Summer

2011

THE TAPAL CASE

THE TAPAL CASE

SUBMITTED TO:
Sir Saeed ur Rehman

SUBMITTED BY:
Muhammad Danish Mujtaba 10115 Ali Ahmed -- 9857 Sameea Khan 10062 Afzal Jamal Sayed 10457 Salman Saeed 10268 Amna Reyaz -- 10402

SUBMITTED ON:
August 09, 2011
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THE TAPAL CASE

EXECUTIVE SUMMARY
Tapal tea Pvt ltd faced some problems which were detected by the regional manager North,Tapal Tea, Syed Waheed Sarwar who was under pressure by Mohammadi Miabhoy (General Manager North). The case underlines the problems faced by the company in northern region. Throughout the years 1998 till 2001, the region could not meet the sales quotas or sales were below expectations while the selling expenses were also on the rise. Thus it was required of Mr Waheed to analyze the situation and come up with suitable solutions. While analyzing the case, we detected some discrepancies in the companys operations in the northern region for instance: The territories were not adequately covered. Friction between distributors because of Territory Overlapping. Territory executives were not well qualified(majority only had a bachelors degree and limited experience) The sales reps were not performing up to standards Travel expenses were high.

Some areas had a greater market but were not being fully utilized. The long distance between different cities in a territory was another cause of rising travel expenses. Alternatives had to be devised to increase sales. The solutions to the problems we suggested are as follows: To revise the territories so that the territory needs could be better taken care of. This way even the travel expense would decrease as a proper territorial structure would be made and no extra time or expense will be put on the distance travelled. There was a problem relating the dissatisfaction of the customers that can be eliminated by training of the sales representatives so that they know how to best approach your customer and even help in finding new prospects. Some of the sales representatives who are area jumping should be replaced to eliminate such a practice as it creates confusion for the customers and they loose trust in your company. Most of the sales reps were under qualified as they did not have masters degrees. Representatives with masters degrees should be hired because they will have a better insight of the consumer an a better knowledge base will help achieve better results.

All these solutions will help in increasing the sales and will help in achieving the sales quota of the company. The sales representatives should be under strict surveillance so that no such practices should increase that will affect the sales of the company in anyway. Or put the reputation of the company in jeopardy.

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THE TAPAL CASE

TEA MARKET IN PAKISTAN
The world's passion for tea is legendary, and as it became less a drink for the rich and more a drink for the masses, the commerce of tea became big business. Tea is Pakistans most popular and cheapest beverage. The annual consumption is about 150 million kilogram, fluctuates at just less than 1kilogram per year. Today; tea is the world's second most popular drink (after water). It's easy to make, affordable and one of the fastest growing beverages (6.5% over 5 years). Pakistan became a major tea importer. It is now the worlds second largest tea importing country. Kenya is the leading supplier of Pakistans import. Illegal imports are substantial, nearly 1/3 of domestic consumption and a nearly 81 million USD business. The Pakistans tea-makers can be classified into: 1. The blended and packed segment of the market. 2. The loose tea segment. Blending, Packaging and distribution are nominated by Unilever, the worlds largest transactional corporation in the tea industry, and Tapal Limited, a very competitive local firm. Both are based in the port of Karachi. There are some other minor players. Out of recent total legal imports of 114,000,000 kilograms, 70,000,000 kilograms went to the packers, while the rest was imported by independent traders who sell loose tea in open markets. Pakistan imported US $220 million worth of tea in fiscal year 2006.

INTRODUCTION TO TAPAL TEA Pvt Ltd

Tapal has been well recognized company of Pakistan since 1947. Tapal tea is one of the major competitors for Lipton in the tea industry. Adam Ali Tapal was the founder of the Tapal Company. He bought a tea store in Jodia Bazar from a Hindu who was at then migrating to India. At that time of establishment, Mr. Adam Ali Tapal stood against the tough competition and uncertainty (such as change in government setup, quota system, tea not grown here, import restrictions etc) in the market because he saw an opportunity in the industry. The shop in Jodia Bazar existed until the 1970. The company continued to grow under the management of the founder's son, Faizullah A. Tapal. When the third generation of the Tapal family, Mr. Aftab Tapal, the current CEO joined the company. Aftab Tapal introduced professional management and unique production ideas to the business. A well trained tea taster and tea specialist himself, Aftab Tapal introduced new tea concepts and developed a wide range of tea blends catering specifically to the tastes of people throughout Pakistan. Fazullah.A.Tapal (founders grandson), took over as CEO and initiated tea distribution to retail outlets around the city for the convenience of the people. Its product range has achieved great popularity in Pakistan. Products such as Tapal danedar and family mixture are the

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top selling brands of Tapal, other brands are also gaining acceptance in the market. They spent around 1.75% of its total annual retail sales on advertising and promotion.

BRANDS OF TAPAL
The major brands of Tapal are: Tapal danedar Tapal family mixture Chenak dust Tapal mezban Tapal tezdum Tapal gulbahar tea Tapal safari Tapal green tea o Jasmine Green tea o Elaichi Green tea o Lemon Green tea Tapal ice tea (Cans and Instant tea o Peach Flavor o Lemon & Lime Tapal Instea

SALES MANAGEMENT AT TAPAL

The entire market was divided into two regions North and South which were managed independently. Each region was further divided into zones, which were then divided into territories. A territory comprises of towns. The north part had 23 territories organized into 6 zones. The south part had 17 territories organizes into 4 zones. A territory executive was assigned to each territory they provided a link between the distributors and zonal managers. They key responsibility of zonal managers was to operate the distribution network effectively in their zone. Zonal managers reported to the regional sales manager. In order to cover the field responsibilities the zonal managers worked on a monthly plan provided by the regional sales manager.

NORTHERN REGION
The primary function of a territory executive was to maximize sales in his territory by providing leadership and guidance to distributors and their sales force. To cover their territories territory

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executives were given a monthly routing and coverage plan, called the Permanent Journey Plan. The plan specified the total number of days the territory executive was supposed to spend at his headquarter (base town) and the number of days in the field. A daily activity report was prepared which covers the town visited, shops visited, merchandising activities performed, information on competitive activities, comments on distributors performance and market conditions. The selection process for the territory executive included permanent residence in, and knowledge of, the area assigned, two or three years of selling experience especially in the food industry, capacity to work hard and flexibility to travel or relocate. Hiring of territory executives was done at the regional level with final approval from the head office. A starting point for setting the sales target for a territory was the assessment of market gap. The competitors sales were evaluated by adding up all the sales. Market gap was done based on market potential and historical sales analysis. The territory executives assessed these estimates and formally communicated them to concerned territory executives. Cross area sales problem were significant in Tapal it was a major source of friction among distributors.

SALES PERFORMANCE(1998-99 TO 2000-01)

3500000 3000000 2500000 2000000 1500000 1000000 500000 0 abbotabad bahawalnagar bahawalpur bannu dera ghazi khan faislabad I faislabad II gujranwala islamabad jehlum jhang khanewal lahore I lahore II mianwali multan muzaffargarh peshawar rawalpindi I rawalpindi II sahiwal sargodha sialkot market size 2001 avrage actual sales average sales target

Axis Title

TERRITORIES

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REASONS AND SOLUTIONS
1. THE TERRITORIES WERE NOT ADEQUATELY COVERED:From the data given above we see that there is inadequate coverage the territory potentials are not being fully utilized. We also found that in some areas the market size is larger then the others and so the area was not fully utilized. And at some places the travel expense is a lot as the cities are far off in the same territory which is increasing the sales expense. So they should revise the territories so that the territory needs could be better taken care of.

2. TRAVEL EXPENSES WERE HIGH:By revising the territories the travel expense would also be decreased as a proper territorial structure would be made and no extra time or expense will be put on the distance travelled. And so the problem relating extra selling expense will be taken care off.

3. FRICTION BETWEEN DISTRIBUTORS BECAUSE OF TERRITORY OVERLAPPING:The sales representatives who are area jumping should be replaced to eliminate such a practice as it creates confusion for the customers and they loose trust in your company.

4. THE SALES REPS WERE NOT PERFORMING UP TO STANDARDS:Poor sales representatives performance, here was a problem relating the dissatisfaction of the customers that can be eliminated by training of the sales representatives so that they know how to best approach your customer and even help in finding new prospects.

5. TERRITORY EXECUTIVES WERE NOT WELL QUALIFIED:According to exhibit number 9 the results of the qualifications of the sales reps are as follows:
Number Of Territory Executives 10 6 2 1 3 1 Qualifications BA FA B.Com D.Com MA MBA

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The results indicate that most of the territory executives are not well qualified because there are only three masters whereas the rest have low qualifications therefore the company should opt for territory executives who have a masters degree.

6. POOR PERFORMANCE RATINGS FOR MAJORITY OF TERRITORY EXECUTIVES:TERRITORY Abbotabad Bahawalnagar Bahawalpur Bannu Dera Ghazi Khan Faislabad I Faislabad II Gujranwala Islamabad Jehlum Jhang Khanewal Lahore I Lahore II Mianwali Multan Muzaffargarh Peshawar Rawalpindi I Rawalpindi II Sahiwal Sargodha Sialkot TERRITORY EXECUTIVE Ch. Bashir Ahmed Rasheed Ahmed M. Ikram Ullah Ali Abbas Khan Rauf Ahmed Nadeem Yousaf H.M Ashraf Pervez Naseer M Mohsin Irfan Ahmed Haq Nawaz Bhatti Sajid Hassan Ishtiaq Ahmed Abdul Qadeer Muzaffar Niazi Nadeem Hussain Ghulam Yasin M.Ali M. Gulfraz Muzaffar Naeem Ghulam Rasool Dost Mohammad Muhammad Irfan RELEVANT EXPERIENCE 14 18 11 11 5 5 6 10 6 28 9 13 8 10 3 8 6 9 32 4 8 11 4 NUMBER OF YEARS WITH TAPAL 2 5 5 6 1 1 3 2 1 7 2 3 3 2 2 2 2 3 4 3 6 3 PERFORMANCE RATING fair Poor Poor fair fair fair Poor Poor Poor poor good good fair good poor fair poor fair good poor good fair excellent

Territory executives with fair ratings should be trained in order to get better results but if they do not improve after training then they should be replaced. There is a bit of tendency to improve here, we can train them or replace them after making them go through an evaluation and interview to check where they stand. The action should be strict in case of poor evaluation.

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MARKETING RECOMMENDATIONS FOR NORTH
Free distribution of samples in educational institutes like LUMS, IBA and CBM. Introduction of tea vending machines in the cafeteria of above institutes at a subsidized price like instead of Rs 25 it should be available for Rs 20. Outside the movie theatres they can generate a sales trial by KIOSK marketing The targeted audience was elite class they can make arrangement for supplying ice tea at places like Shapes Fitness Centre as it was a healthy drink The effective place for promotion can be either the DARVI RACE or GOLF CLUBS as they can focus to generate sale from upper high class.

CONCLUSION
As per our analysis if the above mentioned steps are taken the northern region can show a lot of growth and sales can increase at the same level as the southern region. These solutions will trigger better sales potential and will help in meeting the quotas. The sales representatives should be under strict surveillance so that no such practices should increase that will affect the sales of the company in anyway. Such action might put the company reputation in jeopardy.

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