MARKET SEGMENT

Segment Life Cycle

Market / Product Segment Intro Growth Maturity Decline

Recipe Mix
Plain Mix
Salt
Institution
Export

Shan Foods can easily pin point which segments to attack. The spice sector is expected to
have tremendous growth for future years. Two key segments are falling in growth stage
which means even now lot of investment can be made to take the upcoming market of
these segments.

The Salt and Institutions are yet on its introductory stage, though Shan foods have started
catering to these markets but still lot more efforts are required as figure shows this
segment is expected to have lot of growth.

Even after so many years the segment like recipe mix spices is at its growth stage because
THERE IS NO as such strong substitute for this segment

SHAN’S PORTFOLIO LIFE CYCLE

Shan’s Portfolio life Cycle
Market / Product Segment Intro Growth Maturity Decline

Recipe Mix
Plain Mix
Salt
Institution
Export

Shan foods is in growth stage in three segments i.e Recipe Mix, Institution and Exports
which suggest the growth possibilities for shan and giving an edge to Shan by earning
more share than its competitors.

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The industry is in introductory stage in Export segment while as we know shan has
international presence and it is in growth phase so shan can further expand its presence
and can make good return by focusing on exports.
Companies & Competitors Market Share of Branded Spices

Company Market Share

2006 2007 2008 2009 % Growth
Shan 1.2 1.68 2.352 3.3 40%
National 1.2 1.5 2.5 3.2 40%
Chef’s 0.45 0.63 0.882 1.2348 15%
other 0.15 0.21 0.294 0.4116 5%

The table describes the market share possessed by Shan Foods and its competitors. Shan
Foods and National Foods are almost occupying the similar share in Volumes as well as
in % but the growth of Shan Foods is Showing the steady increase while the National
foods is Showing fluctuations in its market growth.

Shan Outlet Coverage and Market Reach

Shan Outlet Coverage

Outlets A B C D Total

Total Outlets 407 3020 30205 147344 180976

Shan Outlets 360 2765 23995 22880 50000
Outlet Coverage 89% 92% 80% 16% 28%
Outlets Contribution 0.22% 1.67% 16.70% 81.40%

Shan outlets coverage in A, B and C class outlets is excellent, where they really need to
work hard are the D class outlet where there outlet coverage is less than 20%. These are
basically the rural areas where people do not really know about branded items they just
rely on loose spices.

Shan Market Reach

Retail
2004 Market Reach Volume
Sales

Shan Foods 3.3 billion

Industry 8 billion

Outlet Coverage Market Reach

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 Shan Benchmark Shan Benchmark
28% 47% 42% 56%
INTERNAL ANALYSIS

SWOT ANALYSIS SHAN FOODS

Strengths :
• Shan food has a very strong heritage and legacy behind it which has given it a
strong goodwill in households.
• Shan foods enjoys an approximately 50% market share in the recipes mixes
category.
• Shan foods is a leading exporter of food items from Pakistan providing it an
opportunity to tap the large global market which helps it to expand at a rapid pace.
• Shan has a wide range of products and SKU’s available consolidating its presence
in various niches and keeping its customers loyal to the brand.

Weaknesses :
• Shan is not present in Jams and marmalades, Ketchups categories like National
foods thereby loosing an opportunity market. Many loyal Shan customers
purchase National products in these categories which is causing loss of potential
sales.
• Shan has a low market share outside Karachi in the Punjab market where National
enjoys market leadership. This is due to weak distribution of Shan products in
Punjab market which is causing loss of potential sales.

Opportunities :

• Shan can vertically integrate to produce its own raw materials which will not only
reduce costs but will also provide it more control over the quality of input.

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• Shan currently has a very low advertising spend in the FMCG industry. It can
deploy brand activations and other innovative campaigns to switch customers
from the loose/ unbranded segment to Shan products.
• Shan can also horizontally expand its scope like national foods and enter the other
related food categories where it can tap its loyal customers with minimal extra
efforts.

Threats:
• The biggest threat to Shan is the high inflation in Pakistan coupled by a global
recession which is putting pressure on the profits and sales.
• The prevalence of counterfeit products is also threat to Shan causing loss in
goodwill and potential sales.
• The emergence of newer brand with deep pockets can also damage Shan’s
market share due to heavy advertisement while keeping the product quality
close to that of Shan.