Marketing Project
PESTAL, SWOT, Product, Price, place, packaging, promotions, features of a product, benefits of a product, six Sigma are included in the report.
1. Introduction
1.1 Aim of Study
My aim for this specific course is to gain greater knowledge in marketing. It can help us identify the ways to promote our businesses in the market in more effective ways. Not only that it will give us the encouragement to start our own business and promote it in our own way in the future.
1.2 Introduction to Business Chosen
Secure Packaging’s is a small business, operating in the secondary sector of the economy. The business is located in the Federal’B Industrial Area, Karachi, Pakistan. The business is a sole trader organization, owned and managed by Mohammad Sibtain. The business has an unlimited liability. It basically manufactures packaging for industries located in the same vicinity and for the manufacturers of liquid products and detergents. Different sorts of packaging’s are also exported to countries like Australia and India while it is also supplied in different cities of Pakistan. Different sorts of Packaging’s include plastic packaging, corrugated Carton boxes, foiled Packaging and bag pack packaging. The report outlines the basic Marketing, pricing, positioning and other strategies and analyses.
Secure packaging’s own 09 machineries, 1 delivery van and a work force of 22 workers. Office staff contains 12 fully trained employs in which 6 of them are at the top of the hierarchy. The company produces 2000 packaging’s at the most per day and has a turnover of PKR39,00,000 per month and a profit of PKR18,00,000 per year. The business plans to be the leading packaging manufacturers in Pakistan and diversify its product range to other types of packaging in the next 6-8 years.
2 Macro Environment of Business
Secure Packaging, a Business manufacturing corrugated carton boxes in the secondary sector of the economy. The Business is a sole Trader Business with unlimited Liability. We manufacture Packaging’s for Juice, Milk, Detergent Companies and Companies which export goods. The Business may have External Factors. External Factors are factors which affect the business and its environment externally. Some external Factors are listed below.
2.1 Political Factors:
- Political Stability e.g. Stable political conditions are required in a country to keep the business moving. Sudden death of Benazir Bhutto brutally hit the transportation system in the country and thus many businesses suffered loss.
- The local political party activists are bribed on weekly basis to avoid hindrances in the production process
- Inflation after the election has sky rocketed
2.2 Economic Factors:
- Monetary Policies e.g. The Pakistani govt. decided to cover its internal expenses by printing notes this resulted in money injection and thus gave rise to Inflation.
- Fiscal Policies e.g. the decision of increasing tax rates such as GST (govt. sales tax) may result in the cost of production of a company and this may result in less profits.
- Demand & Supply side Policies e.g. Supply should always be enough to meet demand. Supply more than the demand may result in “GLUT” and supply less than the demand may result in a “SHORTAGE”.
- Minimum Wage Rate e.g. the govt. of Pakistan increased the minimum wage rate from Rs.3000/= to Rs.6000/= per labor in the budget designed for 2008. This may cause an increase in expenses and thus may affect profits of a company.
2.3 Legal Factors:
- Wastage e.g. a business may suffer problems with its production wastages if it does not dispose them in a proper manner. Disposing wastage at a wrong place may create problems for other businesses working in that environment.
- Location e.g. If the business is located in a residential area then it may face legal problems for creating noise pollution, spoiling the environment and disturbing the residents around.
- Quality e.g. Quality of a product should be the best and flawless. Week or cheap packaging may result in the damage of the product. A Customer can sue the business if the packaging is not hygienic like in the case of juices.
2.4 Social Cultural Factors:
- The attitudes, values and beliefs
- Norms e.g. The trend and culture have to be seen before producing a good. Images on carton boxes must not offend consumers or the morale values of consumers.
- Demographic trends of a given geographical area. e.g. early marriages affect demand for goods . (Cartons required for house shifting increase)
2.5 Technological Factors:
- Introduction of new technology e.g. A govt. may force businesses to adapt to new technology. A business may not afford to update itself with the new technology due to financial constraints or it may not bear the training costs.
- Climate e.g. Heavy rains or thunderstorms may result in the destruction of communication between customer and the business.
2.6 Power of suppliers
Suppliers are also essential for the success of a business. Suppliers do have power. This power comes from:
• If they are the only supplier of paper which is used to manufacture corrugated carton boxes or one of few suppliers who supply to the market.
• If it is costly for us (Secure Packaging’s) to move from one supplier to another (known also as switching cost)
• If there is no other Supplier catering to the market then we are bound to pay any price the supplier demands.
2.7 Power of Customers
Buyers or customers they can exert influence and control over our business (Secure Packaging’s) in certain circumstances. This happens when:
• The substitutes which be found easily, we can only hold the customers if we satisfy them and obtain their brand loyalty.
• Customers are sensitive to price, change in price may affect demand.
• Switching to a different Product may be costly but we may obtain consumers response and thus Purchasing power of buyers may increase like in the case of our Water Proof Boxes, which was a unique product and was bought by most of the export companies to avoid damage of goods.
2.8 Threat of substitutes
There may be alternative range of goods that customers can receive apart from the competitors known as substitutes that offer the same satisfaction for the same or less price? The threat of substitute is high when:
• Price of a substitute good falls e.g. if tetra pack reduces its prices then we may lose our customers and this may result in tetra pack having a greater market share.
• It is easy for consumers to switch from one substitute to another, Consumers are said to be the king. We have to provide them with great service and make them satisfied. Any strategy by the producer of the substitute good may prove fatal for us.
2.9 Competitive Rivalry
A starting point to analyzing the market is to look at competitive rivalry. If entry to a particular region’s market for Carton boxes is easy then competitive rivalry will likely to be high. If it is easy for customers to move to substitutes, due to any reason then again rivalry will be high.
Generally competitive rivalry will be high if:
• There is a huge competition between the Packaging manufacturers in particular regions.
Secure Packaging’s is facing huge competitive rivalry with Tetra pack and Brick Pak especially in Karachi. There is no way to increase our market share because if use we pricing strategies or carry out a promotional campaign they are ahead of us in all aspects and may rule us out of the market.
• If competitors are approximately of the same or more knowledge.
All the competitors in the field of packaging have same or more knowledge of the market e.g. knowledge about consumers likes and dislikes and promotional campaigns etc.
• If the competitors all have similar strategies.
Competitors if having similar strategies like pricing strategies may increase competitive rivalry.
2.10 Threat of new entrant
The threat of a new firm entering the market is high and a multi-national; firm like tetra pack and brik pack can easily capture the share of the market and rule out other small businesses i.e. entry barriers are low.
We (Secure Packaging’s) will look at how loyal customers are, how quickly they can achieve economy of scales, would they have access to suppliers, would government legislation prevent them or encourage them to enter the industry.
3Microenvironment of Business
Introduction
Positioning Strategies
After selecting our target markets, the next stage is to decide how our business is positioning itself. Certain specific strategies need to be concerned if we want our business to reach the heights of top notch marketing. In the packaging business we need to decide the quantity and quality of strategies that are needed to run the business more efficiently and gain the upper hand over our competitors
For this business, positioning would be what the customer believes about packaging, its features, and benefits. It is a comparison to the other available alternatives offered by the different competitors in the market. Pricing, promotion, differentiation and advertising would be considered to maximize the positioning strategy.
Generally, there are five basic strategies for positioning:
By Attribute or benefit: This is the most frequently used positioning strategy. For Secure Packaging’s the provision of exact packaging is required according to the demand of the consumer. Some customers prefer tailor made packaging’s and some buy ready made packaging as they are cheap but they may not meet customers requirements at times. Secure Packaging’s first analyses the demand of the consumers before manufacturing their order.
By Use or Application: the customers are provided with personalized services when they approach Secure Packaging’s for their order. The samples for the order are manufactured first before the final order is manufactured. If samples are rejected the company manufacturers the samples for its consumers until the consumer is satisfied.
By User: As Secure Packaging’s is located among its competitors so they attract most of the consumers by their unique pricing strategies and services. The company is situated at a prime location and attracts most of the companies who require packagings.
By Product or Service Class: the consumers are never misguided at Secure Packaging’s and in order to satisfy the consumers, that the product they are buying is reliable Secure Packaging’s provides a free function test where the packaging’s are thrown from a height of 400 feet to see they don’t burst and the goods inside the packaging remain safe.
By Competitor price or Quality: As Secure Packaging’s have a lot of Direct Competitors within the industry so its difficult to capture the whole market but Secure Packaging’s leads in the industry because of their low prices and high quality. The main fact is Secure Packaging’s does not have fixed prices, it charges the consumers according to their affordability and budget.
Positioning is what the customer believes and not what the provider wants them to believe. Therefore, these Positioning strategies may change due to the counter measures taken at the time of competition.
Positioning Strategy Applicable
Brand Strategy: This is applicable to Secure Packaging’s
What is a brand? Is it a logo? A name or slogan? A graphic design or color scheme?
Secure Packaging’s brand is the entire experience its customers have with the company. It’s
what it stands for, a promise they make of quality service, and the personality they convey. And while it includes their logo, color palette and slogan, those are only creative elements that convey their brand. Instead, their brand lives in every day-to-day interaction they have with the market, it may also include
&& The images they convey
&& The messages they deliver on your website, proposals and sales materials
&& The way their employees interact with customers
&& A customer’s opinion of Secure Packaging’s versus their competition
Branding is crucial for products and services sold in huge consumer markets. It’s also important because it will help Secure Packaging’s stand out from their competition. It brings its competitive position and value Proposition to life. Secure Packaging’s brand consistently and repeatedly tells its prospects and customers why they should buy from them. It enables the sense of security that Secure Packaging’s provide with the brand name. A strong brand name may help increase market share and attract more customers to the company.
3.1 Product
3.1.1 Product Offered
| S.NO | PRODUCT/ SERVICE | FEATURES | BENEFITS |
| 01 | Foiled Packaging |
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| 02 | Carton boxes |
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| 03 | Semi-Finished Carton Paper. |
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The Width and depth of the products offered by Secure packaging’s is labeled in a diagram at the end of the section in Appendix A
3.1.2 Branding and Image
The following tools for developing the business image have been analyzed according to palmistry’s service features, target market and competition:
Business name:
The business name Secure Packaging’s indicates that the packaging provided would keep the customers satisfied and along with the packaging’s secure packagings provides feeling of security that the packaged goods would be secured from damages.
Types of Advertising:
Advertisement signs would be the major tool for advertisement. The purpose would be to make the good prominent. The company would place advertisements on billboards so the consumers would get aware of the existing product in the market. Secure Packaging’s would also advertise on television showing demonstration of the good and how safe and secure it is. The company would also run promotion campaigns and advertise in newspapers so that export companies would order us. Secure Packaging’s advertisement slogan “No one can beat our prices” may attract customers as the good is quite cheap as compared to the goods of local compititors.
Advertising Signs:
The advertisement sign was created with the aim of making the product clear to the people. For this reason, a pair of foiled packaging, clearly indicating its usage along with “SECURE PACKAGING”s’ written besides it. The style of writing and image placing depicts an abstract of the security of good.
Location:
The location would not have much of an influence on the business’s image. With the competitors placed in the same location, the only way to create a unique image on the time of product would be to present it in a unique way. Like offering it cheaper than the competitors and producing samples before preparing the final order.
The mentioned tools are however, utilized to almost the same capacity by the competitors. The advertisement signs, types of advertisement and location have a lot in common for every business which is functioning besides “SECURE PACKAGING”s’. For this reason, the focus would be more towards the following tools:
Presentation:
The good should be presented in such a way that the consumer is convinced to buy the product. The features should be the benefits of the product and the customer should be persuaded to buy the product i.e. verbal persuasive advertising. Quality of the good should be explained first before cost and bargaining is done.
Attitude and Behavior towards Customers:
As buying packagings in bulk quantity is a risk for other organizations so we would facilitate the customers by preparing samples first before the final order is manufactured. This would help the consumer get an idea about the quality, size and design of the packaging, as final order with out samples may be risky as a little change in size may result in huge financial loss and the packaging’s has to be wasted as huge order cannot be compensated by Secure Packaging’s.
General Stationary:
The business name would be present on all material such as hand-outs. This may help in making others become aware of the business and its efficiency. The bills, receipts and all stationeries including pen and pencils would have the business name printed on them so that every consumer eye focuses on the business name.
3.1.3 Production process
The products manufactured by Secure Packagings go through a 5 way process. First the raw paper is prepared in a two layer form and stapled in a machine, then the layered paper is inserted in a machine where it is molded in square share, the sides are folded and moved to a machine where the unrequited ends are cut and thrashed. The fourth machinery helps in pressing the cartons and glue is applied to the corners to stick the ends and the finalizing step is when printing is done on the cartons. The last step is computerized and printing is done with the help of CAD (Computer aided design) software’s.
3.2 Price
Pricing Strategies that are currently used by SECURE PACKAGING’s
Premium Pricing.
Use a high price where there is a uniqueness about the product or service. This approach is used where a a substantial competitive advantage exists.
Penetration Pricing.
The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased
We basically use several pricing strategies that include penetration pricing and premium pricing, penetration pricing was used to enter the highly competitive market which had multi-national companies like Tetra-Pak and Brick-Pak, so we had to reduce the prices to the minimum level and enter the market. For the first 2 years we had to make a huge loss in order to survive in the market. Premium pricing is used because our newest invention was water proof packaging (Metal-Layer Packaging) which provided resistance to water. This innovation was brought by us and we charged high prices for the uniqueness of the product as we had no competitors for this particular service.
As the business has price leadership qualities, it has easily penetrated the market and is making huge profits. The business produces packaging on mass level with very little costs. As the business is the only packaging manufacturer in Kwinana industrial area, so huge demand tend to have huge profits associated with them. Secure packaging plans to open up retail outlets in the rest of Australia and diversify the business and produce new sorts of packaging’s.
3.3 Placement
Channel if distribution:
Secure Packaging’s does not deal with the consumers directly. The goods are manufactured for businesses that require corrugated carton packaging. The packaging’s are either sold to the wholesalers with a 3% commission or the business acquires them directly from secure Packaging’s. We donot take orders directly from consumers.
3.4 Promotion
3.4.1 Advertising
| Medium of Advertising | Quantity | Time Period | Distribution | Cost per unit | Total Cost
PKR |
| Pamphlets | 10,00,000 | One month |
|
0.10 | 100,000 |
| Brochures | 10,00,000 | One month |
|
0.15 | 150,000 |
| Television advertising | 6 | One month |
|
100,000 | 600,000 |
| Internet advertising on other websites | 5 | One year | 3999 | 19995 | |
| Website | 1 | One year | 15000 | 15000 | |
| Total amount of capital invested in marketing goods/services | 884995 |
Pamphlets and Brochures are distributed in all the organizations which require our packaging or are currently using the packaging’s of our competitors.
The products of Secure packaging’s are advertised on channels which are news based or entertainment as they gather the attention of most of the audience
Websites used for advertisements are mainly job search websites or social websites like www.facebook.com. People around the world visit these websites so secure packaging’s gain international exposure from these website
Secure packaging’s own website is fully functional and includes all the cost details and information regarding the organization. Interested people can also place order on the website. People who know about secure packagings from any medium of advertisements are redirected to its own website i.e. www.securepackagings.com.pk
3.4.2 Since the business is operating from last 35 years, the publicity and public relations has been developed during the time of operation. Secure Packaging’s is aware of the existing competition regarding its product range, which is why plans have been made concerning the target market and the relationship with it.
The publicity and public relations would be developed for the following reasons:
Promoting the service.
To gain public understanding and acceptance of the quality we provide with the cheapest prices in the market.
Identifying the interests of the target market.
However, keeping the budget in mind, only two methods would be used:
Word of mouth communication with the target market. Secure Packaging’s advertises on television, in newspapers and on the internet so basically it is targeting the whole world as the advertisements are seen round the globe. Secondly their agents and field managers would also promote the products by going to their respective target customers and verbally advertising the goods. These agents are first trained and given the information about the product and its price.
The customers of Secure Packaging’s are provided with a catalogue which consists of samples and qualities of paper which is used along with their product range.
Secure Packaging’s believes that these methods would be sufficient to build a positive image for the business.
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| Secure Packaging’s would provide samples to their regular customers so they would know about our new product. They would also advertise in trade magazines and on television. |
4 Analysis
4.1 SWOT Analysis
SWOT Analysis, is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.
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Strengths.
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Weaknesses.
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Opportunities.
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Threats.
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Recommended Strategies from TOWS Matrix
• Secure Packaging is a very competitive organization. Mohammad Sibtain (Founder and CEO) said Secure Packaging has a healthy dislike of its competitors.
• Secure Packaging has only one factory with as low as 14 workers working in it. It does not tie up cash in buildings and manufacturing workers and that’s why we have strong liquidity position.
• Secure Packaging is a nationally recognized brand. It is one of the top Packaging brand in Pakistan. Its famous “Water Proof Boxes” are instantly recognizable.
• Secure Packaging has dealership with the Ismail dadabhoy group of companies, this means Secure Packaging can also generate income by supplying raw materials to its competitors apart from manufacturing packaging’s.
• The organization does not have a diversified range of packaging products. However, the income of the business is still heavily dependent upon its destroyer pricing strategy. This may leave it vulnerable if for any reason heavy competitors like tetra pack capture the local market.
• Secure Packaging does not have any retail outlet where our packaging’s apart from corporate sector could be sold to local people. This has made our target audience limited thus a competitor may increase its market share if he opens a retail outlet in the local market.
• Rising oil prices have made transportation of finished goods more expensive, inflation caused by oil prices and other factors have made managing of costs more difficult.
• Secure Packaging has the lowest cost of production in the market because it has dealership with the Ismail dadabhoy group of companies, this means cheap raw material and thus the goods could be manufactured at the lowest cost.
• There is also the opportunity to develop products such as Water proof Boxes, Heat Boxes and thermopile boxes. Such high value items do tend to have associated with them, high profits.
• Secure Packaging faces fierce competition with multi-national firms like Tetra packaging and Brick pack. These multinational firms seem to be cost efficient and may role small firms out of the market. To survive in the market the companies have to diversify its product range in order to increase competition.
• The model of Water proof carton boxes was unique and one of the best-selling product of the company. Competitors are developing alternative brands to take away Secure Packaging’s market share.
• As discussed in the weaknesses above the rising oil prices have also cut down production because the machineries we use also require oil and its components if oil prices keep on rising then we might have to replace our machineries and this means huge investment. Thus we have to withdraw from the market for some time.
- Secure Packaging’s should enter new markets like SITE where a huge chunk of Industries and businesses of Karachi are situated
- Secure Packaging’s could establish their outlets in places where its competitor’s does not exist or they can move on to a place where there are no competitors at all
- Due to an increase in the prices of paper, Secure Packaging’s could cut down on paper items and specialize on the rest like metal core cartons
- Secure packagings should give out free samples to give an idea to the people about the quality from the rest of its competitors
| S.NO | PACKAGINGS | DELIVERIES | Designing | Extra’s | Services |
| 01 | Single-line Packaging’s | Fast delivery | Printing | Raw carton Paper | Phone orders |
| 02 | Double-line Packaging’s | Scheduled delivery | Logo designing | Semi-Finished carton paper | Mail order i.e. e-mail, fax or postal order |
| 03 | Foiled Packaging’s | Normal delivery* | Embossing | Semi finished Foiled paper | Refunds* |
| 04 | Ready made Packaging’s | Self Collection | Engraving | Imported finishing paper | Customer Feedback |
APPENDIX A
WIDTH (PRODUCT/SERVICE LINES)
DEPTH
NOTE:
*Defected packaging’s are refunded with new ones. Either the customer is given his money back or is replaced with the new packaging.
*Only normal deliveries are free of charge, for other types of deliveries extra charges may apply
APPENDIX B
1 Comment
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