Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

A Project Report
On

Marketing Plan and Strategy Development

Industry Name: Beverage Industry of Pakistan
Company Name: Cherat cement Pakistan
Submitted By
Hafiz Habib Tayyab

MM141055

Syed Muddasir Akbar

MM141007

Shahid Iqbal

MM141054

Section 01

Submitted To: Arif Vaseer Sir

Advance Strategic Marketing

Page 1

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

TABLE OF CONTENTS
Contents
INTRODUCTION ............................................................................................................................................. 3
CUSTOMER ANALYSIS ................................................................................................................................... 8
Segmentation: ........................................................................................................................................... 9
COMPETITOR ANALYSIS .............................................................................................................................. 11
MARKET/SUB-MARKET ANALYSIS ............................................................................................................... 12
Segment the Market ............................................................................................................................... 12
Market Sample Size................................................................................................................................. 12
Key Success Factors................................................................................................................................. 12
ENVIRONMENTAL ANALYSIS ....................................................................................................................... 13
A.

External Environment ..................................................................................................................... 13

B.

Internal Environment ...................................................................................................................... 15

INTERNAL ANALYSIS .................................................................................................................................... 17

Strengths: ................................................................................................................................................ 17
Weaknesses: ........................................................................................................................................... 17
Existing Business Portfolio ...................................................................................................................... 17
Stock Keeping Units (SKUs) .................................................................................................................... 18
Market Shares for Each Brand in Pakistan .............................................................................................. 18
Width, Length and Depth........................................................................................................................ 18
STRATEGY DEVELOPMENT .......................................................................................................................... 19
Tactical Analysis & Routine Planning Of Market Strategies:................................................................... 19
Forward Integration ................................................................................................................................ 20
Strategy for Competitive Priorities ......................................................................................................... 20

Advance Strategic Marketing

Page 2

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

INTRODUCTION
ntroduction: Cherat Company was incorporated in 1981, and is listed on Karachi, Lahore and
Islamabad stock exchanges. It is a part of the Ghulam Faruque Group which also includes Cherat
Paperstock Limited and Mirpurkhas Sugar Mills Limited, among others. The factory, located
near Nowshera, Khyber Pakhtunkhwa, is built on land bordering the Cherat Hills, the company's
source of high-quality limestone.
Cherat Company has an ISO 9001:2000 certification and manufactures high quality grey
Portland cement using modern and sophisticated production facilities. It is also equipped with
advanced production and quality control systems. The combination of these factors has
developed a strong brand presence for Cherat Company in Afghanistan, KPK and Punjab.
Industry Overview
After a tough FY11 when the country was hit by the Great Floods of 2010, FY12 saw the cement
industry growth by a sturdy 3.45 percent. This growth was largely fuelled by local dispatch
expansions fuelled by post-flood reconstruction activities; a boom in the rural economy of
Pakistan; and inward remittances from expatriate Pakistanis leading to new construction - all of
these factors culminated in an 8.84 percent volumetric growth in local sales. Local cement
retention prices also saw an upward trend, lending some price-based support to local cement
manufacturers.
Exports, however, continued to stifle the growth of the cement industry. Exports declined by
9.12 percent from FY11. This was largely due to two coinciding factors: the first being surplus
capacity for cement production in the Middle East; and the second being a 15.7 percent decrease
in exports to India due to persisting non-tariff trade barriers such as deficiencies in transport
infrastructure and procedural opacity.
Key challenges to the industry during the year were the exorbitant increases in fuel prices;
persisting high costs of borrowing; and low prices in the international market combined with
higher import costs due to the depreciating rupee.
Performance Snapshot FY12
FY12 showed a remarkable turnaround for Cherat Cement. The company posted a 29 percent
increase in turnover, largely driven by better domestic prices for cement coupled with a 7.85
percent increase in local dispatches. This growth was in line with the overall improvement in
market conditions for the cement industry, where most cement companies have registered a
highly profitable year. The 8.04 percent decline in export dispatches was offset to a great extent
by the upward adjustment in the selling price of cement for Afghanistan.
In terms of profitability and overall returns, Cherat Cement increased the Return on Equity to
15.9 percent compared to an ROE of 2.94 percent in FY11. In conducting a DuPont analysis of
this return, it is phenomenal that this increase has come in despite a decrease in financial
leverage (from 2.3 times to 1.71 times) and a hike in costs of several critical input items such as
electricity, freight, furnace oil and packaging material. The rupee depreciation against the dollar
also took its toll. In quantitative terms, the cost of production rose by a steep 17 percent, while
operating costs were a slightly more dramatic 19.96 percent increase.
However, these factors were offset by improving margins and the company's drive towards
alternate sources of energy that are cheaper and more stable in price terms. Much like most other
Advance Strategic Marketing

Page 3

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

cement companies in the industry, Cherat Cement also saw production costs being reduced to a
manageable level due to its efficient utilisation of Water Heat Recovery (WHR) plant coupled
with the use of other alternate sources of fuels. This translated into an operating profit margin of
16.17 percent over the 8.05 percent from the yesteryear.
The next big relief was the reduction of financing costs. With the unwinding of non-current
liabilities taken on by the company for capital expansions and efficiency-enhancement projects,
the Times Interest Earned Ratio increased from 1.19 to 2.84. The recent reduction of 150bps in
policy rates by SBP also contributed to this improvement.
The bottom line improved from a margin of 1.62 percent to eight percent - in absolute terms, the
year-on-year growth in net profit between FY11 and FY12 was a whopping 536 percent.
In terms of market share, sales in Afghanistan drove a six basis point increase in the exportssegment to 4.56 percent of the export market. However, the decline in the local market share of
the company to 2.55 percent caused the company's overall market share to fall from 3.15 percent
in FY11 to 3.08 percent in FY12.
In terms of the company's gearing ratios, the retirement of capital expenditure associated noncurrent liabilities resulted in a healthy improvement in the balance sheet position of the
company. The Debt-to-Equity reduced from 1.3 to 0.71. This displays a reduction in the riskiness
of the company's earnings, and also reflected in the contribution of reduced financing costs to the
augmented net profit margin.
Finally, the liquidity position of Cherat Cement increased to above one. After two years' worth of
negative working capital, the company improved its liquidity to a positive position. However, in
comparison with an industry where working capital levels were generally above two times, the
improvement was inadequate at the least.
Performance over the years
FY10 was a particularly harsh year for Cherat Company. Across the industry, surplus capacity
led to severe price competition which resulted in margins being squeezed out. Cherat Cement
registered net losses of Rs 13.76 million. The operating losses were magnified by the high degree
of financing costs which was a result of dichotomous factors - high levels of financial gearing,
and high interest rates.
Since then, margins have increased significantly. Operating margins in FY10 were at -3.93
percent and have spiked up to 8.05 percent in FY11, and then to 16.17 percent in FY 12. The
spike in net profit margins was even steeper. From -0.4 percent in FY10, they had gone up to
1.62 percent in FY11. Following the retirement of non-current liabilities, the net profit margin
soared to eight percent in FY12.
While local market shares have shown an overall stable trend between FY10 and FY12, the highwater mark of 3.28 percent in 2009 has still not been regained. The export market share has
shown steady growth patterns from 3.25 percent in FY09 to 4.56 percent in FY12, which is
encouraging. However, in terms of total market share, much is left desired in terms of regaining
the FY09 position of 3.27 percent as against the FY12 share of 3.08 percent.
Future Outlook
The cement sector as a whole is poised for a promising FY13, with favourable budgetary
policies, such as an enhancement of PSDP expenditures and reduction in FED. FED on cement
was reduced by a further Rs 100 per ton for FY13, and the budgeted increase in PSDP is also
more than 19 percent of last year's outlays - aspects that bode well for cement players like Cherat
Cement.
Advance Strategic Marketing

Page 4

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

More factors are to be watched out for. Local demand is projected to increase based on increased
private spending fuelled by increased remittances from expatriate Pakistanis and improvements
in the performance of the agricultural sector. Furthermore, with interest rates already slashed by
150bps, and speculations abound for further slashes, the cost of borrowing for the cement sector
will likely reduce, which will allow for greater expansion and reduced costs of business. The
ICCI President has shown a remarkable amount of interest in the sector which contributes Rs 30
billion to the exchequer on an annual basis and employs approximately 150,000 people - that
interest is now translating into a bid to establish export ties with Sri Lanka, where the demand for
Pakistani cement maintenance during FY12 will now be fully operational, and the benefits of the
maintenance and enhancement work will be felt over the coming few years. Furthermore, energy
costs are expected to fall further with the new drive towards alternate fuels through RDF
technology - a deal has been signed with a German company to implement this cost-management
strategy.
The healthy growth in profitability and margins in FY12 have elicited positive comments from
research analysts about the company. is expected to be high.
Company profile:
Incorporated in 1981, Cherat cement is a premier name in the field of cement manufacturing is
listed on Karachi, Lahore and Islamabad stock exchange. The factory , located near Nowshera,
K.P.K IS BUILT ON LAND bordering the Cherat hills, the companys source of high quality
limestone.
Cherat cement has an ISO 9001:2000 CERTIFICATION and manufacturers high quality grey
Portland cement using modern and sophisticated production facilities. It is also equipped with
advanced production and quality control system.
It is one of the leading producers and suppliers of cement in K.P.K and Punjab and enjoys strong
brand loyalty amongst its quality conscious customers. Through its exports, cherat has become
Afghanistans leading brand.
Vision of Cherat cement:
Growth through the best value creation for the benefit of all stakeholders.
Mission of Cherat cement:

Invest in projects that will optimize the risk return profile of the company.
Achieve excellence in business
Maintain competitiveness by leveraging technology.
Continuously develop our human resource.
To be regarded by investors as amongst the best blue-chip stocks in the country.
Core values of Cherat cement.
Always deliver the best quality product to our customers.
Maintain the highest level of integrity, honesty and ethics.

Advance Strategic Marketing

Page 5

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

Use technology to continuously improve our processes.

Develop the capability of our workforce on an ongoing basis.
Safeguard the interests of all our stakeholders.

Statement of ethics & business practices of Cherat cement.

The business policy of the company is based on the principles of honesty, integrity and
professionalism at every stage.
Product quality
Regularly update ourselves with technological advancements in the sold of cement production to
produce cement under highest standards and maintain all relevant technical and professional
standards.
Dealing with employees
Provide congenial work atmosphere where all employees are treated with respect and dignity.
Recognize and reward employees based on their performance and their ability to meet goals and
objectives. Responsibility to interested parties
To be objective, fair and transparent in our dealings with people who have reposed their
confidence in US.
Financial Reporting & Internal Controls
To implement an effective and transparent system of financial reporting and internal controls to
safeguard the interest of our shareholders and fulfill the regulatory requirements.
Procurement of Goods & Services
Only purchase goods and services that are tailored to our requirement and are priced
appropriately. Before taking decision about procurement of any good or service, obtain
quotations from various sources.
Conflict of Interest
All the ads and decisions of the management be motivated by the interest of the company and
activities and involvements of the directors and employees in no way conflict with the interest of
the company.
Adherence to laws of the land
To fulfill all statutory requirements of the Government and its regulatory bodies and follow
relevant and applicable laws of the country.
Environmental Protection

Advance Strategic Marketing

Page 6

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

To protect environment and ensure health and safety of the work force and well-being of the
people living in the adjoining areas of our plant.
We recognize the need for working with optimum efficiency to attain desired levels of
performance. We endeavor to conduct our business with honesty and integrity and produce and
supply cement with care and competence, so that customers receive the quality they truly
deserve.

=============================================================
=============
Cherat Cement Company Limited
=================2012

2011

2010

2009

=============================================================
=============
PROFITABILITY
-------------------------------------------------------------------------Gross profit margin

21.12% 13.36%

2.57% 14.69%

Interest Burden

64.79% 16.16% 217.90% 69.20%

Tax Burdern

76.42% 124.38%

Operating profit Margin %

Net profit margin
ROCE

%
%

16.17%
8.00%
11.90%

8.05%

4.63% 62.00%
-3.93%

1.62% -0.40%
1.93% -0.43%

8.13%

3.49%
4.34%

ROA

9.27%

1.28% -0.28%

3.36%

ROE

15.90%

2.94% -0.61%

7.02%

-------------------------------------------------------------------------LIQUIDITY
Advance Strategic Marketing

Page 7

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

-------------------------------------------------------------------------D/E

times

Net Working capital

Current ratio

0.71

1.30

1.16

1.09

Rs In mm 249,044 -82,362 -382,934 272,437

times

1.24

0.95

0.76

1.25

-------------------------------------------------------------------------ACTIVITY
-------------------------------------------------------------------------Total asset turnover

times

1.16

0.79

0.71

0.96

Inventory turnover

times

2.89

2.84

3.58

3.49

Fixed asset turnover

times

1.59

1.16

0.96

1.34

39.87

37.16

23.95

26.50

Debtor turnover

times

-------------------------------------------------------------------------LEVERAGE
-------------------------------------------------------------------------Financial Leverage

times

1.71

2.30

2.16

2.09

Times Interest Earned

times

2.84

1.19

-0.85

3.25

Debt-to-Equity Ratio

times

0.71

1.30

1.16

1.09

Debt-to-Asset Ratio

times

0.42

0.57

0.54

0.52

=========================================================
CUSTOMER ANALYSIS
There are two main types of Cherat cement customers.
1. Consumers (General Public)
Advance Strategic Marketing

Page 8

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

2. Business (Retail Shops.)

Cherat cement main focus is the retailer market as well as consumers which are the end users,
because end user also impact on business to business products of any industry. Company has to
make its marketing strategies keeping in view the consumer buying behavior. To forecast the
behavior of the consumer is a business problem. Physical aspect of the consumer can be satisfied
but it is difficult to satisfy the consumer psychologically. Consumer buying behavior is affected
by certain factors like Cultural factors, Social factors, Personal factors and Psychological factors.
So the producer should keep these factors in Mind while promoting their product so that they can
acquire the customer and increase their market share. Consumer buying behavior process is
explained in some steps which are discussed below:
Need Identification: The consumer is thirsty and he wants to reduce his thirst.
Information Search: Consumer will search as to what will satisfy his thirst the most.
Evaluation of Alternatives: Consumer will now evaluate from the wide range of beverages
available to him that which one of them is suitable to him in terms of quality, taste and is pocket
friendly.
Selection: After evaluating the product consumer will select a product.
Purchase: The consumer will buy the selected product.
Post-Purchase Experience: It is the experience that the consumer gets after using the product. He
will use the product again if he feels that his satisfaction after use is more or equal to the price of
the product.
Segmentation:
Three Customer segments of Cherat cement includes geographical, demographical and
behavioral, each of these is discussed in turn:
A. Geographic Segmentation
In geographic segmentation, Cherat cement market is sub divided on the basis of area.
Region: Regional differences exist in respect of demand for products. For example, Cherat
cement buyers from Sindh are different from the buyers in Punjab.
Urban/Rural: There are differences in buying behavior of urban and rural customers.
Accordingly, Cherat cement marketing strategies design depending upon their likes, dislikes,
moods, preferences, fashions and buying habits.
Advance Strategic Marketing

Page 9

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

Locality: Cherat cement buying is also reflected by the locality within a particular city. For
instance, there are differences in terms of buying patterns of people residing at Rawalpindi &
Islamabad and Korangi & Defence etc. within a city.
B. Demographic Segmentation
Markets can be divided on demographic factors like age, gender, education etc. The various
demographic factors are:
Age: Analyzing markets by age is to divide the total population into age groups and analyze the
wants and needs of each group. Pepsi Perfect captures the age of 15-50 years old while Pepsi
regular includes this rang of age as well as children.
Income: Cherat cement buying patterns depends on income of the consumers. No two individuals
or families spend money in exactly the same way thats why company launch economy packs of
Cherat cement.
Family Size: The consumption patterns of Cherat cement definitely vary with the number of
people in the household thats why company introduced 1.5 liter & 2.25 liter bottles in the
market.
C. Behavioral Segmentation
Buyers are divided into groups on the basis of their response e.g. usage rate, user status, loyalty
status, buying motives, and so on.
Usage Rate: One possible way to define target market is by product usage. There can be heavy
users, medium users, light users, and nonusers of Pepsi products. Targeting on the basis of who
want to increase consumption; by present users to nonusers and to become users.
User Status: Cherat cement market can be segmented on the basis of user status of Pepsi
products such as: non-user, ex-user, potential user, first-time user, regular-user, & so on.
Readiness Stage: Cherat cement market can be segmented on the basis of peoples readiness to
buy the product. Some people are well informed and are interested to buy the product. Some
other may be well informed but not interested to buy the product.

Advance Strategic Marketing

Page 10

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

Buying Motives: Buyers buy the product with different buying motives such as economy,
convenience, prestige, etc. Accordingly Cherat cement promotional appeals are being used in
directed to the target audience.
COMPETITOR ANALYSIS
The marketing concept states that to be successful, a company must provide greater customer
value and satisfaction than its competitors do. Pepsi has a tough competition with Coca Cola
while it faces a little competition with the local producers RC Cola, Shandy Cola etc. The local
producers hardly affect the sales of Pepsi in the market. Pepsi's greatest rival is Coca Cola. Coca
Cola has an international recognized brand. Cokes basic strength is its brand name. But Pepsi
with its aggressive marketing planning and quick diversification in creating and promoting new
ideas and product packaging, is successfully maintaining is No.1 position in Pakistan. When
Pepsi was introduced in Pakistan, it faced fierce competition with 7up, lemon and lime drinks,
which was established during 1968, in Multan. Pepsi introduced its lemon and lime products to
compete with 7up. It successfully, after some years, took over 7up and this enhanced Cherat
cement's profits and market share. In Pakistan,
There are different types of competitor in the beverage industry which are discussed below:
Close Vs Distant Competitor: Pepsi and Coke are close competitors. It means that both have
direct competition in the market, their products are close substitutes for one another. Both the
products can influence the market share of one another through effective strategies made to cope
up with their competitors. Pepsi cola and RC Cola, Shandy Cola etc. are distant competitors of
one another. It means that their products satisfy the same want but they are in indirect
competition with one another.
Strong Vs Weak: Coca Cola and Pepsi are strong competitors. In Pakistan Pepsi is the market
leader and Coca Cola is its competitor. The Pepsi makes defense strategies so that it can maintain
its position in the market. While Coca Cola is a challenger and it makes attack strategies so that
it can become the market leader. Pepsi and Shandy Cola are weak competitors. Pepsi is the
market leader and Shandy Cola is the follower. Pepsi is not in direct competition with the
Shandy Cola. It means that Shandy Cola has little effect on the sales of Pepsi.
Research shows following facts regarding beverage market in 2013 report:

Total annual sale of soft drink in Pakistan 120 million.

Advance Strategic Marketing

Page 11

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

Pepsi annual sales in Pakistan 75 million.

Market share of Pepsi 65%.

20 to 22 % Coca-Cola and 11 to 13 % others (like RC Cola, Shandy Cola etc.)

Up to 2 million people used Pepsi products daily.

Consumption growth 1.7 % per year.

MARKET/SUB-MARKET ANALYSIS
This statement is quoted from Pepsi Cola International official website. In 1960, Young adults
become the target consumers and Pepsi's advertising keeps pace with "Now it's Pepsi, for those
who think young".
Now there is no specific segmentation of market with respect to customers because their product
is standardized. According to their general manager sales, different brands are targeted towards
people belonging to different age group, according to him 7up is more likely to be preferred by
old age people where as Miranda is popular among teenagers and Pepsi is preferred by people
belonging to any age group.
Segment the Market
The first step in creating "take share" strategies is to segment the market based upon the buying
behavior of your customers. The market segments you choose must satisfy market criteria.
Market Category
Main Market means Main Road, High Volume Market, Wagon Stands, and Commercial Area.
Side Market means Colonies, Mohallah, Links Road, Side Road
Village Market means Village Sides, Small areas
Captive Market means Parks, Cinema, Canteen, Institute, Govt. Offices, Kutchary, and Courts.
Market Sample Size
Main Market 45 % of Total Sample
Side Market 30 % of Total Sample
Village Market 25 % of Total Sample
Key Success Factors
Strong network of distribution
Brand Name
Advertising
Advance Strategic Marketing

Page 12

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

Technology
Formula (Concentration of Ingredients)
ENVIRONMENTAL ANALYSIS
A. External Environment:
General External Environmental Threats and Opportunities:
Opportunities:
Increase in consumption of soft drinks by the consumers.
Population growth.
Pepsi have enough funds to expand their business in Pakistan.
Company may start entering rural areas also.
The company may also diversify its business in some other potential business.
Increased interest of people in musical groups, cultural shows and sports has provided an
opportunity for Pepsi to increase its sales through them.
Threats:
The main competitor of the company is the Coca Cola.
Cola drinks are not good for the health so the awareness level of the people is increasing
which is a big threat to the company.
Low purchasing power of the peoples.
Law and order situation has a great impact on company sales.
High inflation in the Pakistan.
Increasing interest rate.
The macro environment consists of the larger societal forces that affect the microenvironment.
The external factors are not under the control of the marketers and they can just observe them
and make strategies in light of these factors. Some of these factors are given below
a. Demographic Factors:
Age: The requirements of different age groups are different. Pepsi should target that age group
that consumes it the most and make promotional strategies according to their behavior. So their
main target is the young generation.
Population Distribution: Population distribution means how much population lives in urban and
rural areas. In Pakistan 35 % population resides in urban areas and 65% population lives in rural
Advance Strategic Marketing

Page 13

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

areas. Pepsi is focusing on urban areas as people there are more inclined towards such beverage
while people in rural areas are more inclined drinking Lassi and desi drinks.
Population Density: It means number of people in one square km per area. Karachi has the
largest population density and Islamabad has less population density in Pakistan. Pepsi sales are
more in Karachi as compared to the sales in Islamabad.
Education: A company has to make promotional strategies keeping in view the customer level. If
the percentage of education is high in a country then through advertisements people can be made
well aware of their product and can convey their message easily.
b. Economic Factors:
Income and Income per Capita: If the income level or per capita income of the people increases,
it will have a positive effect on the consumption of Pepsi and vice versa.
Inflation: If the country faces inflationary trend in the market, the price of the Pepsi will
ultimately increase which will lower its demand.
Consumption Behavior: Pakistan is a consumption oriented society. Due to show off effect the
people are more inclined towards consumption than saving. So the people of Pakistan spent
heavily on food and beverage items. Hence Pepsi has a good market share in the present
circumstances.
Income Distribution: It means how much is in the hands of rich and poor class. In Pakistan 10%
rich people posses 93% of wealth and 90% people posses 7% of wealth. If there is balanced
distribution of income in the country, the consumption of the people will increase hence
increasing the sales of beverages as well. But in unbalanced income distribution the reason for
increasing sales and profits of beverage industry is show off society of Pakistan.
Economic Policies:

Fiscal Policy: It is the policy of taxes. If heavy tax is levied on Pepsi then its price will
rise having negative impact on its consumption.

Monetary Policy: Monetary policy is made to restrict or increase the supply of money in
the market. If policies are made to restrict the flow of money in the market, inflation can
be controlled hence increasing the real income of the people which will ultimately affect
the consumption of Pepsi.

c. Political and Legal Factors:

Advance Strategic Marketing

Page 14

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

Political Instability: Whenever the government is considered to be stable, the business will
flourish. If there is political stability in the country the policies and strategies made by Pepsi can
be consistent to be implemented. Foreign companies are also keen to invest in those countries
which are politically stable where they have no fear of decline in their market share or shut down
due to sudden change of government. This factor could be a threat for Cherat cement.
Mixed Economy: In mixed economy government and private sector both plays their role in
developing the economy of the country. Investment by foreign companies like Pepsi is more
likely to flourish in mixed economy.
Laws Formulation: Government has given copy rights to Pepsi so that another company cannot
sell their product by the name of Pepsi. The countries where laws are formulated, the strategies
and activities of the company are different.
d. Social and Cultural Factors:
Psychographic: It is a combination of demographic and psychological factors. Psychological
attributes mean how you perceive things. The company will focus on the behavior of consumers
and make different changes in their product quantity or quality and in promoting their product so
that they can attract the customers. Keeping in view that the behavior of different consumers is
not alike they have to make their marketing strategies in accordance with their requirements so
that they are convinced to buy the product.
Religious: Religious factors can influence the market sales of Pepsi as it happened in 2003 when
the U.S attack on Iraq, wide sections of society in Pakistan have banned American multinationals
Coke and Pepsi.
Social Status: Pepsi is a well renowned brand. People who are brand conscious will not drink
beverages of lesser known brands such as Amrat cola. They will try to show their status by
drinking Pepsi which is known to all as a quality drink.
Media: It is a very important factor for marketing and advertisement. Media in these days is a
very effective way of inspiring people to buy a specific product. A good promotion can boast up
sales to a great extent.
Social Responsibility: Pepsis social responsibility is to provide its customers with clean and
hygienic product so to do this they have increased the use of disposable bottles.
B. Internal Environment:
Advance Strategic Marketing

Page 15

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

a. Customers:
There are two main types of Cherat cement customers; consumers (general public) and
businesses (retail shops & restaurants etc.). Cherat cements main focus is the consumers which
are the end users. Company has to make its marketing strategies keeping in view the consumer
buying behavior. To forecast the behavior of the consumer is a business problem.
b. Suppliers:
Suppliers provide raw materials to the producers or sellers. Suppliers form an important link in
the companys overall customer value delivery system. They provide the resources needed by the
company to produce its goods and services. Cherat cement International provides raw materials
to Pepsi franchises in Pakistan. Supplier problems can seriously affect marketing. Marketing
managers must watch supply availability i.e. supply shortages or delays, labor strikes and other
events can cost sales in the short run and damage customer satisfaction in the long run. The
company should monitor the price trends of their key inputs. Rising supply costs may force price
increases that can harm the companys sales volume.
Material
Pepsi Concentrate

Manufacturer/ Suppliers

Approved From

Cherat cement Inc. Ireland & Approval at the Factory

Cherat cement Factory in Hattar
Estate.

Plastic Bottles

Galtron Pakistan Limited

Approved from Cherat cement China.

Glass Bottles

Baluchistan Glass Mills & Tariq Approved by Cherat cement China.

Glass Limited

Carbonated Water

Pakistan Bottlers (Pvt.) Ltd

Approved from Cherat cement U.A.E,

Dubai

c. Competitors:
The marketing concept states that to be successful, a company must provide greater customer
value and satisfaction than its competitors do. Pepsi has a tough competition with Coca Cola
Advance Strategic Marketing

Page 16

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

while it faces a little competition with the local producers like RC Cola, Shandy Cola etc. The
local producers hardly affect the sales of Pepsi in the market.
d. Distributers:
Distributor maintains the image of the product and the sales in the market. If items are not
properly placed by the distributor, it will disperse the market. The Pepsi uses the following two
channels for the distribution of their products.
Indirect Distribution: Indirect distribution involves agency holders e.g. Riaz Bottlers Pvt. Ltd.
Lahore franchise has divided its region i.e. Lahore and Kasur districts in two categories.
Local Zone: These are 62 agencies distributing Pepsi products only around Lahore in their
respective allocated sub zones.
Out Station Zone: 17 dealers have been appointed by the bottlers for far-distant places.
Direct Distribution: The factory vehicles operate on 45 direct routes in Lahore selling
nonreturnable bottles.
INTERNAL ANALYSIS
Strengths:
High quality soft drink.
Suitable brand name.
Good/unique Packaging.
Company has a very established name and a good reputation.
Pepsi has large market share than its competitors.
Strong research & development.
Pepsi spends a lot of budget on its advertising.
Pepsi has a very vast distribution channel and it is easily available everywhere.
Strong relationship with bottlers.
Weaknesses:
Pepsi target only young customers in their promotions.
Pepsi tin pack is not available in far off rural areas.

Existing Business Portfolio

Soda/Carbonated
Advance Strategic Marketing

Water

Chips
Page 17

Marketing Plan & Strategy Development for Cement Industry

In Pakistan
Pepsi cola

Aquafina

2014

Lays

Mirinda

Kurkure

7up
Dew
Stock Keeping Units (SKUs)
SSRB This stands for Single Serving Returnable Bottle (Regular). We are offering Pepsi,
Mirinda, 7-Up & Mountain Dew in this group.
LRB This stands for Liter Returnable Bottle this includes Pepsi, Mirinda & 7-Up. We are not
offering Mountain Dew in this class.
NRB: This stand for Non Returnable Bottle. It can also be called as Deposable It has 300ml
quantity. This group includes Pepsi, Mirinda, 7-Up, Diet Pepsi & Diet 7-Up.
Cane Packing, we are offering cane packing of all that brands that are offered in SSRB. Including
Pepsi, Mirinda, 7-Up and Mountain Dew
Market Shares for Each Brand in Pakistan
Company NAME

MARKET SHARE

Ch

60 %

best

22 %

fuji

9%

Dg khan

9%

attock
Width, Length and Depth
Width

Length

Soda/Carbonated

Pepsi cola

Mirinda

Chips

Lays

Kurkure

Purified water

Aquafina

7up

Dew

Depth
Advance Strategic Marketing

Page 18

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

175 ml Mini Bottle

250 ml Regular Bottle
300 ml Tin
1000 ml Regular Liter Bottle
1500 ml Disposable Bottle
STRATEGY DEVELOPMENT
The first and the most basic job of the sales and marketing department, is to plan, develop and
make targets. To achieve those targets companies need to make strategies. The following major
factors are considered in this respect.

Collection of all the data about each and every distributors/outlets, about its sale, volume,
growth and exclusivity.

Finding the gaps in the market where there is a potential.

Finding the points where competitor is strong and how we can break this point.

Location of non-traditional shops where potential is available for the beverage.

Different offers must be given to break the competitors point or win the mix point.

Tactical Analysis & Routine Planning Of Market Strategies:

On the market side the sales people gather information and on the bases of this information they
further plan and improve their strategies.

Checking of the designated area, its sale, volume and growth.

Calculation of share n brands and package wise

Calculation of daily sales achievements on monthly target basis

Location of the poor performance factors and analyzing their cause

Finding their solution and getting the approval for its execution.

Planning for a schedule for the designated area.

Visiting the area according to the plan and reporting it to the higher management

Advance Strategic Marketing

Page 19

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

Forward Integration
Cherat cement focusing on their outlets because, outlets play an important role in strengthening
the market. By monitoring outlets Cherat cement build their market, have their loyalty and
increase the sale. Sales persons continuously visit outlets, and satisfy their needs and
requirements. They focus on information about outlets growth, volume and type business.
Proper check is maintained to get the feedback from the shopkeepers. Pepsi Cola International is
a large group covering KFC, Pizza Hut, Burger King, Lays Potato Chips & Aquafina (Mineral
Water).
Strategy for Competitive Priorities
Cost- As Pepsi cola Multan is producing standardized products so they have to maintain a fixed
cost. They want to lower per unit cost as well as the total cost of production.
Quality- Pepsi cola Multan is producing a standardized product because all the manufactured
items contain the same amount of the raw material required. So they want to maintain the quality
of products. They want to deliver high quality product according to international standards given
by Pepsi Cola International.
Time- Pepsi Cola Multan meets its delivery-time promises i.e. The Company pays most attention
to delivery -on- time to satisfy customers & retailers needs on the time, which they want.
Flexibility- Pepsi Cola Multan does not focus the unique demand of customers & products are
standardized, So Company works for volume flexibility i.e. Company is able to accelerate or
decelerate the rate of production quickly to handle large fluctuations in demand.
Other core competencies

Strong distribution network

Wide geographical coverage

Experienced engineers and sales staff

Quick customer response and feedback

Advance Strategic Marketing

Page 20

Marketing Plan & Strategy Development for Cement Industry

In Pakistan

2014

. Attock Cement
History
Product
Bestway Cement

History

Product

Mission

vision

D.G.K.Cement

History

Product

Fauji Cement

History

Product

Advance Strategic Marketing

Page 21