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PROJECT REPORT
NATIONAL FOOD LIMITED

SIIR: MUNTAZIR MEHDI

IQRA UNIVERSITY
STRATEGIC MANAGEMENT
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“National Foods project Report”

Submitted by
Ahmed Raheem: 19242

Mubashir Tariq: 35408

Saqib Younis: 30146
Sidra: 27252
Promila Palmer: 31223

A Project Report
Submitted in Strategic Management
Submitted to Sir Muntazir Mehdi
Master of Business Administration
Iqra University
Main campus, Karachi
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 III

Contents
“National Foods project Report”..................................................................................................................I
.................................................................................................................................................................... II
MISSION AND VISION:...........................................................................................................................1
CORE VALUES..............................................................................................................................................1
Passion:...................................................................................................................................................1
People-Centric:........................................................................................................................................1
Customer-Focus:......................................................................................................................................1
Leadership:..............................................................................................................................................1
Teanwork:................................................................................................................................................1
Ethics:......................................................................................................................................................2
Excellence in execution:..........................................................................................................................2
Accountibility:..........................................................................................................................................2
CORE COMPETENCIES:.................................................................................................................................2
PORTER 5 FORCES...................................................................................................................................2
SWOT Analysis:..........................................................................................................................................4
Strengths:.................................................................................................................................................4
Weaknesses:............................................................................................................................................5
Opportunities:..........................................................................................................................................5
Threats:...................................................................................................................................................5
EXTERNAL FACTOR ANALYSIS (EFE MATRIX):...............................................................................6
INTERNAL FACTOR ANALYSIS (IFE MATRIX):.................................................................................7
TWOS MATRIX:........................................................................................................................................9
TWOS EVALUATION FOR NATIONAL FOODS:............................................................................10
COMPETITIVE PROFILE MATRIX (CPM)...........................................................................................10
FORMULATION STRATEGY.....................................................................................................................11
CONCLUSION.....................................................................................................................................11
SPACE MATRIX......................................................................................................................................12
CONCLUSION....................................................................................................................................16
THE SALES PLANNING PROCESS.......................................................................................................18
 IV

Ketchup.................................................................................................................................................19
Salt.........................................................................................................................................................19
Three product annual growth Results...................................................................................................19
INTERVIEW.............................................................................................................................................25
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MISSION AND VISION:

PKR.50 Billion Turnover of the Company by the year 2020 with expanding in domestic and International

markets; in the segment of convenience food through every level of excellent management that gives our

customers better lifestyle and value. To compete as an innovative team promoting the idea of biodiversity

and sustainable development of food and business systems reinforced by sound public practice.

CORE VALUES

Passion:
The organization performs with focused broadminded strength and challenge own self always.

People-Centric:
The company put their employees crucial. And give on the way to their progress.

Customer-Focus:
The organization is customer’s-vision oriented. And taking measure in all the classifications of

quality.

Leadership:
The organization explains about having positive influence on everyone they stick to the part in

being problem solvers.

Teanwork:
The organization has a “We vs I” code where for everyone in organization to win they attempt to

even “go an extra mile”.

Ethics:
The ethical or human values are very important for the company to operate and continue.
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Excellence in execution:
The company says they have a priority of practical results than verbal promises to be the best.

Accountibility:
The company take full responsibility of its activities and outcomes. They stand strong and

scrutinize and exact their mistakes.

CORE COMPETENCIES:
1. The company has multiple categories of its brands in food industry.Global Multi

Category Food company

2. The company supports to refine the well-being of the society where it strongly focuses on

quality food products and CSR activities.

3. “Success Factor” a new technique for eliminating its weaknesses. Which is software

launched by the company in April 2016 to set the goals by checking the performance of

its employees

PORTER 5 FORCES
BRANDED FOOD INDUSTRY
 
SCALE: 1-> WEEK ;3-> MODERATE; 5-> STRONGEST
 
ENTRY BARRIERS
 
SCALE = 4 (STRONG)
 
REASON
Regulatory Requirement
Equipments and Space requirement
Factory need to be established in cleaned environment
Product License required from PSQCA
Chamber of commerce
Internal & External Audits
 
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BARGAINING POWER OF BUYER
 
SCALE = 5 (STRONGEST)
 
REASON
FMCG product
Zero Switching cost
Competition available in all range of product
 
BARGAINING POWER OF SUPPLIER
 
SCALE= 3 (MODERATE)
 
REASON
Switching cost of both parties is high especialy with packaging supplies
Seasonal crops which needed to be bought and sold within specified time to prevent
decrease in quality
 
COMPETITION
 
SCALE= 5 (STRONGEST)
 
REASON
Competition in all product range, in spice & pickles Shan, in ketchup Shangrila, in dessert-
Rafhan etc
 
AVAILIBILITY OF SUBSTITUTES
 
SCALE= 4 (STRONG)
 
REASON
Trend towards dine outs and cooked foods
 

SWOT Analysis:
Strengths:
1. Innovation:

National foods apply new and better ideas and methods for the customers.
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2. Product Line:

The company has strong product line for its customers where it is convenient to purchase

products that they are familiar with.

3. Brand Market:

The company has its Brand in food industry representing what it offers and awareness of quality

product.

4. Manufacturing Competencies:

The company has working and industrial competencies made on a base of representing the skills

and potential vital for successful performance.

5. Improved Research and Development:

This globally spreading company is capable of such a vision because of its enhancement and trust

on the research and developments.

6. Marketing Approach:

The company is very strong in R&D and as well as in marketing of products with the latest trends

in occasions.

7. Organizational Structure:

National Foods has appropriate and well structured organization through the empowerment of

employees.

8. Financial Management:

National Foods say that today they have acquisitions in Canada and UK. Where since they had

their Vision 2020 they have managed their finances so well.

9. Far reaching coverage of the market

10. Specialization in production

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Weaknesses:
For the Vision 2020, which was, $50 Billion worth-company by 2020. The company has been performing

at its maximum capabilities where it went to some acquisitions as well, with giving no room for

weaknesses.

Opportunities:
1. Entering more related businesses:

Beverage industry is an opportunity where when they already have a product of powdered fruit

juices.

2. Expanding their Core Business:

It is an opportunity for National Foods to expand their core business and have their own food

chains.

3. Expanding in Foreign Markets:

National Foods has an opportunity to enter in foreign markets claiming their great taste and easy

to make idea.

Threats:
1. New Entrants:

In the same food industry the new entrants are a threat for the products of National Foods.

2. No Barriers to Entry:

The food industry is not monopoly and it has no as such hurdle for the rivals of the company.

3. New cheaper substitutes:

It is a big threat for National Foods where in most of the metropolitan cities globally has cheaper

substitutes in food industry.

4. Threat of Fixed Quota:

The company has a threat on the imports because there is a fixed quota system on its imports.
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5. Dynamic Hygiene and Quality Regulations:

The quality and hygiene regulations are developing all over the world, e.g. the packing and gas to

keep the powdered spice good; is even regulated by the regulatory party.

EXTERNAL FACTOR ANALYSIS (EFE MATRIX):

External factor evaluation (EFE) matrix is very familiar strategic mechanism that has been used for the

analysis of external factor of a firm’s environment. External firm’s environment mainly based on legal,

political, Socio-economic and technological factors. A firm should modified those factors and classify

them into opportunities and threats. The opportunities are the resources or options that are accessible for

the firm to further strengthen its position in industry only if a firm used to obtain good advantage from

each offered opportunity. On the other hand, threats are examined as the negative factors for a firm which

may harm its position in an industry either financial or operational, therefore; the impact of threat could

be reduced or eliminated if a firm counters to each threat in suitable time manner. The external analysis of

national foods has been explained its opportunities and threats, the EFE matrix helps the national food to

evaluate its opportunity and threats to strengthen its position on timely manner.

KEY EXTERNAL FACTORS WEIGHT RATE WEIGHTE

S S D SCORE

OPPORTUNITIES:
1. Increasing demand of ready-to-eat and hygiene meal 0.11 4 0.44
2. National Foods Limited is the market leader with 12 percent 0.07 3 0.21

share in plain spices and 49 percent in recipe mix.

3. Engaging with its operations locally and internationally 0.10 4 0.4
4. Rural markets untapped. 0.08 3 0.24
5. Expansion of core business. 0.07 4 0.28
6. Opportunities of business synergy with A-1, NFL will leverage 0.05 3 0.15

the current distribution and cash & carry channels.

KEY EXTERNAL FACTORS WEIGHT RATE WEIGHTE

S S D SCORE

THREATS:
1. Strong competition with Shan foods 0.10 4 0.4
2. New entrants in retail industry like Habib foods and Mehran 0.08 3 0.24
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foods
3. Online sales increasing resulting tough competition in retail 0.09 3 0.27

market
4. No barriers of entry level 0.10 2 0.2
5. Change in people taste and demographics. 0.08 4 0.32
6. Heavy import duty and fixed quotas imposed by govt. on 0.06 4 0.24

machinery and goods.

TOTAL 1 3.39

INTERPRETETION:

By using EFE matrix we concluded that the NATIONAL FOODS response is outstanding to threats

shown in the table above represents the total weighted score is 3.39 respectively.

INTERNAL FACTOR ANALYSIS (IFE MATRIX):

Internal factor analysis or internal factor matrix is very well known for the strategic tool that evaluated the

firm’s internal environment factors. Internal factors are mainly based on the firm’s operational process

and the strategies use to maintain that firms functions i.e.: management, marketing, finance/accounting,

production, R&D and MIS. The firm evaluates these factors and segregates them into strengths and

weaknesses. Moreover the strengths are the positive factors that strengthen firm’s progress and its

position in an industry while the weaknesses are the negative factors that harm its position to overcome

these weaknesses the firm must take strategic action plan in timely manner to stand with strong position

in market. National foods has some strengths and weaknesses that are elaborated in table through IFE

matrix that evaluate the results either the firm using its strengths and eliminating its weaknesses properly

or not.

KEY INTERNAL FACTORS WEIGHT RATE WEIGHTE

S S D SCORE

STRENGHTS:
1. New product launched, enhance line extension low unit price 0.08 4 0.32
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SKUs to penetrate in urban and rural markets.

2. Brand awareness in international market by trail generations 0.09 3 0.27

(sampling, recipe sachets and consumer offers) and exhibitions.

3. Partnering with the consulting firm MNBEC to attain 0.06 2 0.12

operational excellence,
4. Installation of machinery and plants extension reduces 0.12 3 0.36

coverage space, double production rate and reduced power

consumptions.
5. Special promotions like, cluster market activation, twin fun 0.07 4 0.28

campaign, outdoor campaign, consumer promotions, TVCs

other discounts offering may lead to generate their sales in off

season.
6. Implementing LTP tool in SAP launched the E-PO, Double 0.06 4 0.24

Decker (Multi-floor) transportation.

KEY INTERNAL FACTORS WEIGHT RATE WEIGHTE

S S D SCORE

WEAKNESSES:
1. Lack in product diversification 0.08 2 0.16
2. Have huge investments but cannot use that in business 0.10 3 0.3

expansion.
3. Distribution channel is not working at optimal level that 0.07 4 0.28

resulting the various opportunities untapped.

4. Outsourcing of distribution channel will leads to security issues 0.09 3 0.27

and reduced in service quality

5. Trail generation activities must be used to build brand 0.07 4 0.28

awareness at rural side of the country.

6. Cost can be its weakness where its rivals are operating at less 0.11 4 0.44

cost at the same price

TOTAL 1 3.32

INTERPRETETION:
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By using internal factor evaluation matrix we concluded that NATIONAL FOODS response is

outstanding to its internal weaknesses shown in above table that represents the total weighted score of

3.32 respectively.

TWOS MATRIX:
The tows matrix is the well know strategic tool that helps to evaluate the firms best strategic options by

analyzing the variants of this tool, furthermore the SWOT factors can be studied under observations their

results provide the best alternative strategic business plan. Consider the following variants as under:

SO; strategy in which strengths used to enhance the opportunities.

WO; strategy used to reduced weaknesses by using opportunities.

ST; strategy in which strengths use to minimize the firms threats.

WT; strategy used in which the weakness reduce and avoid the threats.

TWOS EVALUATION FOR NATIONAL FOODS:

INTERNAL AND STRENGTHS WEAKNESSES

EXTERNAL FACTORS
OPPORTUNITIES SO: Product diversification WO: Outsourcing of

verse increased market share distribution channel verses

and growth forward integration

THREATS ST: Cost strategy verses WT: Operating cost verses

competition in retail market penetration of rivalries in food

market

INTERPRETETION:
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Whereas in S.O strategy NFL should avail its opportunities by using the strengths i.e. product

diversification (related and unrelated) that results the increased no of market shares in retail market. In

W.O Strategy NFL should focus on its distribution channels considering forward integration that could

be cost saving and get rid from legal security issues and reduced service quality through outsourcing

distribution channel. In S.T strategy NFL should focus on its cost differentiation strategy and reduces the

competition in retail market. In W.T strategy NFL should maintain its operating cost to reduce the market

penetration of new entrant in food market.

COMPETITIVE PROFILE MATRIX (CPM)

FORMULATION STRATEGY
COMPETITIVE PROFILE MATRIX

Critical Success Factors Weig National Foods Shan Foods Shangrila

ht
Rating Score Rating Score Ratin Scor

g e
Product Quality 0.1 4 0.4 4 0.4 4 0.4
Advertising 0.15 4 0.6 3 0.45 2 0.3
Price Competitiveness 0.15 3 0.45 3 0.45 3 0.45
Global Expansion 0.2 3 0.6 4 0.8 1 0.2
Management 0.1 4 0.4 2 0.2 2 0.2
Market Share 0.1 3 0.3 3 0.3 2 0.2
Financial Position 0.1 3 0.3 2 0.2 2 0.2
Diversification in product 0.1 2 0.2 2 0.2 2 0.2

range
1 3.25 3 2.15

The ratings values are as follows: 1 = major weakness, 2 = minor weakness, 3 = minor strength, 4

= major strength.

CONCLUSION
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Although National Foods has a head to head competition in its leading brands with leading local

champions like Shan and Shangrila but due to its strong management and being a public listed company

having diversified range of product it do have a competitive advantage and strength against them.

SPACE MATRIX
The Strategic Position and Action Evaluation (SPACE) Matrix, another important Stage 2

matching tool. Its four-quadrant framework indicates whether aggressive, conservative,

defensive, or competitive strategies are most appropriate for a given organization. The axes of

the SPACE Matrix represent two internal dimensions (financial position [FP] and competitive

position [CP]) and two external dimensions (stability position [SP] and industry position [IP]).

These four factors are perhaps the most important determinants of an organization’s overall

strategic position.

FP (Financial Position)
  Rati Remarks

ng
Return on capital employed got decreased to 42 % in 2 Moderate: 42%

last 5 years
Leverage ratio (debt: equity) of 2.3 shows significant 2  

borrowing
Liquidity ratio is 1.05 but on decreasing trend 2 Current ratio is 1.05 whereas cash

to current liabilities is (.12);

Higher .liquidity ratios (current

assets/current liabilities) show

company can conveniently pay its

debts
Working capital turnover; 64.91 times; previous years 6 WC= (CA-CL); WC TO= Net
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it was in range of 20 Sales/WC

Operating cash flow to sales ratio is inconsistent 2 Ability of company to turn sales

(fluctuation from year to year) into cash

Inventory turnover is moderate (3.4) 4 3.4 times; UPL 7 times
Earnings per share 3 9.2 Rs; UPL 580
Average Score 3  
     
CP (Competitive Position)
Market share -2 head to head competition in

different product range

Product Quality -2 FSSC certified; GFSI recognized

certification
Product Life Cycle -2 Since 1970 in spices, salts etc.
Customer Loyalty -5 Zero switching cost
Advertising -2 high
Price Competitiveness -2 Good
Global Expansion -3 Moderate as compare to Shan
Management -1 Good as its public listed company

whereas its major competitors are

private concerns
Diversification in product range; inclusion of Mayonise -1 Great, recognized as food

and diet jam + Twin fun packs company not spice or salt
Average Score -  

2.22

222
 
IP(Industry Position)
     
Growth Potential is high as they have further 6 as rural market is untapped, need

diversified their range I;e Mayonise and diet Jam to tap unbranded market with cost

effective products
Profit Potential is also significant as they are enjoying 4 Good

market leadership in different product ranges

Financial Stability 3 Moderate
Food Safety regulation throughout the world are 2  
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increasing day by day

Productivity; capacity utilization has got increased by 5 Many food process have common

inclusion of mango cut line built inhouse workings and infrastructure

Average Score 4  
     
SP (Stability Position)
     
Technological Changes; Titan; Ketchup fillng machine; -1 High; New mango cut machine,

doulbe productivity sachet filling machine in

gujranwala in response
Increasing rate of inflation and political destability of -4  

country
Demand variability -3 as commodity products normally

have stable demand

Competitive Pressure -4 Significant
Risk involved in business -3 Moderate
Ease of exit from market -4 not easy
Average Scores -  

3.16

667
     
Averages
SP -  

3.16

667
IP 4  
CP -  

2.22

222
FP 3  
     
Directional Vector Coordinates
X-Axis (CP+IP) 2  
Y-Axis -0.2  
Coordinates (2,-.  
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2)
     
     

CONCLUSION
 
A firm with major competitive advantage in a high growth industry
NATIONAL FOODS SHOULD PERSUE COMPETITIVE STRATEGY.

They should work for backward integration to control their supplies specially chili farming in

order to get their required quality chili (color, aroma & Aflatoxin level)

They can also move towards horizontal integration by working on confectionery business as they

have already entered snacks business.

On Product development side they are already working intensively.

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THE SALES PLANNING PROCESS

 16

C Y
LIM
R
T
N
O
JG
A
E
P
SB
V

Financial strategy is the most important and integral part of any firm, it determines how a

firm earns profit and how it makes the investments. This is a very confidential part of any

firm’s management strategy.

Ketchup
The target market of this category is ever growing; overall a 20% growth in sales was recorded.

We strive to improve our market share in this category year after year. In order to ensure that the

sales grow consistently ,advertisements and trade marketing activities were carried out at major

sales outlets.
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Salt
National Salt holds a special position in the product portfolio of NFL. The performance of this

essential ingredient never falls short of our expectations. A 17% growth in sales was recorded

this year. Keeping in mind its crucial contribution we continue to improve its production process

and try to optimize its costs.

Three product annual growth Results

  Ketchup
Year Bottle Sachet Pouch
2008 -8% 32% 15%
2009 -11% 35% 20%
2010 -14% 36% 18%
2011 -4% 23% 21%
2012 -11% 33% 20%
2013 -12% 21% 26%
2014 -10% 30% 20%
2015 -10% 30% 20%
2016 -8% 28% 19%
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  Salt 800gm

Year Iodized Normal

2008 10% 1%
2009 4% 1%
2010 9% 2%
2011 5% 5%
2012 8% 3%
2013 6% 6%
2014 7% 3%

Recipe
Year 100gm 50gm 25gm
2008 15% 14% 28%
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2009 12% 12% 33%

2010 16% 7% 17%
2011 10% 9% 13%
2012 15% 15% 21%
2013 9% 8% 23%
2014 11% 11% 22%
2015 9% 9% 25%
2016 11% 12% 23%

Year Sachet
2008 32%
2009 35%
2010 36%
 20

2011 23%
2012 33%
2013 21%
2014 30%
2015 38%
2016 36%
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Ketchup

40%

30%
Bottle
20% Sachet
Percentage %

Pouch
10%

0%

Years

Salt 800gm
12%

10%

8%
Percentage %

Iodized
6% Normal
4%

2%

0%
2008 2009 2010 2011 2012 2013 2014
Years
 22

35%
Reciepe
30%
25%
Percentage %

20% 100gm
50gm
15% 25gm
10%
5%
0%
2008 2009 2010 2011 2012 2013 2014
Years

Sachet
2008
14% 15% 2009
2010
10% 2011
17% 2012
2013
16%
2014
17%
11%
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INTERVIEW.
1. Question: What is the Distribution Strategy of National Foods?

We have khi , Hyd , FSD , LHR and GJR Regions , in which each Regions there are Regional

Managers .

One Order Booker have 6 Routes in each day. He is covering the 30 to 40 shops each day.

Above this there are Territory managers 5 to 7 Territory managers.

One TM has 5 to 7 Order bookers.

Above TM there are 5 to 7 Zonal mangers.

Suppose Rawalpindi is divided in to 4 zones each zone there are 5-7 zonal managers.

As the OB mark the order on his hand held PDA Computer its visible to the Distributor and the

distributor next day deliver the order on the Respective shop.

2. Question: What is the mission of National Foods?

 To deliver consistent quality to our customers using pure ingredients, authentic recipes and the

best available technology

 Dedicated to continuous improvement through active alliances with international companies to

expand technological and product horizons

 To maintain close and direct contact with our customers through consumer insights and dedicated

service

 To provide external and internal customer service by excelling in functional management

 To promote professionalism at all levels through education, training and development for all

human resources

 To deliver annually a fair return to our valued investors and shareholders in line with industry and

economy

3. Question: In order to see the willingness to buy do you test market your products?
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Yes of course. We first try to record the reaction of our existing customers by giving them free trial of

our products. If we get a positive response, only then we mass market our product.

4. Question: Do you follow a standard procedure of sales forecasting?

Yes. We have a separate department which forecast the sales revenue in accordance with the financial

data for the next year.

5. Question: Are qualitative factors more important than quantitative factors when

forecasting sales?

Both are equally important. It’s like tea without sugar for me. Objective task method is widely used in our

company when forecasting sales but first we rely on the figures to give us a clear picture of our sales

potential.

6. Question: Who is responsible for sales forecasting?

All the mangers in our sales and marketing department are responsible. We often use our sales personnel

to know about the consumer reaction patterns and the future market trends.

7. Question: How do you evaluate your sales forecast?

We usually compare it with the total forecasted sales. And I am glad to tell you that our sales forecast are

mostly accurate and differences only occur do you the uncontrollable factors in the environment.

8. Question: When gathering information, do you use primary sources or secondary sources?
 25

Primary research is the key to our market research as we specifically gather information about our

existing and potential customers. Our whole sales team efficiently gathers date by coordinating their

efforts through all levels. From the highest to the lowest level.

9. Question: Do you incorporate advanced techniques like MIS in your research?

Yes, MashAllah se we have a separate MIS department which performs its tasks very effectively.

10. Question: How many years do you take in to account when analyzing the past data?

Two to three years. Due to the rapidly changing environment we do not really rely on the previous year’s

data.

11. Question: How has the market in general evolved during this time span?

During the past three years, there haven't been major significant changes in the market. However, a few

social changes have enabled National Foods to come up with a variety of new products. Each product has

been customized to adapt to the change in consumer taste.

12. Question: How did you perform against the competitors?

Our company has a variety of SBUs (strategic business units). Therefore, it faces different competitors in

different product lines. National Masala has been the market leader for almost 5 years but other products

like Custard and Chili garlic are facing a tough competition in the competitive market.

13. Question: How have specific products, territories and accounts developed in terms of sales

profitability?
 26

National foods already has different brands in the market like Jams, ketchup, Achar, Kheer mix, Custard

powder, etc. Recently, we launched a new brand named Rivaaj, It has increased our sales by 40% and

profits by 20%

14. Question: What about your market share?

Our main focus has always been on high profitability which further leads to a high market share. I am

proud to be associated with National Foods which successfully occupies 80% market share in powder mix

market.

15. Question: How do you analyze your competitors’ future actions?

We are operating in this industry since 1970. Hence, we are aware of the different reaction patterns of

our competitors. If a competitor reduces its price by 5rupees, it won’t affect the sales of our National

Recipes. However, when introducing new products like National Rice (Guard) and kheer, we failed to

correctly analyze the competitor action and therefore faced major losses in both the product lines.

16. Question: What can be learnt from the past?

When entering in to new markets, for instance rice. National foods should emphasize on Research and

Development to a great deal in order to make continuous improvements and minimizing the risk of

failure.

17. Question: How do Macro Environment factors affect Sales Organization and Market

potential?

The demographic profile of our existing and potential customers majorly consist of single, married

working females, age 18 to 30. In Pakistan, with the increase in career opportunities for women the

demand for our National recipes has increased greatly.

 27

The economic conditions do not have much impact on the sales of our products. As we deal in products

which are less costly and can be bought on affordable prices.

Our recipes are in accordance with social and cultural norms of the society.

The GDP is showing a declining trend from the past three years as it fell from 7.1 to 1.23%. Inflation is

also at its peak, in these tough times National Recipes have successfully managed to retain its profits by

selling manufacturing its products cost effectively.

18. Question: What are your Strength, weaknesses, opportunities and threats (SWOT)?

Strengths: National Foods has a very broad product line that includes different types of Masala powders,

kheer mix, ketchup, custard powder, pastas, achars and many more.

It is dealing with more than 380 distributors which is its biggest strength as none of our competitors have

such a vast distribution channel. It also has 500 people working as the field force and all of them are

employed by National Foods.

National food possesses specific manufacturing competence for example use of imported machinery and

high quality ingredients in manufacturing of powder mix that maintain the quality of product.

Weaknesses: Our major weakness is the declining gross profits due to the increase in operating expenses.

We have not been able to increase our gross profits since the past 3 years.

Threats: Political instability and competitors in the market. Especially our unpopular products like

Custard and Kheer are facing intense competition from the new competitors entering in the market. Also,

the law and order situation

 28

Opportunities:

Straight forward, the birth rate of Pakistan at the moment is an opportunity for us. Apart from

this, the increase in literacy rate is also an opportunity for mass marketed foods. GDP can also

prove to be an opportunity- but in countries unlike Pakistan. Coming back to literacy rate, how

does that affect us? Well young lady it has a major effect on the consumption of our Masalay.

Women like you, women of today, are now career oriented. More focused towards their aim. As

a result, they need to balance their time. Women no longer have the time or energy to create

fresh Masalay. Let me give you an example, my sister in law is a masters in English Literature

from Karachi University. She can't even cook a decent fried egg. National Foods is capitalizing

on that aspect, such women will use our Masala packets because they are convenient and easy to

use.

19. Question: What are your major sales objectives?

Our sales objectives are very simple: Retaining leadership and earning profit. I can brag a lot about

customer orientation and customer value. Believe me, everyone does but the truth remains, shareholders

need profits. Leadership is a tricky business. To retain your leadership requires major sales efforts. The

leader can charge a premium whenever they like. Hence, our main objectives revolve around keeping our

shareholders happy.

20. Question: But what about key account management? Don't you manage your key accounts

in a way which generates customer loyalty?

Answer: Well, this concept of key accounts has basically evolved since Olpers came into being. We offer

big retail discounts to major retail stores. In addition to the discounts, we give them commissions. These
 29

discounts and commissions are not for the common man. We maintain separate accounts for Aghas,

Mottaz, Imtiaz, Ghaffars and all these retail stores. Imtiaz has been apportioned Rs.16 lakh from National.

In addition to these, we have adapted to these new trends of International Modern Trade (IMT). Makro,

Metro and the hyper marts are examples of such IMTs. So now what happens is, we have separated an

input/output system for all these. The decision of shelves, the placement, the share we get (primary and

secondary) are taken in accordance with the IMTs. Also, we provide a higher sales personnel for MTS

and big units. For instance, wherever there are higher sales, follow up is more. Increased sales visits and

sales calls are examples of follow ups.

21. Question: How do you coordinate your sales objectives with the sales personnel and the

other departments?

Answer: Yes this is a very big problem. Here, the finance department tries to keep lower costs of

production. The production is concerned with employee welfare. We are the sales department, our main

concern is to generate sales and attain profitability. But one thing which is good here at National Foods is

that the director controls everything himself so the coordination is very smooth. For instance, if this was

peak time for a product for which I had anticipated an amount of sales, and I was sitting in my office at 12

am, there is no doubt I would be screaming at the logistics department. But if the director is handling the

coordination with the logistics, it is a given that I won’t be yelling at my director. The sales operation

manager creates a buying based on anticipated forecasts. The HOD's get together before the end of the

month to discuss anticipated budgets for their departments. They discuss which products are profitable,

how the buying will be achieved, how customers can be attracted, how sales volume or political

instability might thrash the situation, the disturbance by the vendors.. all the issues are discussed

beforehand. Else, what will happen is at the time of execution when shortfalls or delays occur, everyone

would be placing allegation on the other.

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22. Question: How do you implement your sales objectives?

Answer: I am happy to announce to you, that by the grace of Allah, last year we had toped our budget by

2.2%. Our implementation is effective because the maximum forecast variations we have are of 8-10%.

We implement our objectives by first clearly communicating them to the sales personnel so they know

what they are striving for. Regular meetings are held for this purpose. We also provide training every year

to refresh the main concepts instilled in our personnel.

23. Question: What are your core strategies?

Answer: Our strategies include objective action plans to hold our current market position. Basically, we

strive for low cost strategies. Our products are designed for the entire market. Some of them are targeted

towards one specific group more than the other, but they are used by the entire market: men, women,

children, seniors. Hence, to be cost effective we adopt an overall cost leadership. We strive to find out

any possible way with which we can cut our cost of production. All our tactical plans or objectives are

based on this strategy.

24. Question: Which tactics do you use? Push tactics or pull tactics?

Answer: I would want to maneuver but I'm fasting and I would hate to lie. To be very frank, we use the

push tactics. It may be embarrassing for companies to admit it, but truth remains, in Pakistan most

companies use push tactics. Honestly, marketing remains on its bench but let’s say for instance that out

marketing budget is Rs.100, there are 10 people who are present to share the profits with us. We focus on

below the line activities. We set up displays to push the products to the shops and retail stores. It should

seem like the shop is ornamented with our products. Let me tell you about the failure of many firms in

Pakistan for e.g. The United Colors of Benetton. It used to rely on stock management. It failed to

understand the psyche of Pakistan. Here in Pakistan, the customers prefer to shop from loaded stores.

Stores which have abundant inventory of products. This represents variety for them. Here most of the

customers are those who are influenced by the buying decisions of others. This is known as 'word of
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mouth'. What we aim to do is basically decorate the shops with our products. Why? Just to confuse you in

your decisions. So basically, we want to push or somewhat throw our product towards the retailer. As I

mentioned earlier, we are persistent in fact diligent in our key account management efforts. However,

recently our pull strategy has gotten stronger with better recruitment practices. This gentleman who just

passed by was the marketing manager at Philips in the United States and is now working with us. Many

other such experts have joined the organization and they've been generating many innovative and positive

ideas for marketing. Hence, in recent times our marketing has gotten stronger too with Rs.2 crores

budgeted for copies and print media advertisements along with TV commercials.

25. Question: How do you communicate your tactical actions with your regional sales

managers?

Answer: We have elaborated the categories of our profitability and then communicated them to the

regional sales managers'. For instance, we have three different flavors in ketchup: regular ketchup, chili

garlic and hot and spicy. The lowest sales are for hot and spicy. The highest sales returns are also for that.

And it generates the lowest profits. So we have set a mix, established a ratio. Wherever we see

performance like this, we retreat our products. We are looking for the competitor to steal our market

share. So these strategies are communicated to the regional or zonal sales manager. In turn he stops to

push that product to the retailers. So it's a whole cycle which starts with a shift in the strategy.

26. Question: How do you implement your sales plan?

In National foods good communication with the sales force acts as a key factor to implement the sales

plan successfully. For that matter sales operation manager arranges a meeting where senior sales manager

addresses the sales force and makes them aware of the sales objectives, strategies and tactics to be used

for the implementation of the sales plan for the forthcoming period.
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27. Question: Is it implemented at all levels?

Level of coordination among all the departments is very strong in National foods. All the managers sit

together, discuss and respect each other’s views and try to create a bind that would give profitable results

in future.

28. Question: What training do you provide for implementation?

Sales people are trained to manage their time and respond to challenges competently. They are provided

with continuous support, advice, information and guidance that helps them to carry out their tasks

effectively and efficiently.

29. Question: How do you evaluate the sales plan?

In National foods evaluation of the sales plan is done on quarterly basis. It is carried out by comparing the

planned results with the actual outcome. Generally the forecasted error is more or less 10% which is

almost ignorable.

30. Question: What corrective actions do you take?

During the past few years not much deviation has been observed in actual results when compared with the

forecasted ones. However, in national foods push tactics were used at greater extent but over the last few

years pull tactics have also been strengthened to diminish the minor forecasted error. Effective daily

reporting system is also practiced in the company.