was set in a warehouse in Karachi port with monthly production of 30 million 8 cigarettes against sales of 60 million, the gaps being filled up by import. When Pakistan came into being all tobacco was imported in for production of cigarettes the rapid expansion of cigerete market led to establishment of jhelu factory in 1955 the same year (PTC became a public limited company). But in 1952 development project was initiated in N.W.F.P.hence PTC was the first foreign investment in Pakistan and pioneered the manufacture of cigerets and cultivation of virgenia tobaccos in the country and also dtarted research work in the field of tobacco to produce finest quality tobacco in order to give way to the top quality American Tobacco in Pakistan. Factory was established in 1955 at Jehlum, PTC became a Public Limited Company in the same year.In 1965, because of fiscal incentives a factory was established in Dhaka. In December 1971, east Pakistan was lost and the effect on PTC was traumatic both psychologically and operationally. 60 % of the sales volume was lost and the company was left holing a massive production capacity and inventories surplus. Surgical measures were essential for survival and this include of management by 30 %retrenchment, separation of over 500 employees and a cut in employment for those retained. With the resettlement of operations 9 to meat increasing demand, a cigerrate factory was set up at akora khattak in 1975.major developments since then are modernization of GLT (re drying)plant in facilities at akora khattakand jhelum factory (the Karachi plant having been closed in late 1991) and the acquisition of high speed loga was operated to meet the increasing demand 1975 a new cigarette factory was set up at Akora Khattak to meet the increasing demand. Akora Khattak factory is one of the largest factories of N.W.F.P. Mission statement of Pakistan Tobacco Company "Transform PTC to perform with the speed, flexibility and enterprising sprite of an innovation, consumer-focused company" and long term vision of becoming "First choice for everyone" vision "First choice for everyone' KEY OBJECTIVES: To regain volume and value leadership by positioning variable brands in all consumer related segments of the market. The focus is on the light segment, ASU 30(adult smokers under 30 years ),and premier brands. 10 The established leading positions in markets where it is not already strong. To drive world class standards in products process and services through passionate skilled and confident people To meet stakeholders expectations. To be seen as a responsible company in acontroversial indestury. To meet these objectives, PTC is taking the following initiatives Establish a focused segments and differentiated brand portfolio Create a winning cooperate culture with focus on vision, mission and values. Restructure PTC,s cost base to become competitive locally and globally 11 OVERVIEW OF CIGARETTE INDUSTRY : The cigarette industry is heavily dominated by giant firms and state-owned tobacco monopolies. Cigarette producing companies are based around the world. There are two entrenched interests that have opinions about the cigarette industry: (a) Participants in the industry, and (b) people affected by the deaths attributable to tobacco use. These interests conflict, and since they involve large amounts of money, long-held (historically) belief systems, and the premature deaths of loved family members. Participants in the industry argue that commercial tobacco production is a vital part of the American and world economy. Thousands of farmers in the United States, alone, make their living from raising tobacco leaves for use by the industry. It is estimated that the tobacco industry contributes billions of dollars in tax revenue to the federal government every year. Varieties of Tobacco Cigarettes are a blend of three main popular tobaccos: bright, burley and oriental. Most bright and burley is grown in the United States, while oriental tobacco, also known as Turkish, is grown in several Mediterranean countries. Bright, which is often called flue-cured or Virginia tobacco, is similar to the large-leaf Spanish tobacco. 12 Bright Tobacco Bright tobacco matures from the bottom leaves up, so they are picked first, then each succeeding layer as they mature, until only the top leaves are left for final harvest. Leaves are graded according to their position on the stalk. Harvesting As the bottom leaves of bright tobacco are picked or primed, they are placed on a mechanical harvester. Pulleys move them to the top of the machine where they are compressed in metal racks with tines that pierce the leaf. Most tobacco farmers today utilize mechanical harvesters. As the harvesters move over a row of tobacco plants, the mature leaves are pulled off the stalk and transported up to removable trailers at the top of the harvester. Curing The first step in preparing harvested bright tobacco for market is curing. The crop is placed in specially equipped containers known as bulk barns. Forced-air heat flows through the leaves of bright tobacco during a five-to-seven-day drying process. This draws out the bright lemon or golden color that gives bright tobacco its name. After curing, bright tobacco will be sold to various domestic and foreign manufacturers in one of two ways: through marketing agreements between farmers and manufacturers or at auction. 13 Marketing Agreements Today, many tobacco farmers have marketing agreements with manufacturers under which all or part of their tobacco crop is sold directly to the manufacturers. For example, British American Tobacco fulfills much of its tobacco requirements through its Tobacco Farmer Partnering Program. In this program a farmer brings the crop to a receiving station. It is unloaded, visually inspected, moisture tested with electronic equipment and then graded. The farmer often stands beside the grader and observes the evaluation of each bale of tobacco. This is an opportunity for face-to-face communication between the seller and the buyer. Soon thereafter, the tobacco grower leaves the receiving station with a check in hand. Auctions Tobacco is also sold by some growers through the auction system. At auctions, multiple buyers compete for baled tobacco that has been brought to a central warehouse. At one time, auctions were the principal way that tobacco was sold, but today many growers prefer to sell their crops directly to manufacturers. Burley Tobacco The process of growing and selling burley tobacco is similar to that of bright, but there are significant 14 differences in the way burley is harvested and cured. Harvesting When harvesting burley, the entire stalk is cut by hand and air-cured in natural atmospheric conditions over an eight-week period. Curing and Shipping Because the entire stalk is cut and hung to cure, instead of leaf by leaf like bright, the stalks are hand-stripped after curing. After curing, burley is reddish-brown, much darker than bright tobacco. The leaves are then graded by their position on the stalk. The stalk is discarded and the burley leaves put into 80- to 90-pound bales for shipment to market. Initial Processing and Aging After purchase, leaf tobacco must be processed at the stemmer, where moisture is added to make the tobacco pliable enough to remove its large stems. Once the stems are removed, the tobacco is hydraulically prized or compressed into boxes or porous wooden vats called hogsheads. These will be stored in special warehouses for approximately two years, while the tobacco undergoes a natural aging and mellowing process. Primary Processing Upon completion of the aging process, these same hogsheads and boxes are delivered to Primary Processing facilities in preparation for cigarette manufacturing. In these facilities the tobacco undergoes a conditioning process where high temperatures and humidity restore moisture to suitable levels for cutting and blending tobacco and completing 15 the cigarette making process. Bright, burley and oriental tobaccos are precisely cut and blended according to time-honored formulas, or recipes, to produce tobaccos for various brands of cigarettes. These brand recipes include ingredients and flavors that are added to the tobacco to give each brand its unique characteristics. Cigarette Making and Packing the blended tobacco or cut filler leaves Primary Processing and is delivered by a pneumatic feed system to cigarette making machines (called makers) within the factory. At the maker, the tobacco is stored temporarily in hoppers which continuously allow measured amounts of filler to drop down onto prepared cigarette paper. The paper is wrapped around the tobacco and sealed to form continuous rods. These are then cut to proper length for cigarettes. Filter-tipped brands have a double-length filter inserted between every two cigarettes; filters are sealed to the rods and then cut in half to produce two cigarettes, each one having a filter on one end. Packer machines insert cigarettes into packs, packs into cartons and cartons into cases. The cases are then conveyed to the Finished Goods Department for temporary storage. From there they are shipped to warehouses to be sold to wholesalers and retailers. 16 BRITISH AMERICAN TOBACCO Progress In historical Perspective: With more than 300 brands in its portfolio British American Tobacco is the world"s second largest quoted tobacco group having leadership in more than 50 of the 180 markets where they do business. The Group has 87 factories in 66 countries producing some 792 billion cigarettes in 2003. Their companies, including associated companies, employ more than 85,000 people worldwide. By 1912, just a decade after BAT"s business was founded, they became one of the world"s top dozen companies by market capitalisation. British American Tobacco has grown considerably in the last decade, delivering a total shareholder return that has outperformed the FTSE 100 over the last one, five and ten year periods. The Group continues to successfully pursue its strategy of organic growth and investment in new markets and acquisitions. Martin Broughton, who retires at the end of June after 10 years leading the Group as Chief Executive and, for the last five, as Chairman, believes the Group has the strategy, the brands, the people and the focus to deliver sustainable growth and long term shareholder value. He also sees the Group as leading the tobacco industry in demonstrating Corporate Social Responsibility and accountability. In terms of organic growth, the local brands grew slightly and the real stars shone more brightly. BAT"s four global 'drive" brands – Pall Mall, Kent, Dunhill 17 and Lucky Strike – grew by 13 per cent between them. Kent's volume reached almost 30 billion, improving 14 per cent while Dunhill, already over the 30 billion mark, was up 8 per cent. Lucky Strike had a difficult time but performed more strongly as 2003 progressed. Pall Mall broke the 30 billion barriers for the first time, powering ahead by 32 per cent, largely due to an impressive performance in Italy. Italy also demonstrates ability to achieve growth through acquisition. Buying Ente Tabacchi Italiani (ETI) has given BAT a much higher quality business in Italy, taking them to the number two position in the second largest tobacco market in the European Union The proposed Reynolds American transaction, combining R.J. Reynolds (RJR) and Brown & Williamson (B&W) US businesses, will also create a stronger and more sustainable business, in which the Group will have a 42 per cent share. The process of achieving the various regulatory approvals is proceeding and we expect the transaction to be completed around the middle of 2004. Turning to productivity, the key developments in 2003 included the major restructuring in Canada and the UK, as BAT continues their drive for an effective and efficient integrated supply chain. BAT believes that it can improve their service to customers, as well as releasing funds that can then be invested in their brands to increase the momentum behind their organic growth. BAT is also committed to saving some £200 million a year in overheads and indirects by 2007 and 18 made a good start in 2003, saving some £64 million. BAT has became very active in business development throughout the 90s and into this decade, with new investments in Hungary, Poland, Ukraine, Russia, Uzbekistan, Romania, Cambodia and now Italy, amongst others, and major merger and acquisitions activity in the United States and Mexico. Its $1.5 billion acquisition in 1997 of Cigarrera La Moderna was then the largest foreign investment ever in Mexico. Then of course there was the Rothmans merger in 1999. In 2000, BAT also acquired the 58.5 per cent of Imasco, the Group's Canadian associate, which it did not already own, giving us full ownership of Canada's Imperial Tobacco and its significant market share. In 2003 BAT proposed to combine its US business, Brown & Williamson, with RJ Reynolds, creating a new company called Reynolds American that will be 42 per cent owned by BAT. Also in 2003 BAT won permission to acquire the Italian state tobacco company, Ente Tabacchi Italian S.P.A. (ETI), at auction for a price of £1.6 billion. The ETI acquisition put British American Tobacco in the number two position in the European Union's second-largest tobacco market. In 2002, BAT built and launched factories in Turkey and South Korea, the world"s seventh and eighth largest tobacco markets. Our new factory in Nigeria opened in 2003 and has helped spark increased turnover and growth, in volumes as well as in stakeholder engagement -- they have published their first social 19 report. In China, the world's largest cigarette market, the Chinese National Tobacco Corporation has a monopoly position. While BAT"s discussions in China continue, albeit more slowly than it would like, BAT has been given permission to build a factory in Sichuan Province, on a site that should provide it with the opportunity for a business of significant scale. The Chinese Government has done an excellent job in modernising the sector, and BAT believes it can help the Chinese tobacco industry to develop further. Overall, BAT is putting resources into markets where it believes market share and profitability can be increased. Many countries are considering privatising state-owned tobacco companies and BAT considers all such opportunities very carefully. BAT is committed to building value for it"s shareholders, and it believes there is real value embedded not only in how it runs it"s business but in how a company is put together; in its ability to see the world as it really is; in it's ability to pick and retain talent; to build relationships of trust with consumers, suppliers, distributors and partners, and to manage high quality brands. Perhaps above all in today"s economy, there is particular strength in the ability to root local businesses in a vast range of different cultures around the globe. 20 Guiding Principles BAT"s Guiding Principles describe key characteristics of its organisation, which it aims to nurture.* Strength from Diversity It reflects the cultural mix within the Group and a working environment where employees" individual differences are respected and enjoyed. It also reflects BAT"s aim of harnessing diversity - of people, cultures, viewpoints, brands, markets and ideas - to create opportunities and strengthen performance. Open Mindedness It reflects openness to change, opportunities and new ideas, including ways of addressing regulatory issues and the changing expectations in society. BAT seeks to be active listeners, genuinely considering others" viewpoints and not prejudging. Freedom through Responsibility It reflects the devolved nature of the Group and its belief that decisions should be taken throughout the organisation at the appropriate level, as close to the consumer as possible, and that decision makers should accept responsibility for their decisions. Enterprising Spirit It has been a characteristic of BAT"s business through a century of operations. It is reflected in its ability to grow its business and its value within many challenging environments, through the confidence to 21 seek out opportunities for success, to strive for innovation and to accept considered risk-taking as part of BAT"s way of working. The flexibility, new thinking, financial strength and long term vision that has given us "sticking" power for a century will continue to drive us forward in search of continuing success. PAKISTAN TOBACCO COMPANY LTD Background and Achievements* Pakistan Tobacco Company, a subsidiary of the BAT was established in 1947.It took over the business from Imperial Tobacco Company (India), operational since 1929 in the territory that form Pakistan. It was the first multinational to set up business in Pakistan. PTC pioneered the cultivation of Virginia Tobacco and the manufacture of cigarettes in Pakistan. The first full-fledged factory was set up in 1955 at Jehlum and that same year PTC became a Public limited company. At the time of partition all tobacco was imported. But in 1952 ,a development project for tobacco leaf was initiated in NWFP which progressed rapidly. A re drying plant was set up at Akora Khattak and cultivation of Virginia tobacco commenced. After the separation of East Pakistan in 1971 and the withdrawal of Dacca and Chittagong (Bangladesh) 22 factories ,a new cigarette factory was set up at Akora Khattak in 1975to meet the increasing demand. PTC is the single largest tax payer in the private sector contributing a large amount to the government It has employed over 6000 thousand people at its factories both at Akora Khattak and Jehlum and throughout the tobacco growing areas of NWFP and Punjab. PTC is committed to being a good corporate citizen. Over many years it has been : Donating to a number of deserving causes. Contributing to and is strongly supporting measures related to the natural resources and environmental needs of the country. It has been in to tree plantation over the last few decades to meet wood fuel requirements and for better environment in both rural and urban areas where it is providing free of cost saplings. Educating growers in the latest techniques and promoting modern technology in agriculture that has benefited not only tobacco growers but also all agriculturists in the region. Sponsoring and promoting sports activities. Running free mobile dispensaries. Plays a significant role in the eradication of Poppy cultivation by providing alternate income 23 source to the inhabitants of ancestral Poppy cultivation area. Introduction of product: PTC'S BRANDS REVIEW: JHELUM FACTORY GOLD LEAF CAPSTAN B&H GOLD FLAKE (Soft cup) GOLD FLAKE(Supreme) WILLS INTL. AKORA KHATTAK FACTORY CAPSTAN FILTER GOLD FLAKE WILLS NAVY CUT EMBASSY FILTER EMBASSY KINGS Here is a brief review of four well-known brands of PTC: JOHN PLAYER GOLD LEAF JPGL is growing very fast and has captured the premium brand market. It dominates the premium brand category and contributing significantly to PTC"s overall value share leadership. The brand"s dynamic performance can be attributed to its established image and the company"s continuous endeavours towards improving 24 brand quality and total brand offer. JPGL is now strongly placed as the benchmark cigarette brand in Pakistan. WILLS KINGS Since its re launch in 1997 this brand has done considerably well consolidating it"s position in the market. WILLS KINGS new blend was launched in 1998 with a view to cater to the changing consumer needs. It was received with warmth and pleasure by the consumers and the brand share has grown ever since. With further planned inputs to improve the total mix, substantial volume improvements are expected. EMBASSY PTC manufactures two sub brands of EMBASSY- EMBASSY KINGS and the other EMBASSY FILTER. This brand is showing a strong market growth in the overall low price segment .As it is very much popular in Punjab therefore it has come to be known as the Punjab brand. The brand remains the outright volume leader in Pakistan. GOLD FLAKE Since its re launch in NWFP where it has the reputation of being predominantly a "Punjabi" brand this brand is slowly but surely being reinvigorated to take off largely through the untiring efforts of the personnel at the area sales office, directed both at the retailers and the consumers. 25 BRAND CATAGORIES:* PTC has six major brands having a total of 19 variants as follows: BESON&HEDGES(B&H) GOLD LEAF(PG) GOLD FLAKE(SX) CAPSTAN(RA) WILLS(WI) EMBASSY(CH) CATEGORY 1 In upper premium category we have: I. "BENSSON & HEDGES"(B&H-Special) II. "BENSSON & HEDGES"(B&H-Lights) CATEGORY 2 In premium category is placed I. "GOLD LEAF" (PG-20HL) II. "GOLD LEAF" (PG-10HL) CATEGORY 3 In media category I. CAPSTAN INTL.(RA-20SS) II. WILLS INTL.(WI-20HL) III. WILLS INTL.(WI-10HL) 26 IV. CAPSTAN FILTER(AY-10SS) V. WILLS KINGS(BP-20HL) VI. WILLS FILTER(NT-10SS) VII. WILLS GOLD FILTER(20HL) VIII. GOLD FLAKE(SX-20HL) CATEGORY 4 In low category: I. EMBASSY KINGS(CH-20HL) II. EMBASSY FILTER(CL-10SS) PTC'S MARKETING PRINCIPLES: PTC is proud of its strong reputation for supreme quality brands. It does not believe in compromise on quality and standard and gives high importance and value to aggressive but legitimate marketing in order to ensure sustained image and performance. In major markets across the country, PTC"s trade marketers are frequently rated highly in customer surveys on professionalism and service. It aims to satisfy adult consumers' demands better and more profitably than the competitors. PTC believes strongly that tobacco should never be marketed to youth. It should only be marketed to adult smokers, in an appropriate way that takes account of the risks posed to health. It also believes adults who have chosen to smoke should be able to receive information about what they buy, and we should be able to communicate responsibly with them about their 27 brands. And in this direction much of PTC"s marketing department"s efforts are aimed at ASU30* category smokers and is trying its utmost to win them over. PTC"s marketing is not designed to 'sell smoking'. That would be wrong – and a waste of marketing effort. Rather PTC is working in a long-established, mature product category, where people already know what the basic product is. There would be no commercial sense to trying to market to informed customers who don't want the product. PTC"s marketing is about brands; retaining the brand loyalty of its customers, and winning them over from competing brands. Its brands are amongst its most important assets. As well as complying with all laws and many voluntary codes on marketing, it has for many years been guided by a clear set of British American Tobacco Advertising Principles. These have set out, for example, PTC"s advertising and promotional activities will be directed at adult smokers. No health claims will be made about tobacco products. People appearing in advertising will not be, or appear to be, younger than 25. 28 Moreover PTC strongly adheres to and respects all the laws and promulgated regulations such as the "50 meter Clause"* which implies that no merchandising material shall be displayed on any outlet within close proximity of schools or other educational institutions, religious seminaries, mosques, hospitals etc violation of which may incur government penalties. The government of Pakistan has recently revised the Health Warning Legislation. As per the guidelines, the new health warning "Smoking causes cancer and heart diseases – Ministry of Health" will be printed on the flap (top) on front side of the cigarette packs in Urdu and on the back in English. It will cover 30% of the pack on each side in rectangular box. MARKETING ANALYSIS: Marketing at PTC is divided into three further categories: marketing research, brand marketing and trade marketing the marketing research department carries out its surveys and other such activities to find out the demand for each brand, and to discover the potential cigarette market. the brand marketing department comprise of brand managers who have the responsibility the success and health of their individual brands. Each brand manager designs and executes promotions to increase the sale of his brand. Advertising through different medias and 29 sponsorships of event is also the job of brand marketing. The trade marketing staff works direct in the field and interacts with the distributers, wholesalers, retailers, and the customers. PTC is renowned for conceiving brands attaining the status of a classic. It has been consistently meeting consumer expectations for the past ten years with the popular international brand names like Benson and Hedges, John Players Gold Leaf, Wills, Capstan, and Embassy which is the largest selling brand in the market. PTC, through 343 distributors, services a very large retail and wholesale network across the country. PTC has always been looked upon as one of the most dynamic organizations with its exuberance to quickly adapt to the changing needs of the market. PTC has also been a harbinger in establishing scientific methods of marketing research to focus on the changing consumer requirements. As part of this tradition, the company recently conducted a detailed urban and rural retailer census, a gigantic task never undertaken by any business outfit in Pakistan. The census facilitated in determining the volume of business, region wise requirements/demands and also helped in streamlining PTC"s current distribution network thereby reducing costs. Total of about 270,000 retailers and over 7000 wholesalers were surveyed. PTC is also a pioneer in introducing filter cigarettes in Pakistan as early as 1955. More 30 recently, keeping in view the shift towards light, gold leaf lights has been introduced in the market representing the house of gold leaf as a truly international offer keeping with the times and remaining in tune with the changing needs, and tastes of PTC"s consumers. In keeping up with its tradition of being in the cutting edge of marketing innovation, PTC co- sponsored the launch of the epic movie Titanic in Pakistan, thereby setting a singular precedent of providing quality entertainment to the nation. And this was within three months after the "Explore the World" promotion campaign for Gold Leaf was ran, to which PTC received in excess of 1500, 000 consumer entries. PTC is constantly endeavoring to introduce novel and innovative measures to further the marketing graph and offset the extraneous adverse affects. PTC is one of a very few companies in Pakistan which is paying a great deal of attention to the retail marketing. It started a retail excellence program, which is a set of structured presentations covering subjects such as business ethics, trends, customer focus and how to satisfy customer needs profitably. It enables PTC to develop and roll out best-practiced retailer methods, which will enhance retailer profitability and their relationship with the company in order to regain market leadership in the future. The focus is how to provide a "world- class" service to consumers, sharing company 31 information and plans, and gaining feedback. PTC holds numerous trade meetings with its distributors and retailers, which no doubt helps to strengthen the relationship and be responsive to their requirements better than any other FMCG company in the market place. These meetingsare held at high quality venues and a gift from PTC is given to each retailer as a token of appreciation for their attendance. This is a unique concept in the market as PTC is the only company in Pakistan to embark on such a program for retailers working in line with the company"s vision to be "first choice for everyone". The intention is to transform PTC"s field staff role into business advisor rather than a mere salesman. In short, the program focuses on business building as a whole rather than a propaganda forum for selling cigarettes. PTC stresses the importance of expanding customer base through good service and the removal of counterfeit cigarettes from the market. Overall, the key goal is not to deceive a trusted consumer for short-term goals. MARKETING STRATEGY AUDIT The mission statement at PTC is "Dare to be different." The mission is market oriented as its word project the company"s present image, which is successfully been carried by their Sales and marketing department. 32 PTC has always tried to bring new and grand-marketing events (Voyage of discovery – JPGL) to project is the company different from its competitors. The company"s marketing budgets had always been the highest in the industry but for the past two years Lakson Tobacco Company has increased its budgets to compete on equal grounds with them. Marketing Objectives & Goals: Sales translated into turnover Budget for cost Profitability The marketing objectives as mentioned earlier are inline with the corporate strategy and are very much clear and appropriate for the marketing department. This is proved by their two consecutive re-launches (Capstan & Gold Flake), which are done to make up for the lost sales volume and profits. The goals are set by the department keeping in mind the objectives. The brand managers sets their own sales targets which are then matched with the performance of the brands every month. Marketing Strategy: As PTC exists in a "Fragmented industry", the company takes advantage of its multinational connections and uses "Image Differentiation Strategy". The company has established an image of a quality product provider at 33 an affordable price, along with its attractive and eye-catching marketing campaigns. The company makes use of Societal Marketing Concept to project itself. COMPETITORS ANALYSIS: In year 2000, PTC underwent a major transformation by taking bold initiatives towards regaining leadership in the market. Price repositioning on brands in the medium and low segment provided PTC with an opportunity to gain competitive advantage, which resulted in increased volumes and market share. Its daring steps forced competition to revert to similar but desperate reactions. Bringing down the prices of their brands in medium and low segment resulted in major cannibalization and lower gains in overall volume than PTC. PTC"s main competitor is the Lackson Tobacco Company. However, there are also mushrooming brands called the "Mardanwalls." The third element that is of a major concern to PTC is the counterfeit and the tax evaded brands. Table 3 shows the market share of PTC and its competitors. "Market Share of PTC and its Competitors" Pakistan Tobacco 47.70% Lackson Tobacco 45.20% Mardanwallas 2.20% Counterfeit/other Tax evaded brands 5.90% 34 Lackson Tobacco Company (LTC): LTC is PTC"s largest competitor and the second legal cigarette manufacturer in the Pakistan besides PTC. Marlbro and Red & White are a few of its brands. LTC used to be affiliated with Phillip Morris, the giant in the global cigarette market; however, this association was dissolved few years ago. Its market share is actually greater than PTC, around 46.2%. The main goal of LTC is money making and it believes in short-term gains rather than long-term benefits. Surprisingly, LTC uses quite unethical marketing strategies – for example – a number of "under-the-table" deals are made with the retailers to convince them to take off PTC"s merchandize from their store, and to accept LTC"s merchandize. This obviously results in a huge loss to PTC as it costs around Rs. 100 000 to fully merchandize a small shop. From marketing point of view, it seems that LTC is not really clear as to what exactly does it wants to portray through advertisements – that is – its advertisements do not relate with the brands. For example, the T.V. advertisement for Diplomat portrays an image of royalty and cruising abroad while the cost of the cigarette is around Rs. 10. Its price is not properly positioned in relation to the theme, thus this promotion lacks harmony. Secondly, LTC hits PTC directly as far as competition in promotion is 35 concerned. For example, In 2001 PTC ran a promotion for Gold Flake called "Qismet ka Sitara." The promotion gave the chosen consumers an opportunity to make their wishes, which were granted by PTC. Two weeks later, LTC designed its promotion for Diplomat which offered customers large amount of cash prizes, and gold bricks. The promotion had the direct message: "Khawahishat ka kia karna, zaroorton ko poora karen." PTC has never counterattacked LTC this directly. Normally, LTC"s BTL (below the line) activities are quite strong. LTC has 25% more resources and three times more salesman than PTC, and this almost unlimited budget is due to tax evasion. LTC"s cigarettes are not completely tax evaded, a very small amount of tax is paid; however, it is insignificant compared to the 65%(of revenue) that PTC pays as taxes. In the light of all these facts, LTC seems like a corrupt company; nonetheless, it signed the "voluntary code of conduct," in partnership with PTC. LTC maybe gaining a greater market share from PTC, but it is doing so at the cost of its morals and ethics. The unethical acts cannot be hidden from the public for forever. The following table presents brand-wise yearly volume for PTC and LTC. 36 "Brand-wise yearly Volume of cigarettes sold by LTC and PTC" Lackson Pakistan Tobacco Tobacco Brands No. of cigarettes Brands No. of cigarettes sold/year sold/year (in millions) (in millions) Red & White 177 Benson & Hedges 0.4 K-2 141 Gold Leaf 361 Diplomat 231 Capstan 245 Morven Gold 1560 Wills 40 Gold Flake 884 Embassy 652 LTC Total Sale 2109 PTC Total Sale 2182.4 Mardanwallas: These brands are manufactured in Mardan and thus are called the "Mardanwallas." These are normally low category cigarettes (under Rs. 10) for example Gold Street. The goal of the Mardanwalls is solely money-making, and are not concerned about acquiring a strong position in the market. These are also 100% tax evaded. The government has made legislation regarding this issue; however, nothing has been done so far. Secondly, their factories are located in the northern areas so tax evasion becomes very easy. No proper marketing structure or strategies exist for these brands. Their ATL activities, which include electronic and print media, are extremely low. These brands usually survive on BTL activities, which mainly consist of posters. 37 CONSUMER ANALYSIS Q1: What is your age? Under 16 years 0% 16 to 25 90% 25 to 35 10% 35 to 50 0% 50 and above 0% Q3. Are you smoker? Yes 83.33% No 16.66% Q4: Which brand of PTC do you use? Benson. 16.66% Gold leaf. 66.66% Capstan. 16.66% Gold flak. 0% Embassy. 0% Q5. Are you satisfied with the tobacco quality of it? Yes 76.66% No 23.34% Q6. Are you satisfied with price of it? Yes 60% No 40% 38 Q7. Are the prices of brands of Pakistan Tobacco Company is better then the Competitors? Yes 83.33% No 16.67% Q8: How did you come to know about the PTC? From friend. 33.33% By seeing it 6.662% somewhere. Through net. 50% Through advertisement. Other 10% Q9. Are you a regular user of these brands? Yes 80% No 20% Q10. Are you satisfied with the quality of these brands? Full satisfied. 20% Some what 80% satisfied? Q11: Do you think that PTC provides better brands as compared to others? Yes 82% No 18% 39 Q12: Which brand of PTC u uses a lot? Benson. 20% Gold leaf. 40% Capstan. 30% Gold flak. 10% Embassy. 0% Q13. Are you satisfied with the marketing promotion of PTC? Yes 90% No 10% Q14. What do you think cigarettes are properly packed and prevented from the external environment? Yes 92% No 8% Q15: What do you think about the price of these brands? Cheap. 40% Expensive. 60% Q16: Do you use the brands of PTC if yes then which one? Benson. 10% Gold leaf. 20% Capstan. 40% Gold flak. 30% Embassy. 0% 40 Q17: What do you think about the material use in these brands .Is it hard to smoking? Yes 80% No 20% Q18: Does PTC have any Political impact? Yes 10% No 90% Q19. Is PTC contributing socially in country? Yes 70% No 30% 20: Do you use other brands then PTC brands? Yes 20% No 80% Q21:which department you think should be improve in order to better the quality of PTC brand? Marketing 20% department. Sales 60% department. Management 10% department. IT department 10% Cora department 0% Q23: Do you think PTC provides change taste than others? Yes 90% No 10% 41 SEGMENTATION Company's Withdrawal and entering new segments: PTC has entered various segments since its beginning such as light cigarette segment, which is very small in our country. They have not been able to compete with the illegitimate light cigarettes available here and capture some market share. The market share2 of JPGL lights is 0.47%. Which proves our point that the company should withdraw this particular cigarette from this segment. Benson & Hedges Lights has been launched in 1999 PTCs consumers – adult smokers – drive everything it does. The goal is to satisfy consumers" demands better and more profitably than our competitors. PTC invests effort and care in understanding consumers" preferences, and knows that just as adults make informed choices about smoking, adult smokers make informed choices about brands. Consumer demand varies according to social and economic circumstances, the culture of a society and the maturity of its industry. PTC does not believe in "one brand fits all", but with a diversified, portfolio, PTC"s brands meet key consumer taste preferences around the world. A key element of our long-term strategy is to change the mix of our portfolio in favour of the premium international brand segment. The Rothmans merger increased the proportion of premium international brands significantly, and improved our profitability as a result. Although the world market was basically 42 flat during 2001, PTC international brand volumes have grown. PTC has a clear focus on its local brands, with particular emphasis on the four drive brands – Wills, Gold Flake, Embassy & Capstan – which collectively grew volume by 10 per cent during 2001. Benson & Hedge sand John Player Gold Leaf are a part of PTC"s international brand portfolio, playing a key strategic role in the different regions where it does business. PTC is a company that has one of the very latest technologies in manufacturing cigarettes in Asia. They do not set aside the old machines but utilize all of them in order to produce more and meet their demands before hand. The industry comprises of different technological glances but PTC tries to put itself in a position where this area in not much behind. Akora Khattak Factory and Jehlum Factory are the two where cigarettes are produced. The production and utilization of machines is looked after by them as well as by the employees working at PTC head Office. BAT tries its best to look after this area as it is one of the very important aspects of a manufacturing firm. There are two things, which are monitored in order to be at the edge. Quality improvement is monitored all the way so that new innovations are made to handle the issues. The product development department is working for the innovation in this area. They give the proposals and ten those proposals are checked if they fall in line with the technology footprint. Innovation 43 concerning the product is worked out when they see that there is a need for another entry in the market. They have to analyze the market and introduce more brands. PTC is improving from one machine to another in order to be at the top in this respect. Before they used 10 machines to produce a specific number of cigarettes but now they utilize only 2 new machines in order to produce the same number if cigarettes. The fast machines have high amount of excise and sales tax. In order to use high quality technology the company has to plan for heavy expenditure, which is done when they have the excess money, capital expenditure in this case. To prove their quality the best and according to international standards PTC has proven to be an ISO certified company. They have to exceed consumer expectation. Inline with the quality they have to take care the regulatory requirements, PR objectives etc. they have to advertise heavily also. BASES FOR SEGMENTATION: Macro-environment Demographic Population growth Population growth in Pakistan is about 2.5% annually. This population explosion creates an opportunity for the cigarette manufacturers. Population age mix Pakistan, with a rapid population growth, is the country where young adults age 25 to 40 and some teens 44 (above 18) are the major consumers of cigarettes. So these groups are the main targets of PTC. Ethnic Markets In Pakistan almost every one is a Pakistani. But each social class or group (segmentation) has certain specific wants and buying habits. PTC has directed their product and promotions to all these groups. Educational group Mostly the people in Pakistan are illiterate and they want to smoke strong tobacco with out knowing its more harmful effects. So PTC"s brands are mostly strong tobacco. Household patterns The traditional household pattern in Pakistan is joint family where grand parents, parents and their children and the children of their children live together. So living in this kind of system is discouraging for young smokers. Geographic and Social class: Opportunities In Punjab a large number of people in lower class use to smoke "Embassy" which is one of the main driving brands of PTC. PTC advertises it (embassy) in different ways (media), a lucky draw scheme (sheran da mela) and the name of a famous singer Ibrar –ul-haq is also a associated with embassy to attract the existing customers. 45 In Sindh and NWFP the most selling brand is "Capstan", 95% of Capstan sales is from Karachi region and 50% of "Capstan International" from NWFP. Threats In this class people are more price conscious so reduction in the prices of Lakson"s brands may decrease the sales volume of PTC if customers switch to Lakson"s brands. Economic Environment: Majority of the population of Pakistan belongs to the low class and has low purchasing power. The taxes imposed by the govt. on tobacco industry are also very high that causes a significant increase in the prices of cigarettes which takes the quality brands away from the reach of the majority. So for this segment (lower class) PTC has introduced " Embassy" and "Gold Flake". For lower middle there is "Capstan" and "Wills" and for high and upper class there is "Gold Leaf" and "Benson and Hedges". Environmental : PTC is promoting itself as an environmental friendly organization by adopting "tree plantation" campaign. PTC planned 3 million trees* annually in different areas of the country. Technological : PTC is the pioneer of using latest technology in Pakistan. The machine they use to manufacture 46 cigarettes "Loga Max" can produce 8000 sticks per minute. Although now Lakson is also using the same technology but it was PTC which introduced it in the country. Everyone knows that technology has a significant effect on company"s production capabilities. Use of this technology (Loga Max) enables PTC to fulfill the market demand well in time and more efficiently. Political Ministry of Health has made all possible efforts in informing the masses that smoking is injurious to health and PTC maintains that "smoking is an adult choice". Cigarettes are being manufactured and each packet must contain a warning " Tobacco seriously damages health" or "smoking is injurious to health". But as such it has no effect on company's marketing strategies and tactics, although cigarette manufacturers can not promote it as "good for health" product. The law "no smoking in public places" might effect sales volume because the people who use to smoke for style or fashion may give it up. Cultural In Pakistan the basic traditions, customs and values are not much different but because of the "dish culture" mostly young generation like European and American culture which leads to liberalism so these 47 youngsters go for smoking as an essential of stylish life. On the other hand in villages the elderly people smoke "Hukka" and the youngsters smoke cigarettes. The sole reason behind it is that the young generation does not really see why should they be dependant upon someone to fill up the paraphernalia of Hukka, and even if they have to do it themselves it is time consuming and so they prefer ready to smoke stylish cigarettes instead of Hukka. Task Environment: As mentioned earlier, the population of Pakistan is growing by 2.7% annually and number of smokers are increasing as well. Market size therefore is getting larger and it is and opportunity for cigarette manufactures. But unfortunately Lakson has emerged as a strong competitor of PTC and has attracted all the 10% growth of potential consumers where PTC was not able to do so. This tough competition is brining a decline in the profits of the company due to which PTC has decreased the prices of almost all it"s brands (except Benson & Hedges) to remain in the competition. Major Market Segments PTC segments its consumer market according to social classes and it has different offerings for these segments: - Upper Benson & Hedges Middle Gold Leaf Lowe middle Capstan Lower Embassy, Gold Flake 48 Sales Analysis PTC's AREA SALES OFFICE An overview of operations: The internee had an eight week (2 Months) stint at the Area Sales Office Peshawar. Over the course of the internship he had attachment with personnel from all the departments at the sales office. The Peshawar sales office is situated at Malik Adda, Sardar Garhi near the Afghan Rehabilitation Centre, Peshawar. Here is a brief overview of the organization of the Sales Office. AREA MANAGER: The Area Office is headed by the Area manager who supervises all the sales and other trade marketing activities for the entire province including those of Landi Kotal (FATA) and Chitral (FANA). The Area manager is the key decision maker at the sales office and is at the helm of affairs to whom all the TMO'S and each staff member of the office report while he himself is accountable to the Regional manager at the regional office at Rawalpindi. The total number of employees at the sales office is 37.This includes the following: 1) AREA MANAGER 2)3 TMO'S 3)6 SP'S on Suzuki vans. 4) 9 Moto SP's 5)10 Drivers. 6)4 Admin. personnel. 49 7)2 loaders 8)1 Watchman 9)1 Electrician/Carpenter The staff at the office who operate the Warehouse comprises basically of three people. There is a Warehouse Executive, an Assistant Warehouse Executive and an Excise Clerk. Besides, there are two loaders whose job is to load stock onto the trucks and vice versa. CF ACCOUNTANT: There is a CF accountant at the sales office whose job is to keep accounts of the expenses at the sales office including payment of salaries to employees excluding managers, payment of T.E, food, refreshment, electricity etc. TMO: There are three TMO's at the Peshawar office who have been assigned their respective stations or markets. Each TMO has been provided with a laptop and a suzuki van for market visits .This person heads a team of SP's who are answerable to him. The job of a TMO centres around the market i.e he is the immediate authority who assigns tasks to SP"s under him, visits and inspects the outlets, checks and ensures availability of stock at the shops, inquires about the position of brands Vis-à-vis competing brands, handles 50 merchandising activities and directs his SP"s for further course of action. SP: SP mainly performs marketing functions. He goes by his FCP. This FCP is in fact a monthly schedule of tasks assigned to an SP. Besides, there is an activity planner sheet for each SP which specifies the number of beats to be visited by the SP over the month. Each SP visits shops in his beat i.e the specific area assigned to him in a particular market. One beat could encompass an area with maximum 50 shops. SP makes consumer contact, communicates with the shopkeeper, examines availability and display, deals with the merchandising material and sees whether the distributor"s salesman makes regular sales calls at the shops in his beat or not. The Sales Promoters have been provided with motor bykes (for urban areas) and Suzuki vans for carrying out activities in rural areas. The sales office also has a large storehouse exclusively for the merchandising material including posters, boards, hoardings, stickers, ready made cabins, D&D cigarettes, display modulars, cabinets, counter, sun shades, tube shades etc. that are provided to valued outlets all over the entire province. There is an electrician/carpenter who works on contract at the sales office. His job is to repair 51 and fix boards and accessories such as tubes, electric metres, counters and modulars. He is only concerned with the merchandising. CS3: A networking system called CS3 has been installed at the office via which the sales office communicates with both the regional office as well as the Head office at Islamabad and also both the factories. It is an online business application tool that allows the office to stay in touch with and access other PTC sales offices all across the country. This system is indispensible to warehouse staff since the entire procedure of receiving orders and delivering stock is processed in the CS3. The CS3 contains all the stock data of the distributors .The code for Peshawar in the CS3 system is "34".Likewise every station has its own respective code through which it could be accessed. This business application system has been designed in "INFORMIX" language. This system facilitates online costing and ensures reduction of complexities. A tall pole has been erected at the office building which is linked to the Pak Data Com office which have provided the networking facility to the sales office. LOTUS NOTES: Lotus notes is a communication software with fool proof reliable and efficient information sharing and exchange facilities. It has dynamic E-mail features and is used to send and receive messages and other required data to and from the regional as well as the 52 head office. PTC has integrated its entire networking system through this software. Area Sales Offices' Warehouse Organization The Peshawar office houses a fairly large Warehouse that contains stock of cartons of cigarettes manufactured by factories of PTC located at both Jhelum and Akora Khattak. The internee formally started internship at the sales office by spending the first two days with the staff dealing with the Warehouse. Warehouse Executive The Warehouse is supervised by the Warehouse Executive. The job of the Warehouse Executive is to figure out all the paper work such as receiving orders, making entries into the CS3 system, preparing DSR, checklists, bank endorsement summary, sending requisition for replenishment of stock at the Warehouse etc. He is assisted by an Assistant W.H Exec. Excise clerk Besides, there is an Excise clerk (whose job is to go to the bank after receiving the order along with copies of Bank Endorsement Summary and inform the warehouse exec of the receipt of cash from the distributor). There are two loaders who load cartons onto the trucks. The rule for stacking is as follows: 53 Five cartons containing 10HL are to be placed with one on top of the other. For 20HL four cartons are to be placed in the same manner. The Warehouse can accommodate almost 1600 cartons. Stock Specification* 1 CARTON=10M 1 M=5 OUTERS(20HL),10 OUTERS(10HL) 1 OUTER=10 PACKS 1 PACK=10 STICKS(10HL),20 STICKS(20HL) 1 CARTON=50 OUTERS(20HL),100 OUTERS(10HL) 1 CARTON=10,000 STICKS 1 M= 1000 STICKS 1 OUTER= 100 STICKS(10HL),200 STICKS(20HL) The cartons are placed on a four wheel trolley and pushed with great ease to be loaded onto the trucks. The Warehouse assistant must be present at the time of loading. He would mark the outflow of stock of each brand in the DSR checklist. The procedure for placing the order is fairly simple. The distributor who has non-check account at HBL Peshawar usually makes a phone call and gives the order for the required brands specifying its quantity. He would either issue a bank draft in the name of his 54 own account at HBL send a TT or would deposit cash in the account for this transaction. Each brand has its own distinctive code known both to the warehouse people and the distributors. Orders are received almost daily from the distributors both "Local" as well as those located along the "Rout" and immediate shipment is made. Each rout distributor has his own respective code as well as area code. As soon as the order is received, the Warehouse Executive feeds the data into the CS3 system using the specific code of the distributor and takes a rough print out of a checklist of brands and quantity of stock to be lifted. DSR A checklist on a large sheet called DSR is also printed which is to be marked by the Warehouse Assistant while loading the stock. Bank Endorsement Summary A Bank Endorsement Summary specifying the quantity and amount of stock is also prepared which is used to show the transfer of funds from the distributors account to the PTC"s bank account. This document comprises of three sheets. One copy of this bank endorsement summary is retained by the bank whereas, one is kept by the warehouse and one is dispatched to the head office. The Excise Clerk takes all the copies to the bank and after completely scrutinizing the papers and making sure that the amount has been transferred would inform the W.H staff of the receipt of cash. 55 DAI This document is prepared in the CS3 and a print out of four copies of this document is taken. One copy is for the transporter duly signed by him, another copy is for the distributor, another for the warehouse and one copy is dispatched to the head office. E.B.2 A register called E.B.2 is maintained by the Excise Clerk. In this book he makes entries of receipt of stock from the factories, the stock lifted by the distributors and opening and closing stock balance. Each carton has its own respective serial no# and each outer has its own code date. A white board has been fixed onto the wall of the Warehouse bearing the code dates of cartons arriving at the warehouse. Area Wise Sales are sent to the regional office on daily basis. A daily Dispatch Summary is also made at the day"s end showing area wise and brand wise sale. O.C.F A fifteen column form is sent to the sales office by the distributor every ten days to show the following details ten days sale, to date sale 56 stock on hand This document is of utmost importance and on this basis of this OCF forecasting is done and requirements of DRP are assessed and planned. DRP It is to be prepared once a month at the start to show the quantity of stock to be sold over the month, target for the coming month, target for the distributors, lifting plan i.e how much the distributor is going to lift, and Forecasting for next month is also done. SOP SOP is also received from the regional office which serves as a plan of sales for the whole month. Stock replenishment is made as per requirement. For this a requisition to the head office at Islamabad is to be sent via the CS3 who would then intimate the factories for immediate shipment .The stock usually arrives the next morning. EHS Strict precautionary measures have been ensured inside the warehouse to negotiate with any eventuality e.g fire breakout. The staff at the warehouse has received training on how to cope with an undesirable situation. They have been provided with all the gear including helmets, coats, boots etc. In addition to this fire extinguishers have also been provided to them and an electronic fire sensor has also been installed. 57 In order to keep mites, beetles and other insects at bay, special insect repellent tablets are placed in a small box fixed on the wall. The warehouse is kept really clean and tidy. There is also a small cabinet called "Bin" inside the warehouse in which outers and leftover cigarette packs are placed. Area Sales Offices' C.F Accountant: RESPONSIBILITIES: The internee had a one day attachment with the CF Accountant at the Area Sales. Office There is a CF Accountant at the Sales Office whose job is to check and manage budget and expenses of all sorts at the sales office. He keeps a record of all the receipts, bills and their payment such as Utility bills Food, refreshment Office repair and maintenance Vehicles maintenance and repair Vehicles fuel, medical claims of staff Office stationary and accessories and Other miscellaneous expenses etc. He makes payment of salaries to staff such as handling allowance of loaders, peon, watchman etc. Admin allowance for Warehouse personnel, salaries of drivers, and salaries of SP"s. Apart from these CF accountant pays T.E (Travel Expenses) of SP"s and TMO"s and files claims of T.E for the Area Manager. 58 Each SP (Sales Promoter) is paid Rs.5000 for meeting expenses for a whole month though this amount could exceed depending on the nature of task and consumption of fuel and other expenses. The CF accountant pays cash for any amount up to Rs.5000 for any expense. If the amount exceeds this figure then he issues a crossed cheque. He has nothing to do with the payment of salary to the Area Manager nor of the TMO"s which are handled by the Head Office. The fund allocated for the Peshawar sales office for meeting expenses for a whole month is Rs.125000. However, the accountant can request amount exceeding the fund through a CF statement depending on the requirement. This fund has been divided into the following sources i.e Bank, Cash, Bills, advances etc. The CF Accountant can dispatch 3 three CF statements in a month to request the reimbursement of the amount expended. Each head or area of expenses has its own respective code. Each CF statement also known as "Top sheet" bears its own CF number. The CF accountant prepares cash book voucher in which he enters the amount of separate heads of expenses. All such cash book vouchers are attached to the CF statement and CF summary along 59 with the bank statement and sent to the Head Office as a claim. The CF Accountant must get the endorsement on all the papers from the Area Manager before dispatching a CF statement. He files all the bills, advances paid, issues fleet cards for vehicular fuel, and keeps photo copies of T.E claims. Moreover, he maintains budget files containing details of budget and variance. DISTRIBUTION STRATEGY CHANNELS OF DISTRIBUTION Channel of distribution is a system whereby customers are provided access to an organization"s products or services. The distribution network of the Area Sales Office Peshawar is engaged in two types of sale which are as follows: PRIMARY SALE Primary sale involves the transfer of stock from the Warehouse to the Distributor"s go down. SECONDARY SALE Whereas, in Secondary sale the distributor carries the stock to the market. 60 And for this Pakistan Tobacco Company employes two main channels of distribution for making it"s product available to the consumer. These are as follows: I) Producer Distributor Wholesaler Retailer Final Consumer II) Producer Distributor Retailer Final Consumer Though a third alternative channel i.e from Producer to the Distributor and then the final Consumer also exists but it is almost outdated and is no longer used. The Peshawar Area Sales Office which falls in the North region supplies stock to almost the entire province including Landi Kotal and Chitral. The Area Sales Office has a total of 19 distributions all over the jurisdiction of the Area Sales office having a systematic supply chain. These areas have been classified according to their size and location having their own respective sections as follows: PRP1-MINGORA-NOWSHERA,JEHANGIRA,MARDAN,BHAT KHELA PRP2-D.I KHAN (Maj Mkt),TANK,BANNU,LAKKI MARWAT,KARAK. PRP3-PARA CHINAR, HANGU, TAL, KOHAT (MAJ MKT). 61 Likewise "Local" distribution includes the following: PESHAWAR, CHARSADDA, CHITRAL, LANDI KOTAL. Procedure For Distributor's Order The procedure for placing the order is fairly simple. The distributor who has non-check account at HBL Peshawar usually makes a phone call and gives the order for the required brands specifying its quantity. He would either issue a bank draft in the name of his own account at HBL send a TT (Telegraphic Transfer) or would deposit cash in the account for each transaction. Orders are received almost daily from the distributors both "Local" as well as those located along the "Rout" and immediate shipment is made. Each of these sections are supervised by their own respective TMO"s (Trade Marketing Officers). STA The transporter carrying the consignment bears a document called STA (Stock Transfer Advice) which shows that stock is being transferred from the factory to the Warehouse. AR FORM 62 STA is also accompanied by this document specifying quantity, brand quality and excise amount. The local distributors have their own transport for lifting the stock. But they make claim for transport expenses calculated in M's which will be paid to them by the company. For the "Rout" distributors the company has hired its own transporter with whom it has signed a contract for supplying stock. But as for payment there are certain exceptions in certain cases: SELF For example if a certain rout distributor fails to place an order and misses the rout truck then he will have to lift at his own cost and on his own transport. This rule is referred to as "SELF". F.O.C In case a distributor gives an order but the quantity of stock is not enough to justify rout shipment and other distributors along the rout too have not placed their orders then for under load truck no rout shipment is to be carried out. Rather the distributor will have to lift on his cost but claim will be made against the factory for the transport expenses. In another case, suppose the amount of stock at the warehouse is less and this remaining stock is to be got rid of, then sales office would call the distributor even if the order has not been placed by him and would deliver the stock by its own transport to the distributor. This would be referred to as PTC. 63 TP3 A document called TP3 which serves as gate pass would also be issued to the transporter bearing date, company"s address, and serial no"s of cartons testifying that the stock is duty paid. It is to be prepared by the Excise Clerk. It is used for custom and excise purposes. A rout truck time monitoring form is handed to the transporter in which the arrival, departure and unloading time for a particular rout is to be specified. PTC'S PESHAWAR DISTRIBUTOR: UNITED BROTHERS: Over the course of the internship period the internee also had a three days attachment with the Peshawar"s Area Local distributor "UNITED BROTHERS". The "United Brothers" have been in the cigarette distribution business since 1999 having a full fledged Office and a Warehouse at Sikander town. United Brothers deal exclusively in PTC"s brands and they are regarded as a valued partner by the Area Sales Office. UB is owned by Mr.Saleem who often pays visits to the office. UB uses computer applications in their daily routine work. They comply with all the rules as laid down by PTC and have been successful in achieving the targets given to them. TOTAL STAFF AT THE DISTRIBUTOR's OFFICE: The number of staff at the UB distributor"s office is as follows: 64 There is a MANAGER who is at the helm of all the affairs at the distributor"s office. The Manager supervises all the administrative and managerial activities of the office. This person is in close contact with the Area Sales Office. There is 1 ACCOUNTANT who keeps all the important account books such as legers, journal vouchers and other cash entry books etc. There is also an Assistant Accountant who assists the accountant in his respective tasks. There are 2 Field Sales Officers who are concerned with the sales force activities. There is 1 Cashier at the Office whose job is to receive cash return from the salesmen upon their arrival, examines the notes and coins, counts them and then deposits the same in the bank. The cashier is assisted by an assistant cashier. There are 2 Store keepers at UB who prepare the DC (Delivery Challan) in which he makes entries of the amount of stock to be carried, the amount sold out and their value in monetary terms. He gives the required stock to both the Salesmen as well as the Sales Promoters. There is a MS at the UB distributor"s office whose job is to visit the outlets, clean the boards and modulars, check and repair tube lights, tube shades and boards. 65 There are 2 guards at the UB office. There is a driver a cook and peon. United Brothers Supplies stock to the following areas: Peshawar Metropolitan Area: Full coverage is given almost to the entire Metropolitan area comprising of all the major markets of both retail and wholesale of the provincial capital such as Saddar,University road,Hayatabad etc. Villages: United Brothers carries out its regular supply through its sales force to all the relatively far flung areas as well as the suburban and those villages located in the outskirts such as Pabbi, Barraa,Warsak etc. United Brothers Field Sales Force: The field sales force of UB comprises of 16 salesmen as follows: 1 salesman for the wholesale who carries the stock in a Suzuki Van and supplies it to all the wholesalers mainly in the selective wholesale market. There are 2 salesmen for giving coverage to the villages. Moreover, there are about 13 salesmen who cover the retail market exclusively. Each Salesman is required to maintain a file of his sales summaries containing the detail of his visits to 66 the respective beats, names of the outlets and the day and date of the sales call. Each salesman has been given a motorbike for his mobility. There is a large cube shaped box at the back in which the stock is kept. Sales Force Motivation: From time to time both the Area Sales Office as well as UB initiates competitions for salesmen. For example in the month of July there was a competition for Gold Flake (sx) the criteria for which are as under: Criteria:* Sales Targets-Rs.750 Productivity-Rs.750 Promotion Awareness-Rs.250 Packet Display-Rs.250 Total Prize Money-Rs.2000 Each salesman had to fulfill the criteria for winning this prize money. The Salesmen evaluation was to be done by the Sales Promoter Field Sales Officer: UB has appointed 2 Field Sales Officer who have been assigned the job of supervising the activities of the salesmen. 67 PTC'S PROMOTION STATEGY: PROMOTION "It is one of the four controllable variables (with product, price and place) of the marketing mix".* Promotion Mix It is "the range of means available to an organisation for communication with its target market - advertising, sales promotion, personal selling, publicity and public relations." The entire scheme of operations pertaining to promotion at PTC is mapped out by people at the head office at Islamabad. They instruct the sales offices all over the country to execute these operations. ADVERTISING "Any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor".* 68 PTC"S advertisements that formerly featured in almost all the media have declined substantially owing to the strict media regulations formulated by the government with the aim of discouraging tobacco related products particularly cigarettes. Nevertheless, PTC"s brands have over the decades through ensuring sustained superior quality and a bond with both it"s distributors, retailers and above all it"s consumers, have successfully captured a significant market share. SALES PROMOTION* Sales Promotion is "a marketing discipline that utilizes a variety of incentive techniques to structure sales related programs targeted to consumers, trade and or sales levels that generate a specific, measurable action or response for a product or service". PTC has always been engaged in vigorous sales promotion activities to lure the consumer towards its brands. It employs a number of strategies in this regard such as "Push Strategy" aimed mainly at the resellers such as the retailers by offering them various incentives to secure their brands against those of the competitors by attracting more consumers towards PTC"s high quality brands. 69 On the other hand "Pull Strategy" aims to attract the consumer directly which is done mainly through consumer promotional tools. During the internship period the internee happened to experience one such promotional Program using both the "Pull" and "Push" strategies. A scheme was introduced in the month of July for Gold Flake (sx) which is regarded as relatively weaker brand in NWFP though having a much stronger reputation and standing particularly in the Punjab area. The scheme entailed an offer of 3 full packs to the retailers upon the return of ten empty packs along with the wrapper of the outer duly stamped. Whereas, for consumers a similar offer was given. However, the scheme apparently did not meet with much success as reflected through the response and the attitude of the retailers. (a)CONSUMER PROMOTION Consumer Promotions are directed at the ultimate user of the good or service. From time to time PTC utilizes a number of such promotional tools most of which have been quite successful: Samples Sampling allows the consumer to experience the product or service first hand. It is the job of the Sales Promoter at PTC"s Sales Office to give out free samples of its brands to smokers who might be loyal to the brand of a rival 70 producer. For instance free samples of GF 10HL were given out to smokers by SP"s during consumer contact. Coupons Legal certificate offered by manufacturers and retailers that grant specified savings on selected products are called Coupons. They must be presented for redemption at the Point Of Purchase. Coupons are used mainly to encourage trial and induce brand switching. It main advantage is that it allows the advertiser to lower prices without relying on cooperation from the retailer. A number of Coupon schemes have been introduced for various brand categories from time to time. A very popular coupon scheme introduced by PTC was that of "Voyage Of Discovery" on its GL brand in 2001 which stipulated a grand prize of Rs.30,00,000 for winner. Price Pack Such deals provide the consumer with something extra through the pack itself. However, it is less common in the case of PTC"s promotional strategies. Premium A premium is a tangible reward for performing a particular act. It is also called incentive marketing and it works because the premium ads value to the product. Recently, there was a scheme introduced whereby all the retailers were directed to offer the customer an extra pack of Gold Flake on the production of three empty packs of 10HL or 20 HL packs of the same brand. 71 Sweepstakes Sweepstakes require the participants to submit their names to be included in a drawing or other chance selection. Quite often either during sampling or consumer contact sales promoters take down the names and addresses of the consumers thus contacted and use the data among other purposes also for drawing in which the lucky ones can win loads of exciting prizes. Games The data provided by the Sales Promoters through the consumer contact is also used for carrying out draws and then the names of consumers thus obtained from the draws are then invited to take part in all kids of fun games. Recently, during the Shandoor Polo Tournament the Area Office had organized a variety of games such as "Musical chair" and "Tug of War" (b) TRADE PROMOTION Trade Promotion is aimed at the intermediaries such as retailers and wholesalers. PTC uses several trade promotion tools such as Contests PTC also allows its retailers to participate in different kinds of contests as part of the promotional strategy of a certain brand. There was a contest recently in which the retailers had to decorate their shops and winner was to be judged on the basis of how well the shop had been adorned. 72 Pop-Displays/Merchandising PTC offers a variety of merchandising items such as Banners, counter units, Kiosks, Mirrors, Clocks, Modulars, Tube Shades, Hoardings etc to those valued retailers who have had an impressive track record of sales. Advertising specialties Specialty advertising includes souvenirs such as hats, T-shirts, key chains, watches with the logo of either the brand or the producer. PTC gives away such items to the consumers through the retailers. PERSONAL SELLING: "Personal Selling, a form of promotion utilising the services of a sales team; one of the major controllable variables (with advertising, sales promotion and publicity) of the promotion mix." At PTC Personal selling activities are performed by the SP"s. PUBLIC RELATIONS: "Building good relations with the company"s various publics by obtaining favourable publicity, building up a good corporate image, and handling or heading off unfavourable rumours, stories and events." Most of the PR issues are handled by the head office and though the sales office does not have a PR officer having exclusive PR related functions yet all the TMO's and SP's have over the course of their dealings with the market acquired the skills to negotiate with all kinds of 73 PTC'S TRADE MARKETING PRACTICES PTC"S marketing department has been divided into two sections: BRAND MARKETING TRADE MARKETING BRAND MARKETING It is concerned with the marketing activities relating to the various brands manufactured by PTC. At PTC Brand marketing consists how best to determine the needs and wants of potential customers, developing a sound brand marketing strategy to meet those needs and wants, and executing a plan that incorporates the brand marketing strategy focused around the specific brand being marketed. TRADE MARKETING AT THE AREA SALES OFFICE Almost the entire set of activities at the Peshawar Area Sales Office is based on the concept of "Trade Marketing". It is primarily concerned with channels of distribution and the subsequent promotional strategies of brands. It is the duty of all the regional managers to ensure that all the go down inventories are maintained according to the actual and estimated requirements. "Trade marketing" as a notion entails various marketing related activities such as: 74 Sales Handling demand orders Supply to the distributors and retailers All the subsequent Promotional activities etc. TMO There are three TMO's at the Peshawar office who have been assigned their respective stations or markets. Each TMO has been provided with a laptop and a Suzuki van for market visits .This person heads a team of SP's who are answerable to him. The job of a TMO centres around the market i.e. He is the immediate authority who assigns tasks to SP"s under him, Visits and inspects the outlets, Checks and ensures availability of stock at the shops, Inquires about the position of brands Vis-à-vis competing brands, Supervises the distribution network. Deals with consumer promotion activities such as different types of offers. Addressing the grievances of retailers. Handling complaints. Providing merchandising accessories and handling merchandising activities. Supervising and maintaining all the important documents and papers such as SD20,SD9,CF,CLAIMS REGISTER,MERCHANDISING REGISTER etc. 75 Organising functions (Concerts, melas etc for promoting company"s name) Coordinating different types of surveys. Directs his SP"s for further course of action. SP SP performs marketing functions. SP"s go by their FCP. This FCP is in fact a monthly schedule of tasks assigned to an SP. Besides, there is an Activity Planner Sheet for each SP which specifies the no of beats to be visited by the SP over the month. Each SP visits shops in his beat i.e. the specific area assigned to him in a particular market. One beat could encompass an area with maximum 50 shops. SP makes consumer contact in which he would give away free packet of a particular brand to smokers for trial and would also give necessary information about the brand, details of which he would enter into his Consumer Contact Register. Communicates with the shopkeeper about any running scheme or proposed scheme or any other offer. Listen to and take down consumer and retailer complaints which he would later communicate to his superiors. He examines and ensures stock availability and pack display. Ensures the full coverage of his respective beat. Endeavours to make productive those outlets that were formerly unproductive. 76 Deals with the merchandising material such as posters, stickers, bunting etc. And sees whether the distributor"s salesman makes regular sales calls at the shops in his beat or not. Moreover, he has to keep a log book in which to make entries of departure from and arrival at the beats so as to make TE claims at the end of the month. The Sales Promoters have been provided with motor bikes (for urban areas) and Suzuki vans for carrying out activities in rural areas. SWOT analysis A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. It ought to be noted that the following SWOT Analysis is by no means an exhaustive in depth analysis or the exact picture of the of the state of affairs in the company, as there are many subtle aspects which are to 77 be dealt with in a much broader perspective. Rather it only seeks to express the views of the internee to the best of his understanding. SWOT ANALYSIS OF PAKISTAN TOBACCO COMPANY: Strengths: In the analysis of the Strengths of the company we focused on the competencies of the PTC its entirety. PTC"s own reputation as a dynamic enterprise. Technological sophistication in terms of highly advanced production techniques and manufacturing plants. Offering superior quality brands has helped the company in carving out an image for itself both in the market and in the hearts of the consumers thus winning the trust of both. Highly competent and diverse work force throughout the ranks of the company. Compliance with the regulations of the government and regular payment of taxes has earned the company the respect of all and sundry. Major contributor to the national revenue of the state. Major contributor to numerous causes such as forestation campaign, free mobile dispensaries, training schools and the company"s concern for the eco system. 78 A highly advanced and systematic distribution network and supply chain. Utilization of highly creative and state of the art marketing tools. Excellent corporate culture, which is more growth, oriented. A strong interactive communication system. And above all the banner of BAT. Weaknesses: Failure of PTC to file a strong case against lower quality brands whose producers do not pay any tax to the government and yet have maintained a prominent presence in the market. Cigarette being a controversial product convincing the consumer to prefer PTC"s brands to competitors because of the quality of their constituents has become an uphill task. For gaining an edge over the competitors and in a bid to live up to its image in the market much of PTC"s operations are highly costly. So financial resources are being extravagantly used. Cutting back on such cost may be difficult, because of which in recent years the company has done extensive across the board retrenchment. 79 Opportunities: Since PTC has already captured a major share of the local market in it"s pocket which has been ensured by the availability of their brands in virtually every shop all over the country, so it appears less likely that any big attractive opportunity would be missed by it. PTC will assess the prospects and will avail it as and when as it presents itself. However, PTC has a golden opportunity to expand its distribution network to the neighbouring Afghanistan and realize the prospects of a full fledged manufacturing unit in that country. This would help them capture another big profitable market. This big opportunity is backed and justified by the existing strong operations of the Area Sales Office at Peshawar. Threats: The biggest threat that PTC is faced with at this point in time is posed by the widespread rampant smuggling of foreign brands that are much cheaper and eat away a big chunk of profit of the company. Another threat is that of the "counterfeit" cigarettes which too are easily available in the market. These brands on the one hand because of 80 their low quality tarnish the image of the genuine brands and on the other deprive the company of a good share. Tobacco being a controversial product, governments enforce strict regulatory measures from time to time to discourage its mass production which is also a genuine threat for the company. Imposition of high taxation on tobacco related products especially, cigarettes. Speaking plainly of competition one has to acknowledge the fact that some brands in the lower category such as "Press" and "Morven" are giving a tough time to some of the PTC"s lower category brands particularly in NWFP. The growing health hazards such as cancer and ailment of the heart and their attribution to smoking may also create a potential threatening situation for the company. PTC"s selective approach towards its retail merchandising as opposed to the competitor"s readiness and promptness in their aggressive merchandising may create problems for the company. In a future scenario there is a great likelihood of a possible confrontation between anti-smoking campaigners and tobacco produce 81 SWOT analysis of competitor (LTC) Strengths to Ltc : LTC is PTC"s largest competitor and the second legal cigarette manufacturer in the Pakistan besides PTC. LTC used to be affiliated with Phillip Morris, the giant in the global cigarette market. LTC has 25% more resources and three times more salesman than PTC, and this almost unlimited budget are due to tax evasion. Weaknesses of Ltc: The biggest weakness of LTC is money making and it believes in short-term gains rather than long- term benefits. LTC uses quite unethical marketing strategies. Its price is not properly positioned in relation to the theme, thus this promotion lacks harmony. LTC"s cigarettes are not completely tax evaded; a very small amount of tax is paid. Threats to Ltc: According to LTC the biggest threat is the growing market share and increasing profit rate of PTC. The management of the LTC takes a strong notice of their competitor"s new business investments and innovations in this field. 82 RECOMMENDATIONS: We will put some of our recommendation in front of the company so that company can improve. PTC"s Area Sales Office should either be immediately renovated or shifted somewhere else as its present location with the state of its office building and the premises in no way give an onlooker the impression of a proper PTC"s marketing and sales office in NWFP. It is for the reason that any new set up with amenities such as air conditioners, and comfortable furniture would make the sales force sluggish. However, this belief on part of the internee has been negated by most of the staff members. Though the matter has been under discussion for a long time but no concrete measures have been taken till now. However, we recommends that in view of the this pressing need of a new building which could serve as an office at least on tentative basis, the 83 Area Sales Office should be shifted to UB office. * Both the Area Manager and the TMO"s have to realize that in order to boost the efficiency and moral of the sales force they must be motivated. It implies that proper appreciation must be accorded to them according to their performance mostly in the form of monetary reward upon the accomplishment of the sales target of each respective SP. The Sales Office must cut back on their daily expenses particularly the extra expenses of the fuel of the vehicles and those of telephone at the office. As stated in the "Analysis" section the SP"s do not have any real job security as they can be hired and fired at the behest of the Area Manager. Therefore, has to be a system in place whereby sales force hiring and termination could be done so that no arbitrary decision is taken. A canteen must be set up at the Sales Office for the staff who at present do not have a proper 84 facility for tea and meals which are bought mostly from a hotel nearby. Besides, a cook must be hired on permanent basis to ease up the burden of the Warehouse loader who a present has dual or may be more jobs of loader, peon, cook as well as a watchman at times. The Watchman on duty at the Sales Office is an elderly gentleman nearing his eighties should be replaced by a young guard who would watch over both the office and the warehouse. Instead of Suzuki pick ups, Jeeps should be provided to the SP"s who are given four wheelers. This is for the reason that Suzuki pick ups have not been found to be up to the task particularly when it comes to rugged terrain of the rural areas for which these vehicles are mostly used. As stated in the "Analysis" section PTC"s GF brand was re launched in NWFP with an aim to build a market for this brand. Since GF was a "Punjabi" brand that is why it was assumed that increased marketing efforts will have to be applied to make it a success in the province. But the initial response from the retailers as well as the consumers was not encouraging. All the marketing strategies and planning should then be aimed at the consumers in such a way that 85 the slogans and images carry the message to the consumer in a very convincing fashion for winning their favour. The modalities of such a strategy should be worked out by marketing team familiar with the tastes, conventions and preferences of the local people. And such a course of action applies to other brands too. The company must have periodic meetings in which to allow the staff members at the sales offices all over the country to share their experiences of the market conditions, tradition, and tastes peculiar to a market with the marketing teams at the helm of decision making. This would in turn facilitate the task of marketing department at the head office to chalk out effective and efficient strategies for different markets according to their demands. PTC must initiate a vigorous campaign for curbing the growing menace of smuggling of foreign cigarettes into the local market. And since NWFP has the notorious reputation for being the hub of smuggled and contra banned goods in the country as most of smuggled brands sneak into the country through Afghan border therefore, it is incumbent 86 on officials at the Area Sales Office to go out of the way in a bid to put an end to this trade. For this the company should collaborate with the retailers and custom officials to pin point such elements who are engaged in this trade and through Concerted efforts uproot them. PTC is also confronted by the mushrooming of industries engaged in the production of counterfeit cigarettes in the names of PTC"s brands. And again this trade too is rife and flourishing in NWFP. PTC must press the government for stringent measures against counterfeit brands as they tarnish the company"s image in the market. Likewise, a large number of non-tax paying cigarette manufacturers are into the business in the province who must be taken to task and their operations be halted and confiscated forthwith. PTC being a major contributor to the national revenue must safeguard its interests in the face of the threats posed by the aforementioned factors. In this regard the company must advocate a strong case against all those entities engaged in the same trade but operating through illicit means. 87 The transporter supplying the stock to distributors located along the "Route" must be accompanied by a guard. Usually PTC places more emphasis on its retailers wherase, the small time sellers of tobacco products such as the vendors who have no settled outlets but who constitute a reasonable market in NWFP are mostly ignored. If the company instructs its sales force to cover these sellers with mobile shops on the foot path and elsewhere on the streets too in terms of communicating company"s schemes and offers on certain brands then they too can make up a good market. 88 REFRENCES www.bat.com www.goliath.ecnext.com www.business.com www.connect2web.com Interviews of different officers of different departments. Khushal Khan Khattak (BTL executive) Aimal Khattak (quality assurance officer) 89 Questions about "PTC" Q: 1) History, founder and starting date of PTC? Q: 2) What are the objective and goal of PTC? Q: 3) How much profit do you earn in a year? Q: 4) How much area and cities do you cover? Q: 5) What about the sales and subscriptions of PTC? Q: 6) Do you provide some facilities to your customers? Q: 7) What about price of your brands? Q: 8) How many departments do you have? Q: 9) How many substitutes you have and what about your position in market? Q: 10) what type of quality you mostly focus on? Q: 11) Does your brand are about all age groups? Q: 12) Do you give subscription and other facilities to your consumers? Q: 13) Do you use and adopt the latest technologies in printing and other department? Q: 14) What is your head office and regional office? Q: 15) What is your most selling product or brand? Q: 16) what type of advertisement you like for your promotion of products? 90 Q: 17) Do you have bench marked some other organization? Survey Questionnaire Pakistan Tobacco Company Name: __________________________ Occupation: ______________________ Q1: What is your age? Under 16 years. 16 to 25. 25 to 35. 35 to 50. 50 and above. Q2: What is your occupation? _________________________ _________________________ _________________________ Q3. Are you smoker? Yes. No. Q4: Which brand of PTC do you use? Benson. Gold leaf. Capstan. Gold flak. Embassy. Q5. Are you satisfied with the tobacco quality of it? Yes. 91 No. Q6. Are you satisfied with price of it? Yes. No. Q7. Are the prices of brands of Pakistan Tobacco Company is better then the Competitors? Yes. No. Q8: How did you come to know about the PTC? From friend. By seeing it somewhere. Through net. Through advertisement. Other ____________________________________. Q9. Are you a regular user of these brands? Yes. No. Q10. Are you satisfied with the quality of these brands? Full satisfied. Some what satisfied? Q11: Do you think that PTC provides better brands as compared to others? Yes. No. Q12: Which brand of PTC u use a lot? Benson. Gold leaf. Capstan. Gold flak. Embassy. Q13. Are you satisfied with the marketing promotion of PTC? Yes. No Q14. What do you think cigarettes are properly packed and prevented from the external environment? Yes. No. Q15: What do you think about the price of these brands? Cheap. 92 Expensive. Q16: Do you use the brands of PTC if yes then which one? Benson. Gold leaf. Capstan. Gold flak. Embassy. Q17: What do you think about the material use in these brands .Is it hard to smoking? Yes. No. Q18: Does PTC have any Political impact? Yes. No. Q19. Is PTC contributing socially in country? Yes. No. Q20: Do you use other brands then PTC brands? Yes. No. Q21: If you use other brands then what is the main difference between PTC brands and other"s _________________________ _________________________ Q22: Which department you think should be improved in order to better the quality of PTC brands? Marketing department. Sales department. Management department. IT department. Cora department Q23: Do you think PTC provides change taste than others? Yes. No. Q24: What do you think how PTC can be improved ______________________________________________________ __________________ ______________________________________________________ __________________ Q25: Any comments: 93 ______________________________________________________ __________________ ______________________________________________________ __________________ Signature _________________ Thanks for your kind cooperation 94
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