Usmanhameed Abdul majid M .

irfan Mohsitariq

(10353) (10312) (10363) (10355)

Subject:
Marketing Channel

Presented to:
Sir Imran ijaz

Bba 6 c

Superior University

Executive Summary:
We the students of the students of SuperiorUniversity and required to submit a report on "Marketing Channel. There by we have full filled our requirement and have listed our findings in the following pages. We were required to choose a company and analyze its marketing channel or distribution channel in detail. In order to achieve the objective of this project we had to rely on our own analytical skills as well the information we received from the major players in the Industry i.e. mainly the leading manufacturer in the Industry as the likes of Pak hero. We even went further to compile consumer views about different motorcycles and the dealer opinions on the different brands available. To full fill the extensive requirements of this report we broke each and every one of the companys activities in order to conduct and procure a more in-depth and more meaningful analysis.We hope the following pages will be better able to answer and give thoughtful insight into Pak hero.

Company Background:
Pakistan is one of those countries of the world where Auto Rickshaws are extensively used as a public transport. Till 1996, Italian made Rickshaws were used in Pakistan having 90% market share.In 1996, a young Pakistani businessman and industrialist, Mr. Muhammad JavedIqbal introduced PAK HERO RICKSHAW in Pakistani market. Produced within the limited resources this Rickshaw was a masterpiece of quality and performance which brought about a revolution in the auto industry. It gained extensive popularity and in a very short period of time, PAK HERO became a known name all over Pakistan. PAK HERO auto rickshaw having similar functions, shape and use as that of Italian made rickshaw, proved to be a very close substitute for it. It is amazing that Pak Hero became the market leder in a period of only three year and its demand has been on the rise ever since. PAK HERO is a private limited company; its board of Directors cop rises the following members Mr. JavedIqbal (Chairman/CEO) Mr. Abdul Hameed (Director Marketing & Sales) Mr. Sabir Sharif (General Manager Production) Mr. Syed Shahid Mustafa (General Manager Finance) Companys registered office is situated in Lahore, at Lytton Road and its factory is located at 10km, Raiwind Road, Lahore, Pakistan. PAK HERO is a private limited company. Its factory is located at 10 km Raiwind Road, Lahore. Some of the important industrial units of Pakistan lie in this region, being declared as Industrial Zone. Factory of PAK HERO is spread over four and a half acres of land. The other units of PAK HERO is its warehouse and lies adjacent to the factory.

Channel Structure:

Domestic (Supplier)

Manufacturer

Plant (Process)

Loaders

Warehouse

Finished Goods

Distribution Centers

Authorized dealers

End users(Custome rs)

Features:
Pak Hero Company has 150 Dealers in all over the Pakistan. It can offer Rs 3000 margin per bike to their dealers. Pak Hero Bikes are exported in Bangladesh, Srilanka and Kenya. It contain 25 own showroom in Lahore. Pak Hero have local supplier for their production material. Pak Hero has their own distribution channel.

Description of Members
The member that also support the marketing channel system. In these member include seller member, order booker, merchandiser, sale promotion officer, tritely officer and sale areas managers. These members promote the channel system and also work. Sale member (who sell the product) Order booker (who order the product) Merchandiser (who merchandising the product) Sale promotion officer (who promotion the product) Sale area manager (who observe all activities all member

Area sale Manager

Terity Officer

Sale promotion officer

Merchandiser

Order broker

Sale manager

Efficiency template:

Weight for flows Benefit Final potential weight high Medium Low High Medium Low Medium High 37 14 8 10 8 3 6 14 100

Propotional flow performance for channel member Manufacturer Distributor Retailer End Total user 40 30 40 30 25 40 20 20 33.6 20 40 20 40 40 30 40 30 29.4 20 20 30 25 30 20 30 30 26.75 20 10 10 5 5 0 10 20 10.25 100 100 100 100 100 100 100 100 100

Gap analysis:
There are two types of gaps, demand side and supply side gaps. During the audit of the channel of Pak hero Pvt Ltd., we found both of these types of gaps. These gaps have been identified by the analysis of the Automobile manufacturing industry. For the purpose of data collection we used the questionnaire method. These questions were then asked from the Plant manager of Pak Hero Pvt. Ltd. and then on the analysis of the interview the following demand side and supply side gaps were identified: Credit purchases Timely delivery Stock waiting time Relying on dealers heavily

Credit purchases is the supply side gap, because the company purchases the raw material on credit bases and makes payment very late due to which the supplier of raw material suffers, thus it may result in the imbalanced relationship of supplier and the company. Sometimes the vehicles are not in the position to deliver the products, thus resulting in late delivery of the products to the Dealer. Stock waiting time is the demand side gap, because when the dealer orders for the companys products then he has to wait for minimum of 30 days and there is no fixed time delivery that creates uncertain situation for the authorized dealers of the products. Another demand side gap is that the company is relying heavily on the dealers for their sales volume which creates the demand side gap for the firm.

Power and Conflict Characteristics Power

In the marketing channel of Pak Hero private limited company the main power is in the hand of company. There are four types of power used in the marketing channel of Pak Hero private limited company : Reward power Coercive power Expert power Legitimate power

The power of reward is in the hand of company because the company gives the discounts and allowances to dealers. The company can hire a new dealer or to fire an old dealer so the coercive power is also in the hand of company. Company have its secrete ingredients and formula so the expert power is in the hand of company Legal documentation between the company and dealer can create a power for both the dealer and the company is legitimate power.

Conflict
Pak Hero Company has two kinds of conflicts. 1. Goal conflict 2. domain conflict Most conflict is rooted in differences in channel member's goals, their perception of reality and what they consider to be their domain or area, where they should operate with autonomy.

Goal Conflict:
In Pak Hero Company wants higher margin for self but the dealer want higher margin for self. The company wants higher price to dealer while lower price to end user. Company

wants that dealer purchase more inventories of their products but the dealer wants to hold less inventory.

Domain conflict:
Manufacturer of Pak Hero wants to sell their product to multiple segments but the authorized dealer of Pak Hero want to sell the company's product to the target segment. Manufacturer desire for mass coverage of his product in the market, while on the other hand the dealer likes to sell their product in selective market

Suggestions:
Stock waiting time is the demand side gap, because when the dealer orders for the companys products then he has to wait for 30 days and there is no fixed time delivery that creates uncertain situation for the dealer of the products. a. Dealer must be made aware of the products delivery time from the manufacturer to the dealer so it will reduce the uncertain situation of the dealer, thus creating their commitment and satisfaction. 2. Communication between the channel members should be improved. 3. Trust and mutual understanding should be developed through out the channel. 4. The profits must be distributed equally based on the value that each channel member creates. 5. The company may create alliances through the vertical integration to boost their sales volume up. 6. Try to in touch with customers 7. Also focus other than major cities 8. Develop a system of feedback 9. Focus on advertisement 10. Incentive for dealers

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