CHAPTER ONE INTRODUCTION 1.1 Background of the Study The economy of Nepal is predominately an agricultural one. More than 90% of the economically active people are depended on agriculture for their livelihood. Low productivity of this sector is one of the reasons for Nepal and on the other hand it is one on the least developed countries in the world. The prospects, for overall economic development will be brighter only in the present structure of the economy with predominant dependence on traditional agricultural, can be gradually transformed through the process of industrialization. Industrial development can play a highly meaningful role in replacing unemployment and substitutions and imports through increasing domestic productions and improving in the balance of payment situation in favor of the country. We Know, Nepal is one of the landlocked-country having mixed economy. It is recognizing as the one having full of natural resources and beauties. But it may lack behind in terms of economic development and proper utilization of resources comparison to its neighbors China and India. Nepal has many natural resources like: water, minerals and forest. But due to the lack of fund and technology these resources has been idle. Nepal requires the investment to be increased for the maximum utilization of its potential resources. The manufacturing as well as non-manufacturing industries are needed for the economic development of the country. Here non-manufacturing company refers to the service oriented industry like tourism industry, banking and insurance, education, communication service, hotels etc. Manufacturing includes all those who are engaged in producing the goods. Manufacturing industries not only help the nation in utilizing its unused resources but also it helps in increasing the GDP as well as increases the job opportunities. Therefore, increase in people’s income ultimately leads to the increase in saving. This helps to increase the investment. Therefore, manufacturing industries acts as a catalyst for the development of the economy and trade. Manufacturing industries has main functions of producing goods or the products. But only producing is not all in all. Different aspects plays vital role for the success. One is marketing or the marketing strategies of a particular firm. Page | 1
A strategy is a long-term plan to achieve certain objectives. A marketing strategy is therefore a marketing plan designed to achieve marketing objectives. For example, marketing objective may relate to becoming the market leader by delighting customers. The strategic plan therefore is the detailed planning involving marketing research, and then developing a market mix to delight customers. Every organization needs to have clear marketing objectives, and the major route to achieving organizational goals will depend on the strategy. Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. Commonly marketing strategies are developed as multiyear plans, with a tactical plan detailing specific actions to be accomplished in the current year. Time horizons cover by the marketing plan; vary by company, by industry, and by nation, however, time horizons are becoming shorter as the speed of change in the environment increases. Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. Marketing strategies involves careful scanning of the internal and external environments which are summarized in a SWOT analysis. Internal environmental factors include the marketing mix, plus performance analysis and strategic constraints. External environmental factors include customer analysis, competition analysis, target market analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success. A key component of the marketing strategy is often to keep marketing in the line with a company’s overarching mission statement. Once a through an environmental scan is complete, a strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the optimal Marketing mix to attain these goals, and detail implementation. A final step in developing a marketing strategy is to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan. So marketing occupied the significant space to the overall improvement of any firm as well as for the profitability of the firm. There are many companies especially those in the consumer package goods (CPG) market that adopt the theory of running their business centered on consumer shopper & retailer needs. Their marketing departments spend quality time looking for “Growth Opportunities” in their categories by identifying relevant insights (both mindsets and Page | 2
behaviors) on their target consumers shoppers and retail partners. These Growth Opportunities emerge from changes in market trends, segment dynamics changing and also internal brand or operational business challenges. Real-life marketing primarily revolves around the application of a great deal of common sense, dealing with a limited number of factors in an environment of imperfect information and limited resources complicated by uncertainty and tight time scales. Use of classical marketing techniques in these circumstances is inevitably partial and uneven. Thus, for example many new products will emerge from irrational processes and the rational development process may be used (if at all) to screen out the worst non-runners. The design of the advertising and the packaging will be the output of the creative minds employed: which management will then screen often by ‘gut-reaction’ to ensure that it is reasonable. For most of their time, marketing managers use intuition and experience to analyze and handle the complex and unique being faced; without easy reference to theory. This will be ‘flying by the seat of the pants’ or the ‘gut-reaction’ where the overall strategy coupled with the knowledge of the customer which has been absorbed at most by a process of osmosis, will determine the quality of the marketing employed. This almost instinctive management is what is sometimes called coarse marketing; to distinguish it from the refined aesthetically pleasing form favored by the theorists.
1.2 Statement of Problem These days, we can see that various manufacturing companies are in the state of break down. This is due to absence of proper marketing policies. This is not only reduces the sales but also reduces the firm’s profit. Profit is the life blood of the organization, which means without profit a firm cannot run for long time. Therefore, a firm should deeply consider while making marketing strategies. Marketing helps in creating awareness among the customers, or any other interest group. Therefore, marketing strategies of the concern food industry is the main issue of the study. This research has specially focused on whether the firm is spending much of its resources and time on marketing of the produces or not.
1.3 Objective of Study The main objective of this study is to give an insight about the marketing policies or strategies of Khajurico food industry. Page | 3
The specific objectives of this study are as follows: a. To find out the promotional policies of Khajurico food and industry. b. To analyze the distribution policies of Khajurico food industry. c. To see the market policies of Khajurico food and industry. d. To suggest appropriate recommendation.
1.4 Importance of Study The marketing concepts of building an organization around the profitable satisfaction of customer needs has helped firms to achieve success in high-growth, moderately competitive market. However, to be successful in markets in which economic growth has leveled and in which there exist many competitors who follow the marketing concept, a well-developed marketing strategy is required. This study will be helpful to all the manufacturing firms, consumer, retailer etc. in the following senses: a. The study of distribution, promotional policies and the market trend would provide the information to the management of the firm that will help to take corrective action in the field of marketing. b. The distributor (new) would get the information about the criteria of the firm for the distribution of the product. c. The entire consumer can know the types of products produced by Khajurico food and industry and the area of its availability.
1.5Limitation of Study The study will have some limitations. Basically the study is done for the partial fulfillment for the award of the degree of Bachelor in Business Administration. Times constraints, financial problems, lack of research experience will be the primary limitation and secondary limitation: a. The study will be centered only to Khajurico food industry. b. It doesn’t include other aspect like management, finance, human resource management. c. The truth of the research result is based upon the available data from the primary source. Page | 4
d. The market study is only focused inside the Kathmandu valley.
1.6 Organization of Study This study will have five main chapters: Chapter one: It includes background of the study, statement of the problem, objective of the study, importance of the study, and limitation of the study and organizational of the study. Chapter two: Second chapter will deal with review of literature. It includes the review of books, journals, previous theories, history of food industry, and profit of the organization.
Chapter Four: Data presentation, analysis and interpretation of data will be included in fourth chapter.
Chapter five: And finally, the finding, conclusion and bibliography will be included in chapter five.
CHAPTER TWO REVIEW OF LITERATURE
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2.1 HISTORY OF FOOD INDUSTRY As it exists today, the domestic food and beverage industry is a very competitive and mature industry with little growth. Increase in a company’s market share usually come at the expense of a competitor’s loss of market share (cannibalization). Overall most growth comes from international expansion. With the passage of NAFTA and GATT, many domestic companies are either entering into alliances with foreign entities, or acquiring them. There are many reasons for this. For example, much domestic food and beverage companies want to take advantage of existing distribution systems or underutilized plant capacity. Some acquisitions may be motivated by Federal income tax considerations. From the time that agriculture began about 7,000 years ago to the present there have been many important developments that are responsible for the state of the industry as it is today. The following events have had a major impact on where the industry is today.
Event IRRIGATION INDUSTRIAL REVOLUTION FOOD PRESERVATIVES
PACKAGING
Explanation The use of some form of irrigation is well documented throughout the history of civilization. It has enables food production to occur in areas previously too hostile for plants and to counter the effects of drought. Resulted in mass production of food products at lower cost and consistent characteristics. Classified into two main groups, antioxidants that delay or prevent deterioration of foods by oxidative materials and antimicrobial agents that inhibit the growth of spoilage and pathogenic microorganisms in food.
Tinned products came to America in 1822 and allowed food to be stored for long periods of time. Some packaging processes were developed to enable Napoleon's armies to carry war to distant areas and remain well fed.
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PASTEURIZATION
TRANSPORTATION PESTICIDES
NUTRITION
A partial sterilization accomplished by raising milt to a temperature high enough to destroy pathogenic bacteria. This process allows milk to remain consumable for about 14 days if refrigerated in closed containers. First, railroads and barges, then trucks and air transportation have enabled many food products to be enjoyed in regions where food cannto be grown. Many locally grown food products can be consumed globally (bananas, fish, fruit etc). Enabled farmers to significantly increase yield. In the 1950's and forward, nutrition became a major concern for production/consumption. The emphasis on eating healthy has spawned a new market segments; for example organic foods, low-fat foods, and healthy foods all enjoy healthy margins and increased demand.
All of the aforementioned technological developments have played a major role in the evolution of the food and beverage industry. There have also been some business developments that have had an impact on the current state of the industry.
Evet explanation Of Khajuri Product Event
Explanation
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Many food manufacturers participate in the future markets by entering into futures contracts to "hedge" against price fluctuations for their inventories of raw materials.
FUTURE MARKETS
GOVERNMENT AGENCIES
PRODUCT BRANDING
FRANCHISING
MERGES AND ACQUISITIONS
OSHA and FDA, have had a dramatic effect on the meat and food processing plants. They have helped ensure safety in production and consumption. Branding of products is accomplished by extensive advertising, in many instances this product advertising costs more than the cost of production. Branding is partially responsible for the emergence of radio and television (soap operas). In the 1950's and 1960's. The concept of franchised restaurants was promoted. This enabled franchisers to expand with limited capital investment. In the 1980's there were many mergers and acquisitions of food and beverage companies. This trend continues today. Many companies are actively buying and selling brands like baseball teams trade players.
Source: Field Survey, 2015
History of Food ISP Date 1984-1986 1986 1987-1992
Event Conducted study of food industry, 55 cases in 7 regions included in the program study. Food industry approved for inclusion in ISP Coordinated issue papers and appeals settlement guidelines developed.
Source: Field Survey, 2015
At present there are various food industries in Nepal. Some of them are listed below with their respective address.
2.2 Profile Of Khajurico Food Industry 2.2.1 General Introduction
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Khajurico Nepal was established in 1990 as a family owned cottage industry with a brand name of Khajuri foods. This company was registered as a private limited company under the cottage and small industry act of the Government of Nepal. Khajuri Foods has started with single product, baked bread (pauroti). Khajuri Foods had been expanded in 1994 with diversified products, cookies and puff pastry. The brand name of Khajuri Foods has been changed in 2003 from Khajuri Foods to Khajurico Nepal. In- house capabilities, strong horizontal integration, and the ability to take decision in short periods of time, we can change our strategy, modify production layout and process buy new technology if necessary for the new production process, and go for product diversification in a matter of days. Khajurico Nepal have an unique labor force because all production workers are women. It shows that Khajurico believes on women empowerment for the development of sustainable economic development of the country. Khajurico have three departments: Production, Marketing and Administration and Finance. Khajurico Nepal has continuously/ frequently taking technical and managerial expert services/ consultancies from national and international experts for the improvement of industry and to upgrade the knowledge and skills of the work force in all aspects relating to development of the industry as well as improvement of the quality of life of its worker. Khajurico Nepal is situated at Champapur (Chapagaun), Lalitpur District, about 10 kilometers south of Kathmandu, a capital city of Nepal. The factory building is constructed on the foothills of Mhabharat Range in a picturesque landscape having round the year pleasant environment, pollution free and panoramic Himalayan Views.
Source:
Field
Survey,
2015
Pastry 1. Puffino Special Mini pastry (Only of Out Side valley) Page | 9
2. Puffino Regular Grand (Only for Inside Valley) 3. Puffino Premium Grand (Both inside and outside valley) 4. Puffino Premium Mini (Both Inside and outside valley)
2.2.2 History of Khajurico food industry The history begins when the Khajurico Nepal Pvt Ltd started of its bakery business in 1990. It was first a small bake house run by own family members who got their start by supplying baked goods to their neighborhood market. After a years of hard work and passion for our products and consumers are driven by a history of growth that begin in 1994 and then after the company was registered under the trademark of KHAJURICO. Since then the company started its production like breads, pastries and cookies under the brand name of KHAJURICO. It took no time to gain a popularity of its brand name in the market and which today is a leading brand in Nepal. The company is facilitated with the state –of –the –art machinery and advanced quality facilities. The primary competitive advantages are the customers centric approach, most competitive prices, hygienically processed products, effective packaging solution, strict quality control process, upgraded manufacturing facility, and expert team of professionals. The company is empowered with the advance processing, quality testing, packaging, warehousing and allied facilities to meet the requirements of customers in most suitable way. Quality production is the back bone for any organization. Khajurico Nepal strives to maintain highest food grade standards. It undertakes stringent quality measures throughout the production process so as to ascertain faultless perfect finished products. The quality controller keeps a close vigil on all the activities starting from procurement of raw material up to the final dispatch of consignments. Today, Khajurico serves customers all over in Nepal. The company is yet constantly expanding its distribution and product offering to better serve the needs and opportunities that our competitive market place offers and demands. Recently, Company has opened its new factory in India in the name of Khajurico India Pvt Ltd. The company has also started its export to countries like Australia, Tibet, Ghana etc.
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2.2.3 The firm’s Vision To become a leading world class baking food products manufacturing industry of Nepal.
2.2.4 The firm’s Mission To produce and market bakery products by developing the value of our brands, we have committed ourselves to be: Highly productive and people oriented. Innovative, competitive and dedicated to satisfying our customers and consumers. A national leader in the baking industry with a long term vision.
2.2.5 The firm’s Strategy To accomplish its mission, Khajurico Nepal has launched a long-term, mid-term and short-term strategy for the year 2007 - 2011, based on its experiences gained in the first 15 years of its establishment, which are: To achieve excellence in manufacturing of baking food products; To provide strong support and opportunity to enhance the performance of employees through skill development and professional trainings. To uplift the quality of life of employees based in performance To conduct periodical market research in the field of customer satisfaction regarding quality, test and price of the Khajurico products, competitor’s strength and weakness and market trends etc. 2.3 Marketing Plan The information for this article was derived from many sources, including Michael Porter’s book Competitive Advantage and the works of Philip Kotler. Concepts addressed include ‘generic’ strategies for pricing, distribution, promotion, advertising and, market segmentation. Factors such as market penetration, market share, profit margins, budgets, financial analysis, capital investment, government actions, demographic changes, emerging technology and cultural trends are also addressed. There are two major components to your marketing strategy: Page | 11
How your enterprise will address the competitive marketplace. How you will implement and support your day to day operations. In today’s very competitive marketplace a strategy that insures a consistent approach to offering your product or service in a way that will outsell the competition is critical. However, in concert with defining the marketing strategy you must also have a welldefined methodology for the day to day process of implementing it. It is of little value to have a strategy if you lack either the resources or the expertise to implement it. In process of creating a marketing strategy you must consider many factors. Of those many factors, some are more important than others. Because each strategy must address some unique considerations, it is not reasonable to identify ‘every’ important factor at a generic level. However, many are common to all marketing strategies. Some of the more critical are described below: You begin the creation of your strategy by deciding what the overall objective of your enterprise should be. In general this falls into one of our four categories: If the market is very attractive and your enterprise is one of the strongest in the industry you will want to invest your best resources in support of your offering. If the market is very attractive but your enterprise is one of the weaker ones in the industry you must concentrate on strengthening the enterprise, using your offering as a stepping stone toward this objective. If the market is not especially attractive, but your enterprise is one of the strongest in the industry then an effective marketing and sales effort for your offering will be good for generating near term profits. If the market is not especially attractive and your enterprise is one of the weaker ones in the industry you should promote this offering only if it supports a more profitable part of your business (for instance, if this segment completes a product line range) or if it absorbs some of the overhead costs of a more profitable segment. Otherwise, you should determine the most cost effective way to divest your enterprise of this offering. Having selected the direction most be beneficial for the overall interests of the enterprise, the next step is to choose a strategy for the offering that will be most effective in the market. This means choosing one of the following ‘generic’ strategies (first described by Michael Porter in his work, Competitive Advantage).
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A COST LEADERSHIP STRATEGY is based on the concept that you can produce and market a good quality product or service at a lower cost than your competitors. These low costs should translate to profit margins that are higher than the industry average. Some of the conditions that should exist to support a cost leadership strategy include an on-going availability of operating capital, good process engineering skills, and close management of labor, products designed for ease of manufacturing and low cost distribution. A DIFFERENTIATION STRATEGY is one of creating a product or service that is perceived as being unique “throughout the industry”. The emphasis can be on brand image, proprietary technology, special features, superior service, a strong distributor network or other aspects that might be specific to your industry. This uniqueness should also translate to profit margins that are higher than the industry average. In addition, some of the conditions that should exist to support a differentiation strategy include strong marketing abilities, effective product engineering, creative personnel, the ability to perform basic research and a good reputation. A FOCUS STRATEGY may be the most sophisticated of the generic strategies, in that it is a more ‘intense’ form of either the cost leadership or differentiation strategy. It is designed to address a “focused” segment of the marketplace, product form or cost management process and is usually employed when it isn’t appropriate to attempt an ‘across the board’ application of cost leadership or differentiation. It is based on the concept of serving a particular target in such an exceptional manner, those others cannot compete. Usually this means addressing a substantially smaller market segment than others in the industry, but because of minimal competition, profit margins can be very high.
Pricing Having defined the overall offering objective and selecting the generic strategy you must then decide on a variety of closely related operational strategies. One of these is how you will price the offering. A pricing strategy is mostly influenced by your requirement for net income and your objectives for long term market control. There are three basic strategies you can consider.
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A SKIMMING STRATEGY If your offering has enough differentiation to justify a high price and you desire quick cash and have minimal desires for significant market penetration and control, then you set your prices very high. A MARKET PENETRATION STRATEGY If near term income is not so critical and rapid market penetration for eventual market control is desired, then you set your prices very low. A COMPARABLE PRICING STRATEGY If you are not the market leader in your industry then the leaders will most likely have created a ‘price expectation’ in the minds of the marketplace. In this case you can price your offering comparably to those of your competitors.
Promotion To sell an offering you must effectively promote and advertise it. There are two basic promotion strategies, PUSH and PULL. The PUSH STRATEGY maximizes the use of all available channels of distribution to “push” the offering into the marketplace. This usually requires generous discounts to achieve the objective of giving the channels incentive to promote the offering, thus minimizing your need for advertising. The PULL STRATEGY requires direct interfere with the end user of the offering. Use of channels of distribution is minimized during the first stages of promotion and a major commitment to advertising is required. The objective is to “pull” the prospects into the various channel outlets creating a demand the channels cannot ignore. There are many strategies for advertising an offering. Some of these include: Product Comparison advertising: In a market where your offering is one of several providing similar capabilities, if you’re offering stacks up well when comparing features then a product comparison ad can be beneficial.
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Product Benefit advertising: When you want to promote your offering without comparison to competitors, the product benefits ad is the correct approach. This is especially beneficial when you have introduced a new approach to solving a user need and comparison to the old approaches is in appropriate. Product Family advertising: If your offering is part of a group or family of offerings that can be benefit to the consumer as a set, then the product family as can be of benefit. Corporate advertising: When you have a variety of offering and your audience is fairly broad, it is often beneficial to promote your enterprise identity rather than a specific offering.
Distribution You must also select the distribution method(s) you will use to get the offering into the hands of the customer. These include: On-premise Sales involves the sale of your offering using a field sales organization that visits the prospect’s facilities to make the sale. Direct Sales involves the sale of your offering using a direct, in-house sales organization that does all selling through the internet, telephone or mail order contact. Wholesale Sales involves the sale of your offering using intermediaries or “middle-men” to distribute your product or service to the retailers. Self-service Retail Sales involves the sale of your offering using self-service retail methods of distribution. Full-service Retail Sales involves the sale of your offering through a full service retail distribution channel. Of-course, making a decision about pricing, promotion and distribution is heavily influenced by some key factors in the industry and marketplace. These factors should be analyzed initially to create the strategy and then regularly monitored for changes. If any of them change substantially the strategy should be reevaluated.
The Environment
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Environmental factors positively or negatively impact the industry and the market growth potential of your product/service. Factors to consider include: Government actions – Government actions (current or under consideration) can support or detract from your strategy. Consider subsidies, safety, efficacy and operational regulations, licensing requirements, materials access restrictions and price controls. Demographic changes – Anticipated demographic changes may support or negatively impact the growth potential of your industry and market. This includes factors such as education, age, income and geographic location. Emerging technology – Technological changes that are occurring may or may not favor the actions of your enterprise. Cultural trends – Cultural changes such as fashion trends and life style trends may or may not support your offering’s penetration of the market.
The Prospect It is essential to understand the market segment(s) as defined by the prospect characteristics you have selected as the target for your offering. Factors to consider include: The potential for the market penetration involves whether you are selling to past customers or new prospect, how aware the prospects are of what you are offering, competition, growth rate of the industry and demographics. The prospects willingness to pay higher price because you’re offering provides a better solution to their problem. The amount of time it will take the prospect to make a purchase decision is affected by the prospects confidence in your offering, the number and quality of competitive offerings, the number of people involved in the decision, the urgency of the need of your offering and the risk involved in making the purchase decision. The prospect’s willingness to pay for product value is determined by their knowledge of competitive pricing, their ability to pay and their need for characteristics such as a quality, durability, reliability, ease of use, uniformity and dependability. Likelihood of adoption by the prospect is based on the criticality of the prospect’s need, their attitude about change, the significance of the benefits, barriers that exist to incorporating the offering into daily usage and the credibility of the offering. Page | 16
The Product/Service You should be thoroughly familiar with the factors that establish product/service as strong contenders in the marketplace. Factors to consider include: Whether some or all of the technology for the offering is proprietary to the enterprise. The benefits the prospect will derive from use of the offering. The extent to which the offering is differentiated from the competition. The extent to which common introduction problems can be avoided such as lack of adherence to industry standards, unavailability of materials, poor quality control, regulatory problems and the inability to explain the benefits of the offering to the prospect. The potential for the obsolescence as affected by the enterprise’s commitment to product development, the product’s proximity to physical limits, the ongoing potential for product improvements, the ability of the enterprise to react to technological change and the likelihood of substitute solutions to the prospect’s needs. Impact on customer’s business as measured by costs of trying out your offering, how quickly the customer can realize a return from their investment in your offering, how disruptive the introduction of your offering is to the customer’s operations and the costs to switch to your offering. The complexity of your offering as measured by the existence of standard interfaces, difficulty of installation number of options, requirement for support devices, training and technical support and the requirement for complementary product interface.
The Competition It is essential to know who the competition is and to understand their strengths and weaknesses. Factors to consider include: Each of your competitor’s experience, staying power, market position, strength, predictability and freedom to abandon the market must be evaluated.
Your Enterprise
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An honest appraisal of the strength of your enterprise is a critical factor in the development of your strategy. Factors to consider include: Enterprise capacity to be leader in low-cost production considering cost control infrastructure, cost of materials, economies of scale, management resources with offering requirements. The enterprise’s ability to construct entry barriers to competition such as the creation of high switching costs, gaining substantial benefit from economies of scale, exclusive access to or clogging of distribution channels and the ability to clearly differentiate your offering from the competition. The enterprise’s ability to sustain its market position is determined by the potential for competitive imitation to inflation, ability to maintain high prices, the potential for product obsolescence and the ‘learning curve’ faced by the prospect. The prominence of the enterprise. The competence of the management team. The adequacy of the enterprise’s infrastructure in terms of organization, recruiting capabilities, employee benefit programs, customer support facilities and logistical capabilities. The freedom of the enterprise to make critical business decisions without undue influence from distributors, suppliers, unions, creditors, investors and other outside influences. Freedom from having to deal with legal problems.
Development A review of the strength and viability of the product/service development program will heavily influence the direction of your strategy. Factors to consider include: The strength of the development manager including experience with personnel management, current and new technologies, complex projects and the equipment and tools used by the development personnel. Personnel who understand the relevant technologies and are able to perform the tasks necessary to meet the development objectives. Adequacy and appropriateness of the development tools and equipment. The necessary funding to achieve the development objectives.
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Production You should review your enterprise’s production organization with respect to their ability to cost effectively produce product/services. The following factors are considered: The strength of production manager including experience with personnel management, current and new technologies, complex projects and the equipment and tools used by the manufacturing personnel. Economies of scale allowing the sharing of operations, sharing of production and the potential for vertical integration. Technology and production experience. The necessary production personnel skill level and/or the enterprise’s ability to hire or train qualified personnel. The ability of the enterprise to limit suppliers bargaining power. The ability of the enterprise to control the quality of raw materials and production.
Marketing/Sales The marketing and sales organization is analyzed for its strengths and current activities. Factors to consider include: Experience of Marketing/Sales manager including contacts in the industry (prospects, distribution channels, media), familiarity with advertising and promotion, personal selling capabilities, general management skills and a history of profit and loss responsibilities. The ability to generate good publicity as measured by past successes, contact in the press, quality of promotional literature and market education capabilities. Sales promotion techniques such as trade allowances, special pricing and contests. The effectiveness of your distribution channels as measured by history of relations, the extent of channel utilization, financial stability, reputation, access to prospects and familiarity with your offering. Advertising capabilities including media relationships, advertising budget, past experience, how easily the offering can be advertised and commitment to advertising. Sales capabilities including availability of personnel, quality of personnel. Location of sales outlets, ability to generate sales leads, relationship with distributors, ability to demonstrate the benefits of the offering and necessary sales support capabilities. Page | 19
The appropriateness of the pricing of your offering as it relates to competition, price sensitivity of the prospect, prospect’s familiarity with the offering and the current market life cycle stage.
Customer Services The strength of the customer service function has a strong influence on long term market success. Factors to consider include: Experience of the customer service manager in the areas of similar offerings and customers, quality control, technical support, product documentation, sales and marketing. The availability of technical support to service your offering after it is purchased. One or more factors that causes your customer support to stand out as unique in the eyes of the customer. Accessibility of service outlets for the customers. The reputation of the enterprise for customer service.
Conclusion After defining your strategy you must use the information you have gathered to determine whether this strategy will achieve the objective of making your enterprise competitive in the marketplace. One of the most important assessments is described below:
Cost To Enter Market This is an analysis of the factors that will influence your costs to achieve significant market penetration. Factors to consider include: Your marketing strength. Access to low cost materials and effective production. The experience of your enterprise.
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The complexity of introduction problems such as lack of adherence to industry standards, unavailability of materials, poor quality control, regulatory problems and the inability to explain the benefits of the offering to the prospect. The effectiveness of the enterprise infrastructure in terms of organization, recruiting capabilities, employee benefit programs, customer support facilities and logistical capabilities. Distribution effectiveness as measured by history of relations, the extent of channel utilization, financial stability, reputation, access to prospects and familiarity with your offering.
CHAPTER THREE RESEARCH METHODOLOGY
Research methodology is a process of arriving to the solution of problem through planned and systematic dealing with the collection analysis and interpretation of the fact and figures. Research methodology refers to the various sequential steps adopted by a Page | 21
researcher in studying a problem with certain objectives in view (Kothari: 1997:19). It tries to make clear view of method and process adopted in the entire aspect of the study. It is known as a path from which we can systematically solve the research problems. Research methodology is the way to solve the research problem systematically. It facilitates the research work and provides reliability and validity. To find out the market trend, promotional policies, distribution policies of Khajurico Nepal pvt Ltd and existing position of different brand cookies in Kathmandu, Patan, Bhaktapur. The following mentioned methodology has been adopted.
3.1 Research Design The study is designed as exploratory in nature. In this two types of consumer’s samples attitude have been evaluated. Hence for this only questionnaire data are used. All the attitude data for cookies in Kathmandu are collected on the basis of non-distinguished and structured questionnaire technique.
3.4 Sampling The target population of this study is very large. It is almost impossible to include the whole population in the study. So, out of these population only 100 consumers, and 300 outlets have been taken from different urban areas, and the method used for this study is judgmental sampling. The logic behind using judgmental sampling is that population under study is very large, time and resource constraints have compelled the researcher to adopt judgmental sampling method.
3.5 Data Collection Procedure For the purpose of collecting data from consumers one set of structured questionnaires were developed. The questionnaires were almost carefully designed to support all the objective of this research and subjective and objective closed and opened question were included in questionnaires.
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3.6 Data Processing and Analysis Techniques The entire questionnaire were distributed and collected by the researcher. So there was not any delay in collection of the questionnaires distributed to the consumer. Every questionnaire was thoroughly checked after the collection of the questionnaires distributed. All the questionnaires were found correct in the style of filling. All the analysis is made on the basis of the data as presented in the master table data is analyzed both descriptively with the help of fact and figures.
CHAPTER FOUR DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Market Trend
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Nepal is a country with 22 million populations and according to its geographical structure Nepal has been divided into 75 district regions. Also so far Khajurico Nepal has been able to supply its products to major cities and district region and yet working on it to expand its market in upcoming years.
4.2 Distribution Policy Khajurico Nepal has its own distribution channel. Within Kathmandu valley it has already 24 distributors appointed. After that, distributors have to provide this product to the final consumer through wholesaler and retailer. For appointment distributor it required bank guarantee or cash guarantee so that company distribute product in by standing safe site. Without bearing any risk company dispatch product to its distributors. In case of Bank Guarantee Company will provide only 15 days credit periods, for cash payment to inside valley and 30 days for outside valley. For final distribution of the product to their consumer company provides redistribution expenses to the distributor outside valley and provides van inside valley. Company have its own area sales officer to visit their distributor for their order placement, market visit and payment schedule as well as claim settlement and damage returned. All the product of the company sales only through distributor. So that company is directly contacted with only distributor not wholesaler or retailer. Distributors are not authorized to sale any competitor product or same like our product. For example: biscuit, cookies, puff etc. Distributors are given their area by the company, so that they cannot sell product outside given area. If found doing so, in that case company can dismiss the distributor.
4.3 Marketing Policy a. Distributor shall promote vigorously and effectively the sale of the company. A product through all channels of distribution prevailing in the territory, in efforts to sell company’s established marketing policies and programs.
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b. Distributor will use its best efforts to sell company’s products to reputable and financially sound traders or parties providing satisfactory consumer service throughout the territory. c. Distributor is authorized to enter into written agreements within the traders relating to the purchase, resale and service of companies products within the territory but on formats approved by company for this purpose. d. In order to provide service and ensure intensive distribution of the company’s products, the distributor agrees to provide and maintain certain infrastructure relating to vehicles, godown space, number of staff including cycle sales man etc. The detail of such requirement will be mutually agreed and communicated separately and may be revised periodically, keeping in view of the market needs. e. Distributor will be entitled to receive support under the distributor support program, which the company announces from time to time. The details of such support will be discussed and communicated periodically. The company reserves the right to announce such program as per the needs of the area of the distribution. f. Distributors will be provided R.D facility at the time of new launching.
4.4 Promotional Policies a. The company will co-operate with distributor and its retailers in providing for continuous and effective advertising and promotion of companies products throughout the territory. b. The distributor agrees to participate in, actively promote and faithfully comply with the terms and conditions of such cooperative advertising programs as company may establish and offer to the distributor from time to time. c. Nothing herein shall prevent distributor from independently advertise and marketing the company’s products with territory, provided the form and content of the advertisement or marketing materials are approved by company in advance. d. Company is involving in many promotional camps in many areas, like stall in mela, display campaign. e. Company is promoting its product by advertisement in Television and F.M station. f. Company basically believes on mouth to mouth advertisement or we can say direct door to door sampling for the taste of the product. Page | 25
g. Company has already established its image for the quality of the product and the taste of the product so that company needs not many advertisements. According to the field visit different raw data are collected and now some of those data are shown with help of pie charts and bar graphs. These facts are collected through the samples and may not represent the same in case of population.
Figure no: 1 Percentage of People who knows about Khajurico Products 70 60 50 40 Aware 30 20
60 40
10 0
Male
Female
Source: Field Survey, 2015 According to the bar diagram, more number of females are aware or have heard about khajurico products. Out of 100 percentage only 40 percentage of male has heard about khajurico products and 60 percentage out of 100 are female; who are more aware anout khajurico products. Figure no: 2
Consuming Age
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above 40; 10%
30-40; 20%
below 20; 40% below 20 20-30 30-40 above 40
20-30; 30%
Source: Field Survey, 2015 The above pie chart which shows the consuming age of khajuri product has explained below the table of consuming age.
Table no: 2 Showing Consuming Age Gender Male Female Source: Field Survey, 2015
Percentage 40 60
According to pie chart, a person whose age is below 20 consumes 40 percentage of Khajurico products. Most of them are children’s. People whose age groups are from 2030 consume 30 percentage of Khajurico products. Older the people lesser the consumption of Khajurico products is found from the collected data. People whose age groups are from 30-40 consumes 20 percentages of Khajurico products and people above 40 consume just 10 percentage of Khajurico products. Page | 27
Figure no: 3
Product Lines
10%
30%
Cookies Puffino Biscuits
60%
Source: Field Survey, 2015 The above pie chart which shows the product line of khajuri product has explained below the table of consuming age.
Table no: 3 Showing Product Line Product Lines
Percentage
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Cookies
30
Puffino
60
Biscuits
10
Source: Field Survey, 2015 According to the collected data which is presented in pie chart, Puffino is more popular than any other products of Khajurico industry. Around 60 percentages of people consumes puffino then any other products of Khajurico. Another popular product among people of Khajurico is cookies. Around 30 percentages of people consumes cookies. The least popular product of Khajurico industry is biscuits. According to the collected data only 10 percentages of people loves Khajurico biscuits.
Figure no: 4
Consumption Per Day 70 60 50 40 30 20 10 0
Consumption
Source: Field Survey, 2015
Table no: 4 Table Showing Consumption Consumption level
Percentage Page | 29
1 Packet 1-5 Packets 5-10 Packets Above 10 Packets Source: Field Survey, 2015
60 25 12 3
From the bar graph shown above, percentage of people who consumes 1 packet of Khajurico product at a time is 60. Large numbers of people are found satisfied from the single packet of Khajurico product form the collected data. 25 percentages of people consumes 1-5 packets at a time whereas 5-10 packets of Khajurico products are consumed by 12 percentages of people at a time. Above 10 packets are consumed by a very less percentage of people, which is just 3 percentage.
Figure no: 5
Expenses 70 60 50 40 Expenses
30 20 10 0
Rs 0-20
Rs 20-30
Rs 30-40
Rs 40-50
Above 50
Source: Field Survey, 2015
Table no: 5 Table Showing Expenses
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Expenses
Percentage
Rs 0-20
5
Rs 20-30
10
Rs 30-40
20
Rs 40-50
60
Above 50
5
Source: Field Survey, 2015 From the table and bar graph, we came to know that a Khajurico product which price is around Rs. 40-50 is more popular among its consumers. Products from price Rs. 40-50 is sold in higher quantity then other products.
Figure no: 6
Consumption Purpose
12%
15%
10%
Breakfast Lunch
3%
Parties Get together Gifts
60%
Source: Field Survey, 2015 Table no: 6 Table Showing Consumption Purpose Page | 31
Consumption Purpose Breakfast Lunch Parties Get-together Gifts Source: Field Survey, 2015
Percentage 15 60 3 10 12
Khajurico products are mainly consumed or used for launch. From the collected data from various sources we came to know that 60 percentage of people from various age groups consumes Khajurico products at lunch.
Figure no: 7
Buying Outlet
Groceries
General stores Teashop Groceries
Teashop
General stores
Departmental store
Source: Field Survey, 2015 7.1. Table Showing Buying Outlet
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Outlets
Percentage
General store
65
Teashop
3
Groceries
32
Departmental store
0
Source: Field Survey, 2015
Most of the people buy Khajurico cookies from general stores. According to the pie chart and our collected data from various sources, 65 percentage of people buy khajurico cookies from general stores. Groceries are the second place people buy khajurico cookies. About 32 percentage buy cookies from groceries. Least percentage of people who buys khajurico cookies from teashop is 3.
Figure no: 8
Role of Advertisement 80 70 60 50 40 30 20 10 0
Strongly Agree
Agree
Disagree
Strongly Disagree
Source: Field Survey, 2015 Figure no: 8 Page | 33
Table Showing Buying Decision Buying decision influence Percentage by advertisement Strongly Agree Agree Disagree Strongly Disagree Source: Field Survey, 2015
25 70 5 0
Percentage of people who agree that advertisement plays an important role in buying decision is 70. According recent collected data, we came to know that advertisement plays vital role for the popularity of products.
Chapter Five Page | 34
Finding And Conclusion
This study is basically concerned with the marketing policies of Khajurico food and industry pvt. Ltd. This is the last chapter which presents the findings and conclusion of the project. It includes the findings and conclusion of the study.
5.1 Findings and Conclusion Retailer’s Feedback Most of the retailers were cooperative enough to provide us the necessary information. Some of the retailers seemed quite curious to know about the Khajurico’s new product. But most of them were not happy with the distribution of the Khajurico’s products specially in Kirtipur where except few retailers everyone complained. Among the products of Khajurico, puff seems to be popupar one both with customers and retailers. Awareness
Brand awareness is very high; everyone is familiar with the khajurico products. Puffs are available and known by almost every customers as well as retailers. Premium cookies with five flavors were known by few. Most of the retailers did not have any idea or any kind of information on this new product of Khajurico. New advertisement aired by the company were viewed by only few retailers, consumers seem to be clueless. A new scheme which is provided by the company i.e. of returning the cartoons and saving the extra charge is unknown. And where the scheme has been applied, retailers are not being able to understand the full advantage of the scheme.
Problems Page | 35
Irregular supply. Cookies packaging is transparent due to which inner cookies is seen from outside, Customers can see if a cookie is broken or mislead. Vehicles transportation unavailable for distributors. Irregular distribution, Supervision over market is weak. Target customers are not reached as per the vision. Traditional type of selling is still in the market. Proper brand outlet for direct selling is missing. Customer survey and feedback research should be conducted for the betterment of the industry. Attitude of the distributer with the retailers and their irresponsibility in providing the full information regarding any new scheme and new products.
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