Internship Report on Khalid Modren Ghee and Cooking oil Mills, Hasilpur
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Transcript of Internship Report on Khalid Modren Ghee and Cooking oil Mills, Hasilpur
INTERNSHIP REPORT ON
KHALID MODREN INDUSTRIES (PVT) LTD. (GHEE & COOKING OIL MILLS)
Specialization in Marketing
Submitted To The Chairman
Department of Business Administration
ALLAMA IQBAL OPEN UNIVERSITY- ISLAMABAD
Submitted By:
Name : MUHAMMAD UMAR FAROOQ
Roll No. Q580408
Reg. No. 01-PBR-0379
Mailing Address: 26, Quaid-e-Azam Colony,
Hasilpur Contact No#: 03036341366/0333-6341366
Date of Submission: 15 Oct, 2014
ACKNOWLEDGMENTS
No one writes alone. So I would like to thanks all those members who
proved to be a great source in completion of report. They have been a
source of knowledge for me as they helped me much in understanding the
report.
I especially thank
to my parents, because looked after me and brought me up
to my wife who helped me to compose the project.
To the staff of KMI especially MR. ALTAF HUSSAIN, Manager
Administration, Khalid Modern Industries (Pvt) Ltd. and teachers.
PREFACE
In order to be able to cope with the changing environment it is
necessary to have some practical experience. As a student of Business
Administration we have to pass through a series of various managerial
techniques. During this practical course we are provided with an opportunity
to learn that how the theoretical knowledge can be implemented in practical
grounds.
I was selected to do my internship in Khalid Modern Industries (Pvt.)
Limited. I worked there for six weeks & it gave me a greater practical
knowledge about the operations of KMI (Pvt.) Limited. In the following
pages I have narrated my experience, observations & all the working
activities which I observed during my six weeks internship.
MUHAMMAD UMAR FAROOQ
Q580408
01-PBR-0379
LIST OF CONTENTS
CONTENTS PAGE #
ACKNOWLEDGMENT II
PREFACE III
EXECUTIVE SUMMARY 2
MISSION STATEMENT 5
VISION STATEMENT 6
INTRODUCTION OBJECTIVES OF STUDYING THE ORGANIZATION…………………………………………... 7
OVERVIEW OF THE ORGANIZATION 8
BRIEF HISTORY 8
NATURE OF THE ORGANIZATION 9
PRODUCATION PROCESS 9
BUSINESS VOLUME 12
PROFILE OF EMPLOYEES 13
PRODUCT LINES 14
WHAT IS COOKING OIL 16
MODREN LAUNDRY SOAP 25
ORGANIZATION STRUCTURE 26
MAIN OFFICES 28
MARKETING OPERATIONS 28
STRUCTURE OF THE MARKETING DEPARTMENT 29
NUMBER OF EMPLOYEES IN THE MARKETING DEPARTMENT 29
MARKETING OPERATIONS 30
FUNCTIONS OF THE MARKETING DEPARTMENT 32
MARKETING STRATEGY 33
PRODUCT PLANNING, DEVELOPMENT & MANAGEMENT 33
PRICING STRATEGY 33
DISTRIBUTION STRATEGY 36
PROMOTIONAL STRATEGY 37
CRITICAL ANALYSIS OF THE THEORETICAL CONCEPTS RELATING TO
PRACTICAL EXPERIENCES 40
SUCCESS AND FAILURE OF DIFFERENT PRODUCTS OF THE
ORGANIZATION IN THE MARKET ALONG WITH REASONS 43
MAJOR COMPETITORS OF THE ORGANIZATION 45
FUTURE PROSPECTS OF THE ORGANIZATION 46
SHORT-FALLS/WEAKNESSES OF THE MARKETING DEPARTMENT 47
CRITICAL ANALYSIS OF THE MANAGEMENT PATTERNS OF THE
ORGANIZATION WITH REFERENCE TO MARKETING OPERATIONS,
WEAK AREAS WHICH NEED TO BE IMPROVED
47
CONCLUSIONS & RECOMMENDATIONS FOR IMPROVEMENT 49
REFERENCES & SOURCES 53
LIST OF TABLES & ILLUSTRATIONS
TABLES/ILLUSTRATIONS PAGE #
FIGURE 1-5: Graphical representation of last 5 years trend in Sales……….…………13
TABLE 1-5: Last Five years business volume of Khalid Modern……………………..12
TABLE 1-1: Modern ghee product line / packing range…………………………….…14
TABLE 1-2: Modern cooking oil product line / product range………………………...15
FIGURE 1-6: How cooking oil Drived………………………………………………...18
TABLE 1-3: Modern laundry soap product line / product range……………………….25
FIGURE 1-1: KMI organizational structure…………………………………………...27
FIGURE 1-2: Hierarchy of Marketing Department of Khalid Modern………………..30
TABLE 1-4: Modern’s price adjustment strategies……………………………………34
FIGURE 1-3: Consumer channel of Khalid Modern Industries……………………….37
FIGURE 1-4: Modern push strategy…………………………………………………...37
EXECUTIVE SUMMARY
As a student of MBA I also got the chance to be a part of a reputed
business organization during my summer vacations. This practice by the
institutions is known as Internship Program. It is a compulsory part of our
studies and as per rules of the DBA, Allama Iqbal Open University
Islamabad for each and every student of MBA program.
This report is about my internship program with the KMI Pvt. (Ltd.)
an Edible Oil or Food Oil company working in Pakistan, at Hasilpur. In this
report I have discussed every aspect of the company regarding Marketing &
Sales department, which I observed and perceived during my internship
program.
In this report you will find the detail about the company right from its
incorporation to the current position. Along with it, the processes of
marketing and sales planning are also discussed in detail.
The internship program included work mostly in the Marketing and
Sales Department. However information for all departments is included in
this report. This report includes chapters on history of organization, its
management, and fields of activities, and recommendations for improvement
of Organization.
This report will serve to be an important document for the
organization. Recommendations for improvement of the organization are
also noted and they can serve to be beneficial for the organization.
The best thing which is playing the most important role in their
success is the Sales Force. They called them the “Front Line Tigers.” The
Sales & Marketing system of KMI is integrated bottom to top. RSM
personally checks the work of every ASM, TSO, DSR by arranging the
meetings at the regional office 2 or 3 times in a month.
They are using the Marketing strategies Customer Pull and other
ATL and BTL techniques according to the situation arise. The company
have divided the whole country into 6 regions. Every region is separate from
the other in context of every thing. The basic priority of the company is the
best quality oil manufacturing and provision to the customers.
The sales representatives of KMI follows some specific rules about
the dealing with the shop keepers while suggesting the orders and during
checking the stock available at the outlet and the display of their product, if
display is not appropriate the DSR manage the display according to the
suggested pattern.
MODREN is known as the quality leader in the edible oil sector and
enjoying a very good repute in the market and in the food oil sector. They
are providing the services for every segment of the society by providing the
Ghee and Cooking oil according to their financial capabilities.
o Modren Ghee
o Modren Cooking Oil
o Modern laundry soap
The working of the front line sales force is checked by the continuous
visits of the officials in the markets. They design the promotion campaigns
according to the minds of that specific area which they want to attract. The
sales reports are sent to the regional office daily from the distributions.
KMI is the first and only company which is using the SPIDER
software for the management of sales. They check the sales on the basis of
number of SKU’s ordered by the retailers and their prime objective is to get
maximum sales according to the SKU method.
Environmental Protection Bylaws state that it is mandatory for edible
oil and fats factories in Pakistan to have an effluent treatment plant so that
the environment is not damaged by the effluents from the factory. However
KMI is the only brand to have invested substantially in order to acquire this
plant and maintain it. This is MODREN’s humble contribution towards
conserving and sustaining this natural resource. The treated effluent water
from the Effluent Treatment Plant at KMI meets the National Environmental
Quality Standards (NEQS) and is used for irrigation purposes within the
factory only.
Mission statement
Their mission is to produce quality banaspati ghee/cooking oil and these
items at less prices and easily accessible in the market to customers and earn
maximum profit.
VISION STATEMENT
Their vision is to stand in the line of first three top Banaspati Ghee /Cooking
oil manufacturing mills
INTRODUCTION
M/S Khalid Modern Industries (Pvt) Ltd (Ghee & Cooking Oil Unit) is a
vanaspati ghee and cooking oil manufacturing organization. It is situated in Hasilpur
Distt: Bahawalpur. It has production capacity 150 M.Tons ghee/cooking oil daily.
Khalid Modern Industries (Pvt) Ltd. (KMI) is a group of organizations having
two cotton units, two oil mills, one solvent extraction plant and one ghee/cooking oil
mills in Hasilpur. KMI group also owns a sugar mills in Peshawer namely “Khazana
Sugar Mills, Peshawer”.mission statement
Khalid Modern prepares Vegetable Ghee, Cooking oil and Laundry Soap as a
bye product. The major ingredients of Modern ghee are Palm oil, Palm Olien,
Cottonseed oil and/or Soya bean oil and the major ingredients of Modern Cooking oil
are Canola oil, Sunflower oil and/or Soya bean oil.
7. OVERVIEW OF THE ORGANIZATION
7.1 Brief History
M/S Khalid Modern Industries (Pvt) Ltd. is located in Hasilpur.
KMI (Khalid Modern Industries (Pvt) Ltd.) has started their business in January, 1990
as a cotton factory & oil mills.
After experience of 8 years of an organization, KMI entered in the field of
Vanaspati ghee/Cooking oil and a ghee/cooking oil unit is established at Vehari road,
Hasilpur in 1998. Its production capacity is 150 M.Tons daily.
KMI group purchased a sugar mills in peshawer namely “Khazana Sugar
Mills during auction in 1999. In February 2002, this group also purchased another
cotton factory (Ex: Ali Cotton factory, Chhona wala road, Hasilpur) during auction.
The success story of KMI group doesn’t stop here, it goes/is going ahead.
In 2003, KMI group established a Solvent extraction plant in the premises of cotton
factory at Vehari road Hasilpur.
In Hasilpur, the major unit is Ghee/Cooking Oil Unit. However 5 units are
working under the name of Khalid Modern group of Industries (Pvt) Ltd. as follows:
1) Khalid Modern Industries (Pvt) Ltd. (Cotton Unit 1) Vehari road, Hasilpur
2) Khalid Modern Industries (Pvt) Ltd. (Ghee/Cooking Unit) Hasilpur
3) Khalid Modern Industries (Pvt) Ltd. (Cotton Unit 2)
Chhona Wala road, Hasilpur
4) Khalid Modern Industries (Pvt) Ltd. (Solvent Extraction Unit) Hasilpur.
5) Khazana Sugar Mills, Peshawer
7.2 Nature of the Organization
KMI is basically a manufacturing organization. Vegetable ghee & cooking
oil is prepared according to the standards set by Pakistan Standard & Quality Control
Authority (PSQCA). This vegetable ghee/cooking oil manufacturing concern is a
member of PVMA (Pakistan vanaspati manufacturers association).
Vegetable ghee is prepared from Palm Oil, Palm Olien, Cotton Seed Oil
and/or Soya Bean Oil. These ingredients are purchased from local or international
market, processed, prepared and then packaged vanaspati ghee according to PSQCA
standard for sale.
PRODUCTION PROCESS
Khalid Modern produces Vegetable Ghee, Cooking oil and Laundry Soap as a bye
product. The major ingredients of Modern ghee are Palm oil, Palm Olien, Cottonseed
oil /or Soya bean oil and the major ingredients of Modern Cooking oil are Canola oil,
Sunflower oil and/or Soya bean oil. These items are purcased from national and
international market, , processed, prepared and then packaged according to PSQCA
standard for sale.
In production process the imported oil& national oil is stored in
storage . This industry has 8 storage tanks . The total storage capacity of
these tanks is 4320 M.ton. per tank storage capacity is 540 M ton. In
Pakistan this industry is the second big storage capacity in ghee &
cooking oil industry.
De-Gumming
The first step is the removal of gummy matter such as phospholipids and lipoproteins etc.
from raw soybean or cottonseed oil. It is accomplished by exposing the oil to water and
adding the phosphoric acid at 50oC. As a result precipitate of gum is generated which is
removed from the
Neutlizer:
Pre-neutralization process is done to remove FFA from raw oil. Caustic Soda solution
proportionate to FFA is mixed with oil. This results in the neutralization of the FFA. The
resulting soap stock is allowed to settle and then drained out from the refining kettle.
Three hot water washings are given to remove residual soap.
Bleacher:
The purpose of oil bleaching is to eliminate its colouring pigments through the adsorption
on bleaching earth. Pak earth is used for bleaching because of its excellent adsorption
power. The bleached oil containing pak earth is passed through a series of filter presses to
remove the spent earth.
Auto Clay:
Hydrogenation process, is, the hardening of oil to. Reduce its UN: saturation. At the same
time, it improves the stability of the product against its oxidation. Chemically, the degree
of un-saturation decreases by passing hydrogen gas through oil in-the presence of nickel
catalyst at 150oC.
Deodorization:
Most of the odorous substances 'along with FFA, sterols, to copherols, saturated and
unsaturated hydrocarbons and pesticides are stripped out by injecting dry steam into oil at
235 -245oC. Citric acid is also added to remove the odour. After deodorization, the
deodorized oil is cooled in the decooler to about 85oC. The remaining odorous
substances are removed during the de-cooling under vacuum. After cooling the hard oil is
passed through a final filter press called "Polish Filter", which removes undissolved citric
acid, remaining particles of the-pak earth :or -nickel catalyst, and any other fine
impurities. It also reduces the intensity of the final colour of the oil/ghee.
Final Filtration:
After deodorization process the oil is passed through the final filtration.
Finished Storage Tanks:
Then the oil is store in the finished storage tanks.
Packing section:
In this section the Ghee is charged to the packing section. All the packing is done with
the automatic machines.
Cold Store:
The Ghee is refined at high temperature so it is most important step of the ghee
manufacturing. In cold room high compressor is use for cooling.
Laboratory tests
For providing the good quality banaspati ghee in the market the oil is tested
in the laboratory according to the pakistan standard and quality control
FFA Test 0.2%maximum
Moisturiz 0.1%maximum
Melting point 35.5to36 degree centigrade
Vitamin tests A&D vitamin tests
Business Volume
The current average sale of KMI is 2500-3000 M.Tons per month. Thus
the total turnover is 155-185 million rupees per year. Modern has divided their market
in two zones:
Zone 1: For Faisalabad/Upper Punjab region
Zone 2: For Southern Punjab region
The company’s last five years business performances are given in tabulated and
graphical form as follows: (Table 1-5 & Figure 1-5).
TABLE 1-5: Last five years business volume of Khalid Modern
Sr.
No
YEARS TOTAL SALES
(M. TON)
AVERAGE SALES/
per MONTH
(M. TON)
1 2005-06 9600 800
2 2006-07 9000 750
3 2007-08 8700 725
4 2008-09 8580 715
5 2009-10 8400 700
FIGURE 1-5: Graphical representation of last 5 years trend in Sales.
Profile of Employees
The organization setup comprises of a Production department, a
Mechanical department, Sales & marketing department, a Finance department, an
Administrative department & Accounts department. Each department has its own
team and is guided and monitored by the department head. Major employees profile is
as under:
Mr. Mehmood-ul-Hassan: General Manager
Mr. Shahid Ashraf : Administration Manager
Mr. Muhammad Akram: purchase Manager
Mr. Altaf Hussain: Finance Manager
Mr. Muhammad Iftikhar: Production manager
Mr. Anwar Ali Marketing manager
In addition, more than 196 employees are working in different departments and sections
of KMI (Ghee/Cooking Oil Unit).
7.3 Product Lines
Modern has simple product lines in the field of Vegatable ghee, Cooking oil
and Laundry soap. Vanaspati ghee and cooking oil product lines consist of Modern
Banaspati, Modern cooking oil and Modern Pakwan oil respectively. Table 1-1 & Table
1-2 shows vegetable ghee & cooking oil product line/packing range respectively.
TABLE 1-1: Modern ghee product line / packing range
PACKING RANGE
PRODUCT LINE
MODERN BANASPATI
Tin Packs
16 Kg Tin
10 Kg Tin
5 Kg Tin
2.5 Kg Tin
Bucket Packs
16 Kg B/C
10 Kg B/C
5 Kg B/C
2.5 Kg B/C
Carton Packs
10 Kg C/N 12 Kg C/N
1 Kg X 10Pouches
½ X 20 Pouches
¼ X 40 Pouches
1 Kg X 12 Pouches
½ Kg X 24 Pouches
¼ X 48 Pouches
TABLE 1-2: Modern cooking oil product line / packing range
PACKING
RANGE
PRODUCT LINE
MODERN COOKING
OIL
MODERN PAKWAN
OIL
Tin Packs
16 Litre Tin
10 Litre Tin
5 Litre Tin
2.5 Litre Tin
4 Litre Tin
2 Litre Tin
Carton & Bottle
Packs
1 Litre X 5 Pouches
1 Litre X 10 Pouches
3 Litre Bottle
1 Litre X 10 Pouches
What is Cooking Oil?
Background:
Cooking oil consists of edible vegetable oils derived from olives, peanuts, and
Sunflowers , to name just a few of the many plants that are used. Liquid at room
temperature, cooking oils are sometimes added during the preparation of processed foods
. They are also used to fry foods and to make salad dressing.People in many regions
began to process vegetable oils thousands of years ago, utilizing whatever food stuffs
they had on hand to obtain oils for a variety of cooking purposes.
Early peoples learned to use the sun, a fire, or an oven to heat oily plant products
until the plants exuded oil that could then be collected. The Chinese and Japanese
produced soy oil as early as 2000 B.C., while southern Europeans had begun to produce
olive oil by 3000 B.C. In Mexico and North America, peanuts and sunflower seeds were
roasted and beaten into a paste before being boiled in water; the oil that rose to the
surface was then skimmed off. Africans also grated and beat palm kernels and coconut
meat and then boiled the resulting pulp, skimming the hot oil off the water. Some oils
have become available only recently, as extraction technology has improved. Corn oil
first became available in the 1960s. Cotton oil, watermelon seed oil, grapeseed oil, and
others are now being considered as ways to make use of seeds that were, until recently,
considered waste.
The first efforts to increase output were undertaken independently in China,
Egypt, Greece, and Rome, among other places. Using a spherical or conical stone mortar
and pestle, vertical or horizontal millstones, or simply their feet, people began to crush
vegetable matter to increase its available surface area. The ground material would
subsequently be placed in sieves such as shallow, flat wicker baskets that were stacked,
sometimes as many as 50 high. The matter was then pressed using lever or wedge
presses. The Greeks and Romans improved this process by introducing edge runners to
grind and a winch or screw to operate a lever press. Their method was used throughout
the Middle Ages.
Refinements of this approach included a stamper press that was invented in
Holland in the 1600s and used until the 1800s to extract oil, a roll mill invented by
English engineer John Smeaton in 1750 to crush vegetable matter more efficiently, and
the hydraulic press, invented by Joseph Bramah in England. The first improved screw
press was invented by V. D. Anderson in the United States in 1876. His Expeller (a trade
name) continuously operated a cage press. When vegetable matter was placed in
Anderson's closed press, the resultant oil drained out of slots in the side. A screw
increased the pressure through the cage toward a restricted opening.
Enhancements in grinding and pressing plant matter were followed by
improvements in extracting the oil. In 1856, Deiss of England obtained the first patent for
extraction of oil using solvents, following experiments by Jesse Fisher in 1843. At first,
solvents such as benzene were pumped through the material and drained through false
perforated bottoms. Later, Bollman and Hildebrandt of Germany independently
developed continuous systems that sprayed the material with solvent. Both methods were
eventually improved, and today solvent extraction is standard in the vegetable oil
industry.
FIGURE 1-6: Graphical representation How Cooking oil Drived
Cooking oil manufacture involves cleaning the seeds, grinding them, pressing, and
extrading the oil from them. In extracting, a volatile hydrocarbon such as hexane is used
as a solvent.
After extracting, the oil is refined, mixed with an alkaline substance, and washed
in a centrifuge. Further washing and refining follows, and then the oil is filtered and/or
distilled. It is then ready for packaging.
Over time extracting vegetable oils has become more and more efficient. The very
earliest methods of pressing the vegetable matter probably obtained, at best, 10 percent of
the oil available. On the other hand, more modern methods involving solvent extraction
can extract all but. 5 to 2 percent of the oil.
Raw Materials
The average bottle of cooking oil contains vegetable oil, with no additives,
preservatives, or special flavorings. The oil comes from various parts of plants, in most
cases from what are commonly called seeds (including sunflower, palm kernel, safflower,
cotton, sesame, and grapeseed oils) or nuts (including peanut, soybean, almond, and
walnut oils). A few special cases involve merely squeezing the oil from the flesh of the
fruit of the plant. For example, coconut oil comes from the coconut's white meat, palm oil
from the pulp of the palm fruit, and olive oil from the flesh of fresh olives. Atypically,
corn oil is derived from the germ (embryo) of the kernel.
The Manufacturing Process
Some vegetable oils, such as olive, peanut, and some coconut and sunflower oils,
are cold-pressed. This method, which entails minimal processing, produces a light,
flavorful oil suitable for some cooking needs. Most oil sources, however, are not suitable
for cold pressing, because it would leave many undesirable trace elements in the oil,
causing it to be odiferous, bitter tasting, or dark. These oils undergo many steps beyond
mere extraction to produce a bland, clear, and consistent oil.
Cleaning and grinding
1. Incoming oil seeds are passed over magnets to remove any trace metal before
being dehulled, deskinned, or otherwise stripped of all extraneous material. In the
case of cotton, the ginned seeds must be stripped of their lint as well as dehulled.
In the case of corn, the kernel must undergo milling to separate the germ.
2. The stripped seeds or nuts are then ground into coarse meal to provide more
surface area to be pressed. Mechanized grooved rollers or hammer mills crush the
material to the proper consistency. The meal is then heated to facilitate the
extraction of the oil. While the procedure allows more oil to be pressed out, more
impurities are also pressed out with the oil, and these must be removed before the
oil can be deemed edible.
Pressing
3. The heated meal is then fed continuously into a screw press, which increases
the pressure progressively as the meal passes through a slotted barrel. Pressure
generally increases from 68,950 to 20,6850 kilopascals as the oil is squeezed out
from the slots in the barrel, where it can be recovered.
Extracting additional oil with solvents
4. Soybeans are usually not pressed at all before solvent extraction, because they
have relatively little oil, but most oil seeds with more oil are pressed and solvent-
treated. After the initial oil has been recovered from the screw press, the oil cake
remaining in the press is processed by solvent extraction to attain the maximum
yield. A volatile hydrocarbon (most commonly hexane) dissolves the oil out of
the oil cake, which is then recovered by distilling the light solvent out. The Blaw-
Knox Rotocell is used to meet the demands of the United States soybean oil
industry. In using this machine, flakes of meal are sent through wedge-shaped
cells of a cylindrical vessel. The solvent then passes through the matter to be
collected at the bottom. Also still in use by a significant number of manufacturers
is the Bollman or Hansa-Muhle unit, in which oilseed flakes are placed in
perforated baskets that circulate continuously. The solvent percolates through the
matter which is periodically dumped and replaced.
Removing solvent traces
5. Ninety percent of the solvent remaining in the extracted oil simply evaporates,
and, as it does, it is collected for reuse. The rest is retrieved with the use of a
stripping column. The oil is boiled by steam, and the lighter hexane floats upward.
As it condenses, it, too, is collected.
Refining the oil
6. The oil is next refined to remove color, odor, and bitterness. Refining consists
of heating the oil to between 107 and 188 degrees Fahrenheit (40 and 85 degrees
Celsius) and mixing an alkaline substance such as sodium hydroxide or sodium
carbonate with it. Soap forms from the undesired fatty acids and the alkaline
additive, and it is usually removed by centrifuge. The oil is further washed to
remove traces of soap and then dried.
7. Oils are also degummed at this time by treating them with water heated to
between 188 and 206 degrees Fahrenheit (85 and 95 degrees Celsius), steam, or
water with acid. The gums, most of which are phosphatides, precipitate out, and
the dregs are removed by centrifuge.
8. Oil that will be heated (for use in cooking) is then bleached by filtering it
through fuller's earth, activated carbon, or activated clays that absorb certain
pigmented material from the oil. By contrast, oil that will undergo refrigeration
(because it is intended for salad dressing, for example) is winterized—rapidly
chilled and filtered to remove waxes. This procedure ensures that the oil will not
partially solidify in the refrigerator.
9. Finally, the oil is deodorized. In this process, steam is passed over hot oil in a
vacuum at between 440 and 485 degrees Fahrenheit (225 and 250 degrees
Celsius), thus allowing the volatile taste and odor components to distill from the
oil. Typically, citric acid at. 01 percent is also added to oil after deodorization to
inactivate trace metals that might promote oxidation within the oil and hence
shorten its shelf-life.
Packaging the oil
10. The completely processed oil is then I V measured and poured into clean
containers, usually plastic bottles for domestic oils to be sold in supermarkets,
glass bottles for imports or domestic oils to be sold in specialty stores, or cans for
imports (usually olive oil).
By Products/ Waste
The most obvious byproduct of the oil making process is oil seed cake. Most
kinds of seed cake are used to make animal feed and low-grade fertilizer; others are
simply disposed of. In the case of cotton, the lint on the seed is used to make yarn and
cellulose that go into such products as mattresses, rayon, and lacquer. Coconut oil
generates several byproducts, with various uses: desiccated coconut meat(copra) is used
in the confectionery industry; coconut milk can be consumed; and coir, the fiber from the
outer coat, is used to make mats and rope. Since corn oil is derived from a small portion
of the entire kernel, it creates corn meal and hominy if it is dry milled, and corn starch
and corn syrup if it is wet milled.
Lecithin is a byproduct of the degumming process used in making soybean oil.
This industrially valuable product is used to make animal feed, chocolate, cosmetics,
soap, paint, and plastics—to name just a few of its diverse uses. Recent research has
focused on utilizing the residual oil seed cake. The cake is high in protein and other
nutrients, and researchers are working to develop methods of processing it into a
palatable food that can be distributed in areas where people lack sufficient protein in their
diets. This goal requires ridding (through additional processing) the oil seed cake of
various undesirable toxins (such as gossypol in cotton seed, or aflatoxin in peanut meal).
Initial results are promising.
Quality Control
The nuts and seeds used to make oil are inspected and graded after harvest by
licensed inspectors in accordance with the United States Grain Standards Act, and the fat
content of the incoming seeds is measured. For the best oil, the seeds should not be stored
at all, or for a only very short time, since storage increases the chance of deterioration due
to mold, loss of nutrients, and rancidity. The seeds should be stored in well-ventilated
warehouses with a constantly maintained low temperature and humidity. Pests should be
eradicated, and mold growth should be kept to a minimum. Seeds to be stored must have
a low moisture content (around 10 percent), or they should be dried until it reaches this
level (dryer seeds are less likely to encourage the growth of mold).
Processed oil should be consistent in all aspects such as color, taste, and viscosity.
Color is tested using the Lovibund Tintometer or a similar method in which an
experienced observer compares an oil's color against the shading of standard colored
glasses. Experienced tasters also check the flavor of the oil, and its viscosity is measured
using a viscometer. To use this device, oil is poured into a tube that has a bulb at one end
set off by two marks. The oil is then drained, and the time required for the bulb to empty
is measured and compared to a chart to determine viscosity.
In addition, the oil should be free of impurities and meet the demands placed upon
it for use in cooking. To ensure this, the product is tested under controlled conditions to
see at what temperature it begins to smoke (the smoke point), flash, and catch on fire;
warnings are issued appropriately. To allow its safe use in baking and frying, an oil
should have a smoke point of between 402 and 503 degrees Fahrenheit (204 and 260
degrees Celsius). The temperature is then lowered to test the oil's cloud point. This is
ascertained by chilling 120 milliliters of salad oil to a temperature of 35 degrees
Fahrenheit (zero degrees Celsius) for five and a half hours, during which period
acceptable salad oil will not cloud.
Before being filled, the bottles that hold the oil are cleaned and electronically
inspected for foreign material. To prevent oxidation of the oil (and therefore its tendency
to go rancid), the inert (nonreactive) gas nitrogen is used to fill up the space remaining at
the top of the bottle.
Modren Laundry Soap
Oil dirt is obtained as a bye-product from ghee/cooking oil preparation. Thus Modern
Laundry Soap is prepared from the oil dirt and other necessary ingredients. This soap is
used for cleaning cloths. Table 1-3 shows laundry soap product line/packing range.
TABLE 1-3: Modern laundry soap product line / packing range
PACKING
RANGE
PRODUCT LINE
MODERN LAUNDRY SOAP
Carton Packs
350 grams X 20 Cakes (7 Kg Carton)
350 grams X 40 Cakes (14 Kg Carton)
Polythene pack 450 grams X 2 Cakes
(900 grams polythene shopper pack)
8. ORGANIZATIONAL STRUCTURE
The organization has a departmental structure. Each department has its own
team that is guided and monitored by the departmental head. One admin manager and a
general manger administer, manage and control all departments. The major departments
of KMI are as follows:
Production department
Mechanical department
Sales & Marketing department
Finance department
Administration department
Purchase department
Accounts department
Electrolizer department
Figure 1-1 shows the complete organizational hierarchy of Khalid Modern
Industries (Pvt) Ltd.
Main Offices
KMI has two main offices:
Factory Office
Head Office
Factory office is located in the premises of factory at Vehari road Hasilpur.
Head office is located in H-11, Islamabad where the company chairman/managing
director, company secretary and other supporting employees are monitored and
controlled the whole company business activities.
8.1 Marketing Operations
No company can survive without finance. In KMI, financial department
provides necessary funds to manufacture and market vanaspati ghee/cooking oil that
fulfills the customer demands and needs. Necessary resources are provided to
production department to develop a product that meets the market demand.
Khalid Modern uses distribution system for smooth marketing operations.
Distributors are appointed by the Sales & marketing department in a specific territory. At
present, more than 100 distributors are working with the company. Sales & marketing
department takes orders from these distributors then Company’s fleet of transport
delivers these orders/stocks to distributor without any freight cost. Distributors
distribute/resell these stocks to retailers and customers in their specified territory with
support of company’s promotional/publicity material and sales force. Thus KMI market
their products from the point of origin to the point of sale even to the point of usage
through the above-specified marketing operations.
9. STRUCTURE OF THE MARKETING DEPARTMENT
Sales & marketing department of KMI is guided and monitored by the sales &
marketing manager and it works under the supervision of General Manager. It is located
in the premises of ghee/cooking oil mills Hasilpur.
9.1 Number of Employees Working in the Marketing Department
30 employees are working in the Sales & Marketing department. The main
posts are Sales & Marketing manager, Brand mangers, Sales officers, Sales supervisors,
Sales representatives and Sales man. Figure 1-2 shows the hierarchy of marketing
department of Khalid Modern Industries.
FIGURE 1-2: Hierarchy of Marketing Department Of Khalid Modern
9.2 Marketing Operations
KMI market their brands through distribution network in all cities of
Southern Punjab and major cities of Upper Punjab. Distributors are appointed by
observing/analyses of their financial condition and past ghee business experience.
Sales & Marketing
Manager
Product X
Brand Manager
Product Y
Brand Manager
Sales Officers
Sales Supervisor
BWP Region
Sales Supervisor
BWN Region
Sales Supervisor
FSD Region
Sales Supervisor
MLT Region
Sales man Sales man Sales man Sales man
Sales Officers Sales Officers Sales Officers
Distributors lift their stocks according to their set target for the month.
According to company policy, company offers a credit limit of 15 days from the date
delivery to distributors. However distributors may lift stocks on cash payment basis with
a benefit/discount of Rs. 5/16 Kg ghee. Mostly the company delivers these stocks
thorough their fleet of transport consisting 20 Mazda & Hino trucks. Distributors
resell/distribute these stocks to retailers and customers in their specified territory/market
with allowed profit margin.
KMI provide publicity material (Banners, Posters, Publicity pad/Cash
memos, Calendars & Wall clocks) to distributors, uses big & small sign boards,
electronic boards & cable ads for the promotion of their products.
Company sales representatives introduce/market company products with
support of distributors. They represent their company and products. Sales
representatives also ensure the easy availability company products in the market. So
this is how the marketing operations of KMI run for smooth delivery of company
products to customers.
10. FUNCTIONS OF THE MARKETING DEPARTMENT
Sales & Marketing department of KMI performs many functions in phase
marketing strategy, product planning, development & management, pricing strategy,
distribution strategy and promotional strategy.
10.1 Marketing Strategy
Basically, Khalid Modern Industries (Pvt) Ltd. pursues Focus strategy of
marketing. KMI focuses its efforts on serving few geographic and demographic
segments well rather than going after the whole market/whole country. The Province
Punjab market has been divided into regions and cities to market Modern Banaspati,
Modern cooking oil & Modern Pakwan oil. Modern is localizing their products, sales
promotions and sales efforts to fit the needs of individual regions. Modern has divided
their market into two zones:
Zone 1 (Upper Punjab)
Zone 2 (Southern Punjab)
Zone 1 (Upper Punjab):
Most of the zone 1 consumers like tight shape ghee (hard ghee, not liquid
shape) having quality grains of ghee. Modern produces a little bit hard mall/ghee for
this zone. Sometimes Modern also pursues low pricing competition in this zone and
offers special price discount to encounter the price competition.
Zone 2 (Southern Punjab):
This home market is very important for the company strategically. Modern
focuses more on this region and captures large sales volume in this zone. Modern offers
two layers ghee (Upper layer is liquid, lower layer is a little bit hard/tight having
quality grains of ghee) as Zone 2 consumers demand for such quality. Thus company
produces separate production quantity/badges for the two zones.
10.2 Product Planning, Development & Management
Sales & marketing department also plans and manage new/existing
products. A well-defined idea is generated, developed concept and then this product
concept is converted into physical product. Here marketing, engineering and production
department works together to develop the product concept into a physical product. In
2000, marketing & production department planned and developed a new quality of ghee
(Hard shape ghee having quality grains but normal melting point as other ghee brands)
for zone 1. In 2001, Modern also planned/developed a new variety of cooking oil called
Pakwan for commercial frying and for low-income home consumers.
10.3 Pricing Strategy
KMI mostly uses competition-based pricing strategy. The major rivals of
Modern include Sultan Banaspati, Shama Banaspati, Asia Banapati, Shehbaz Banaspati
& Niamat Banaspati. Modern bases its prices largely on competitor’s prices with less
attention paid to its own cost or demand. The company also pursues price adjustment
strategies as per market demand and/or company requirement.
Modern Price Adjustment Strategies
KMI usually adjust their basic prices to account for various customers’
differences and changing situations. The company adopts three price-adjustment
strategies as their requirement. Table 1-4 summarizes Modern’s price-adjustment
strategies.
I. Discount pricing
Cash discount
Quantity discount
II. Promotional pricing
III. Geographical pricing
TABLE 1-4: Modern’s price adjustment strategies
STRATEGY DESCRIPTION
Discount prices
Promotional pricing
Geographical pricing
Reducing prices to reward customer/distributor responses
such as paying early to KMI within three days.
Temporary reducing Modern prices to increase short-run
sales of products.
Adjusting prices of Modern to account for the geographical
location of customers
I. Discount Pricing
KMI adjust their basic prices to reward customers for certain responses such
as early payment of bills within three days, volume purchases. These price adjustments
can take many forms:
Cash Discount
A cash discount is a price reduction to buyers who pay their bills within
three days. A typical example is Rs. 5/3 net 15, which means although payment is due
within 15 days, the buyer can deduct Rs. 5 per 16 Kg tin if the bill is paid within 3
days.
Quantity Discount
KMI sometimes offer a price reduction to dealers/buyers on lifting large
volumes of stock. For example, KMI offer to dealers/buyers “Rs 2675 rate per 16 kg tin
for less than 20 M.Tons, Rs. 2660 per 16 Kg tin for 20 M.Tons or more stock lifting.
3.5 % trade discount for those distributors who hold specific allowed credit limit
permanently during business tenure with KMI and pay over-limit amount/ routine bills
within 15 days.
2.5 % trade discount for those distributors who hold excess amount than allowed credit
limit or hold over-due company bills or who do not clear company bills within 15 days
(allowed credit limit); with an agreement to clear over-due amounts in due course of time
or pay bills within 15 days otherwise the company have the right to deduct 1 % from this
trade discount offer.
II. Promotional Discount
KMI temporarily price their products below listed price on some occasions
to draw more customers. Promotional pricing takes several forms such as cash rebates
to dealers who buy within specified time & on special events. For example, Ramzan
month pricing & Eid days pricing to increase short-run sales.
III. Geographical Pricing
KMI charges same prices to all customers/dealers regardless of their
location. Thus the company charges freight-absorption pricing. Company absorbs all of
the actual freight charges in offers to get more business.
10.4 Distribution Strategy
KMI (Khalid Modern Industries (Pvt) Ltd.) sell its products through
exclusive distribution. Company agrees to sell its products only to a single wholesaling
middleman in a given market/ territory. Exclusive dealing also includes exclusive
territorial agreements. KMI may not agree to sell to any other middleman in a given
area; and the buyer/distributor may agree to sell only in its own territory as agreement.
In this practice, KMI tries to keep its dealers not selling outside its boundary/territory.
Thus the indirect channel is used to market the company’s products to
ultimate consumers. Figure 1-3 shows consumer distribution channel of KMI. This
channel contains two intermediary levels: a wholesaler & a retailer.
FIGURE 1-3: Consumer channel of Khalid Modern Industries.
10.5 Promotional Strategy
Modern has set up a marketing office to continue working on local
advertising, promotion, personal selling and community events. The company uses the
affordable method for promotional budget. They spend what the management thinks the
company can afford. The company has adopted the following Promotional mix strategy
and Modern promotional mix.
Promotion Mix Strategy
Khalid Modern Industries have choosed the push strategy for promotion.
Figure 1-4 shows push strategy the company adopts:
KMI marketing activities Resellers marketing activities
FIGURE 1-4: Modern push strategy
Khalid Modern
Industries
Wholesalers
&
Retailers
Consumers
Producer Wholesaler Retailer Consumers
Modern push strategy involves “pushing” the products through distribution
channels to final consumers by using sales force and trade promotion. So Modern
directs its activities (primarily personal selling and trade promotion) toward channel
members to induce them to carry the product and to promote it to final consumers.
Modern Promotional Mix
Khalid Modern uses a blend of promotional tools – personal selling, trade
promotions and advertising.
Personal Selling
KMI has a sales force of 20 people, headed by their area sales supervisors.
They market company brands in their specified market territory, build longer customer
relationships, observe customer’s needs and preferences; and make quicker adjustments
or send proposals/input to marketing department.
Trade Promotions
Modern trade promotions are targeted toward wholesalers and retailers.
Modern uses many trade promotion tools: Discount or price-off, free speciality-
advertising items. The company offers a straight discount off the list price during a
stated period of time such as Rs. 15/ 16 kg tin discount. It encourages dealers to buy in
bulk quantity.
KMI provide dealers specialty advertising items: publicity pads/ memo
pads, wall clocks, modern caps, calendars, key rings, banners/posters, modern pencils
and others.
Advertising
Ziaqa, Ghazayiat Aur Miyar Aik Saath
Lazat, Sihat Aur Zaiqa Ki Baat, Modern Banaspati Kai Saath
The advertising objective of Modern is basically to inform and persuade
people. The company uses print, electronic and outdoor media for advertising. Ads are
published in “The Daily Khabrain, The Daily Express and The Daily Nawa-y-Waqat”
on some special occasions. Cable advertising is telecasted in different cities of Southern
Punjab or in the cities where the company market their brands.
In addition, Modern uses big sign boards, banners, printed pan flex sheets,
shop boards; mazda/hino trucks with painting ads and special wall chalking for outdoor
advertising.
11. CRITICAL ANALYSIS OF THE THEORETICAL CONCEPTS
RELATING TO PRACTICAL EXPERIENCES.
No one strategy is enough for a company but KMI uses only one focus strategy.
The main philosophy of focus strategy is “A firm or an SBU concentrates on part of a
market and tries to satisfy it with either a very low-priced or highly distinctive products” In
KMI, focus strategy hasn’t implemented successfully in both the Zones (Zone 1 & Zone 2),
neither low price wise nor distinctive product wise. For example, I observed price
competition in Zone 1; other low-price brands are available against Modern like Yadgar,
Khiaban & Kousar Banaspati.
Planning & development is a major pitfall of the company. There is no separate
R & D department. Planning, development and management is also the responsibility of
marketing department. No satisfactory efforts have been taken yet regarding new product
planning, development and management.
The pricing strategy of the company represents a picture of competitor’s phobia,
with less or no attention to cost or demand. KMI doesn’t take first initial step to price
changes. They always follow their competitors such as they don’t reduce prices first
temporarily to increase short-run seasonal sales until their competitors do. Moreover they
don’t provide rate rebate to their clients to save them from losses. Another major problem
lies with Modern, They couldn’t gain confidence of trade and consumers that’s why the
unit is not getting the required standard prices as their competitor Sultan is getting.
The geographical policy of the company is not an adequate one. For long distance
areas like NWFP and other provinces, there is no clear company policy or framework to
deliver stocks/company products on what price-adjustments. Problems always occur when
a distributor is appointed in other than Punjab province area or far areas.
Although KMI offers all range of packing like poly packs, tins, buckets and others
but most of the packing ranges have some problems. Packing designs are not eye-catching;
labeling & literature is not correct and innovative. There is no stock management of all
packing ranges for in-time/smooth delivery to middleman.
KMI is providing 0.5% leakage of total amount of ghee to distributors.
However, incase of huge damage (leakage), there is no clear policy for this issue. Further,
there is no system to replace damage and substandard products/tins. Currently, the
company has no clear policy to keep oil reserves to maintain uniform quality ghee
standard in the market. Thus the company couldn’t build uniform quality standard and is
failure to gain consumer loyalty.
Although the exclusive distribution strategy is the right strategy to market
ghee/cooking oil products but the whole company distribution system is not perfect one.
Most of the distributors have taken huge credit limits but they haven’t used it properly.
They have blocked the company payments and have invested it in other ghee company
brand that is the clear violation of exclusive distribution agreement. Ultimately, Company
has beard huge losses in shape of dead credit. Some of the distributors don’t have past
ghee business experience; they also don’t have enough resources to invest in the market.
So they keep credit themselves for other business use and don’t provide enough credit to
retailers. Neither they dispatch payments in time, nor they lift enough stocks. These
defaulters are in huge number in the company distribution network.
In the promotional field, Khalid Modern lacks too much. Neither the company
hasn’t set up a regular budget for promotional program, nor they have proper
planning/objective for promotional program. The company adopts only the push strategy.
They only push product through distribution channels to final consumers without any
efforts for consumer promotion but research shows that a blend of push & pull strategies
are appropriate for promotional program. Moreover the company used only personal
selling, trade promotions and advertising but with drawbacks. Personal selling force is
mostly unprofessional and untrained. These people are not selected on merit.
Public relation is an important element of integrated marketing communications
to build good relations with company’s various public and to maintain good corporate
image. No planning is made yet to build good relations with various public of
Khalid Modern.
Advertising strategy consists of two major elements: creating advertising
message and selecting adverting media. Modern ad is not a creative advertising message
pursuing no clear adverting objectives. The company has no media planning, as there is
no separate media department. Just city cable is used for ad telecasting; no national level
channels like PTV, Geo etc. are used for electronic media. Firstly according to my study,
Modern has major concentration in far areas/side areas from the main city but the cable
has access to mostly in urban areas, not in rural areas. So cable media (electronic media)
has no full access to Modern’s actual/prospecting consumer markets. Secondly, Cable ad
program is not managed appropriately. It is telecasted with joint support (50% share
each) of the company and distributor. Most of the distributors don’t run company ads
continuously while others telecasted less but claimed more from the company. Thus
mostly a conflicting situation arises between the company and distributors on cable ad
payment, as there is no clear expenses limit/criteria for cable ad program. The company
has no specific advertising budget and planning. Thus the whole advertising program is
managed improperly.
Consumer promotion is another key area where the company has no efforts yet.
The management still mistakenly thinks that consumers will buy himself, no need to
persuade consumers; only products should available on every shop and presents enough
profit to trade members. But the product availability position is also very poor in
comparison with other rival company brands.
11.1 Success and Failure of Different Products of the Organization in the Market
along with Reasons.
The major products of Khalid Modern are Modern Banaspati, Modern
Cooking oil, Modern Pakwan oil & Modern Laundry Soap. Modern Banaspati, Modern
Cooking oil, & Modern Laundry Soap have some successes in the market. They have
success stories in their home market area i.e. Southern Punjab market. In this area,
Modern pushes their products till corner shops. The people of Southern Punjab like
Modern quality (liquid shape having quality grains). Consumer purchases cooking oil as
it offers standard quality on cheapest rate. Modern Laundary Soap is a pure Nirol. Pure
Nirol is manufactured by oil dirt of ghee mills and & it has much demand in the market.
Customers buy it quickly on net payments. It is used for washing cloths.
Modern Pakwan Oil is a failure product of Khalid Modern. It is due to its
inferior quality, smell and dull color. The company manufactured it with Rapeseed and
Cottonseed oils but most of the oil consumers don’t consume such oils.
11.2 Major Competitors of the Organization
The major competitors of Khalid Modern are as following:
Al-Hilal Vegetable Ghee & Oil Mills Multan.
Major Products: Sultan Banspati / Cooking oil
Hafiz Ghee & Oil Mills, Multan
Major Products: Shama Banaspati / Cooking Oil
Ahmed Oil & Ghee Industries, Rahim Yar Khan.
Major Products: Shehbaz Banaspati / Cooking oil, Right Banspati / C. Oil
Asia Ghee Mills, Bahawalpur
Major Products: Asia Banaspati / Cooking oil
Salwa Oil & General Industries, Okara
Major Products: Niamat Banaspati / Cooking oil
Madni Group of Industries, Faisalabad
Major Products: Kisan Banaspati / Cooking oil
.
11.3 Future Prospects of the Organization
Khalid Modern has taken a successful start and is now planning to broaden
their exposure having following future prospects:
To expand their market and to penetrate more in the existing market.
To launch media war (electronic media, print media and public
relations program) on national level to create a positive company
image and identity.
To improve their quality standard by producing a uniform quality level
of all major products.
12. SHORT-FALLS/WEAKNESSES OF THE MARKETING DEPARTMENT
Marketing department of Khalid Modern has many weaknesses. It lacks
professionalism. At the same time, professionals cannot ready to work in this “only
order-following environment. Only few employees are professional, most of marketing
personnel are unprofessional and untrained. The company also has no employee-training
program. They are still in the selling stage. Thus they emphasize on selling instead of
marketing.
Another weakness of marketing department is the emphasis on short-term
tactics. They don’t have long-term strategy/vision of their brands. They don’t have a
successful information system. Marketing department performs extra duties such as
R & D, media planning etc. In this mismanage work system, marketing employees didn’t
fulfill the requirements of every task.
12.1 Critical Analysis of the Management Patterns of the Organization with reference
to Marketing Operations, Weak Areas which need to be Improved.
Khalid Modern has functional structure, headed by different departmental
heads. There is lack of coordination in between different departments. Different heads
feel threat of power loss in case of coordination. Some workers find two different
orders for same work from two bosses due to informal workflow and informal internal
orders. So KMI lacks organization structure, systematic working environment and a
standard policy to create a framework for better working.
Authority responsibility & accountability are co-related with each other. The
department heads have much responsibility but having less authority. Sometimes they
cannot take routine decisions themselves. They have to consult again and again to
General Manger and/or MD. These management patterns effect marketing operations of
the company due to less coordination of production/purchase department with
marketing department, which results:
Mostly raw/packing material shortage.
A substandard quality not meets the market need & demand
Late delivery of finished goods to market.
Sales volume level disturbs due to late delivery to market.
So the company needs to improve:
Training and appraisal system of employees.
Intra/Inter department coordination to get smooth work flow and
assigns right authority to every individual
Separate departments and work assignments for marketing,
advertising, R & D, HRM and media.
Horizontal and literal communication systems among different
departments of the organization.
13. CONCLUSIONS & RECOMMENDATIONS FOR IMPROVEMENT
Following conclusions may be drawn from the above study of this organization.
A. Khalid Modern has a weak management structure that represents a picture of
informal organization. Departmental structure is weak as some departments are
mixed with others.
B. Duties/responsibilities & authorities are not clearly assigned to each individual
employee for which they are held responsible. Moreover, tasks are not delegated
properly to each individual.
C. The company lacks coordination among different departments. Manual paper work
is much more and the same task is repeated in many departments, which is a paper
and time wastage activity. Computer systems are installed in only accounts
department but computer professionals are not hired. Thus dual work (manual &
computer) is still done by employees.
D. The company has no strategic vision/objective where it has to go or what it wants to
achieve. Just short-term goals and tactics are to be followed.
E. The company lacks a strategic policy for marketing. All departmental
heads/managers are working under short-term sales approach, not a marketing
approach. Thus no strategic policy has been developed yet to recover huge credit
losses of the company.
F. The company has a weak promotional program. It has no strategic objective, no
message/media planning to be pursued.
RECOMMENDATIONS FOR IMPROVEMENT
Modern may become a reputed national firm in case of adopting the following
necessary recommendations:
Restructuring & Redesigning: The whole organizational systems should be
redesigned and restructured. Its processes, procedures, strategies, policies and tactics
should also be restructured. Sales & Marketing department need special attention and
it also should be restructured and redesigned. Marketing department should not be
mixed with other departments like R & D department and media department.
Strategic Planning: A comprehensive strategic planning should be made; the
organization system should be developed and implemented to achieve a strategic
objective. A continuous assessment & correction (if there is any deviation from
planning) of each department/task of should be done.
Departmentalization: Separate departments should be established for advertising,
HRM and R& D. Employees hiring, training, appraisal and development should be all
systemized and on merit/professional ability basis.
Authority & Responsibility: Right authority should be assigned and delegated to all
levels of management and each individual is responsible and accountable for their
duties/tasks. Inter/Intra departmental coordination & communication should be
improved.
Benchmarking: Organizational processes, strategies & policies should be revised
and a world class benchmarking is required to grow fast.
Total Quality Management: Total quality management system should be developed
and implemented for producing, maintaining and improving uniform quality products.
Management should concentrate on improving ghee/cooking oil quality, packing
quality, marketing quality and services quality more.
Replacement of Substandard Products: Management should stop delivering
substandard consignment in the market. In other case, substandard products should be
replaced immediately those are found in the market.
Product Pricing: The prices of company products should be based on the cost,
demand and competitors’ prices base criteria.
Middleman/Distributor Selection: A standard criteria to appoint channel
members/distributors should be as follows:
Market reputation of the prospecting party/distributor
Financial position or bank statement of the party.
Business volume and past ghee business experience
Available resources (vehicles, storeroom, sales man, display center etc.)
of the party.
Past business record with other ghee/oil mills.
Distributor Credit Limit: The Company should approve a suitable credit limit for
the appointed distributors on the basis of party’s sales volume, payment performance,
party’s requirement & their reputation and territory requirement.
Promotional Program and Budget: The Company should revise their promotional
program; and develop promotional budget with specific objectives, determining the
tasks needed to achieve these objectives, estimating the costs of performing these
tasks. The sum of these costs is the proposed promotional budget. The company
should set its promotion budget based on what its wants to accomplish with
promotion. Moreover, A blend of integrated marketing communications & a blend of
push & pull strategies should be used to compete with prime competitors.
Availability of Products: The Company should ensure easy availability of products
on each retail store even till corner shops to facilitate convenience buying.
Khalid Modern may become a challenger to national level A-category brands
(e.g. Habib Banaspati/Cooking Oil, Dalda Banaspati/Cooking Oil, Kisan Banapati/
Cooking Oil and others) in case of pursuing above-mentioned recommendations
successfully. So this is the way to move forward to become a reputed national firm.
REFERENCES & SOURCES
1. See “Fundamentals of marketing” by William J. Stanton, Tenth edition,
pp. 360-380,453-470
2. Annual Reports of Khalid Modern Industries (Pvt) Ltd. Hasilpur, 1994 & 1995.
3. See “Principles of Marketing” by Philip Kotler, Eighth edition, pp. 274-290, 303-320,
pp. 334-340 and 450-470.
4. “Proposals for unit sales policy” by Iqbal H. Bokhari, Ex. Marketing Manager, Khalid
Modern Industries (Pvt) Ltd. Hasilpur.
5. Marketing records of Khalid Modern Industries (Pvt) Ltd., 1995 & previous.
6. Annual Reports of Khalid Modern Industries (Pvt) Ltd. Hasilpur, 2009 & 2010.
7. “Proposals for unit sales policy” by Iqbal H. Bokhari, Ex. Marketing Manager, Khalid
Modern Industries (Pvt) Ltd. Hasilpur.
8. Marketing records of Khalid Modern Industries (Pvt) Ltd., 2010 & previous.