Beruflich Dokumente
Kultur Dokumente
Submitted to
Submitted by
________________________
Assistant professor
Sir
With due respect and honor, I have much pleasure to present the report of the
internship program on “A STUDY ON MARKETING STRATEGY IN THE CONTEXT
OF ABUL KHAIR TOBACCO COMPANY LTD”. The report deals with working
environment of a field level distributor and selling strategy. I am submitting
this report as a part of my internship program in Abul Khiar Tobacco Company
Ltd. This report is going to provide valuable assistance to me in finding out the
working environment, which have influence on the service quality.
The Officers of AKTCL were very cordial and extended their hands within the
limit of their authority. As the time was limited, the report could not be done
more comprehensive and analytical. Therefore, I need your kind attention to
assess my report considering the limitations of the study. Your kind suggestion
will encourage me to perform better research work in future.
Sincerely yours,
………………………………….
I would also like to thanks Sales Representative Md. Helal and manager Mr.
Bappi as well as Md. Kamruzzaman Zone In Charge for their response toward
my query.
I am very much grateful and I do thanks to Md. Anwar Hossain (TSO), Territory
Sales Officer, for his great response and help. Though he was very busy at his
job, he tried to teach me most of the job responsibility about how they are
selling their brands.
Place: Dhaka
……………………………………..……..
AKTCL target market is to capture whole country middle and low as well as
very low segment market. AKTCL offers quality services to its customers.
AKTCL tried to formulate its strategies in such a way that the extraction of
customer and outstanding tobacco can find a suitable platform. Nevertheless,
it is important that, to produce greater job satisfaction, service management
should render on-the-spot supervisory support to employees, design and
implement supportive supervisory practices and reward positive results. Work
climate also have significant impact on employee service quality. It’s found in
the study that employee perceptions of work climate have important effects on
their work effort & thus the quality of the service they rendered.
In this internship I was attached to different people like TMO, SR, BP TSO etc.
So I learn maximum knowledge about market. With the help of these people I
practically learn different strategies that AKTCL adopts in the marketing.
During this internship I learn theoretical knowledge in a practical form. I did my
work in field and offices both places are very informative.
• BATB – Benson & Hedges, John Player Gold Leaf, Pall Mall, STAR Filter,
Viceroy
• DTI – Castle, Navy, Sheikh White, Sheikh Full Flavor, Five Star, K2
• AKTCL – Marise, Sunmoon, Marise White, Super King white, Rally, Special Abul
Bidi
The market is almost saturated with growth and decline of segments among
themselves keeping the standards vibrancy in the industry. Cigarette though
as a commodity, has strong distribution network and commonly carried by
general outlets all over the country. It is a time tested industry with one of the
key business for all of the Group of Companies operating. The product has a
general appeal and still considered to be source of business for the traders.
The mass distribution network set by the manufacturers though however,
reduced margins at different levels of supply chain channels, yet traders did
not lose interest because of consistency in demand and supply.
Cigarette being a product common to both mass and upper class has impact of
The surprising thing about the history of tobacco in Western Society is not so
much how pervasive its presence has been, but how controversial its use has
been. By 1607 the Virginia company had landed in Jamestown with the goal of
producing tobacco profits for the English crown. Throughout the 18th century
tobacco use was encouraged. But even as a pervasive consumer good, it still
retained a "faintly immoral" reputation. Thomas Jefferson was a proponent of
its use and saw profits for government in its taxation and distribution. This
position is reminiscent of what is happening today with tobacco taxes being
used as the source of regulatory capital. With the advent of the cigarette in the
19th century, tobacco became even more widely used. The mechanization of
cigarette production, the brain child of James Buchanan Duke and his American
Tobacco Company, dropped the cost of producing a cigarette dramatically in
the decade between 1880 and 1890. In effect, "Buck" Duke, whose statue with
a cigar in hand presides proudly over the Duke campus to this day, was among
the first real "leaders" of the tobacco movement. As the Henry Ford of tobacco
production, he made the product vastly more available and affordable. In the
1920s cigarette usage spread as women turned to cigarettes for the first time
(emboldened perhaps by the passage of the 16th Amendment extending them
the right to vote). Schudson reports that cigarette consumption per capita "was
remarkably steady from 1913 to 1945, rising when the real income per capita
rose, falling when real income fell." During this period the sales of big tobacco
companies grew. During War II cigarette use was reinforced among the
military, which once again became the largest distributor of "free" cigarettes.
Most of the people of Bangladesh are illiterate. Those who are educated they
do not have much more practical and analytical knowledge to make better
prospect of their life. In this case people need to get involved to do the
productive work and getting job in the native company to improve our local
productivity.
The ultimate objective of the study is to gain real life exposure in any kind of
service sector get a clear idea about sales strategy and promoting brand.
The present study was not out of limitations. I faced some limitations at the
time of preparing this report. But as an intern it was a great opportunity for
me to know the sales activities. Some constraints are as follow;
• One of the major limitations is the shortage of time. Since the officials
had no enough time to respond toward my query but they had tried their
best to help me to provide information.
SOURCES OF DATA
(a) Sources data:
All marketing information comes either from internal sources to the firm or
from external sources during the project.
(I) Primary Data: Data originally collected for an investigation are known as
primary data. Such data are original is character and are generated in large
number of surveys by some individual institutions.
(II) Secondary Data: The data, which are collected for some earlier research
work and are applicable or useable in the study. I have presently undertaken
that the secondary data can be divided into two types. Such as –
Secondary data are obtained by visiting competition offices and is the report of
the company. Both primary and secondary sources of data were explored for
the study.
Secondary Sources:
Abul Khair Group is one of the largest and rapid growing companies in
Bangladesh. It is a family oriented business. It was established in 1953 by late
Abul Khair. The company started with Abul Bidi, still a familiar brand for those
who smoke bidis. Later on, the company expanded its business to other
sectors. It is now one of the most successful companies in terms of
professionalism and management excellence. The main business objectives are
to prove guaranteed quality, fair and competitive price and optimum services
leading to total consumer satisfaction.
The product lines of Abul Khair Group include Fast Moving Consumer Goods
(FMCG), Industrial Products and Trading. The company has its prime
manufacturing ventures in steel products, food and beverage, condensed milk,
full cream milk powder, cement, tobacco, soyabean oil, coconut oil, butter oil,
tea etc. Over 10,000 personnel are working for this renowned company
directly.
Among the several units of Abul Khair Group, milk and beverage is one of the
most vital divisions of the group. This division produces and packs condensed
milk, powder milk, several types of juice, flavored milk, drinks, snacks and
supreme quality tea. All of these products ensure supreme quality, availability
and customer satisfaction. All the products are produced under better hygienic
conditions by using sophisticated technology. Total Quality Management (TQM)
is practiced in this division (milk and beverage) and that's why the company
was awarded with the certificate of ISO and HACCP. Premium quality raw
materials are used to produce all the products. These products are distributed
under a strong distribution system. For this reason, the company has a large
number of satisfied and loyal customers with strong brand image.
“Consolidate our position in the areas where we lead and continue to invest in
people, processes and technology to enhance our organizational capability to
ensure long-term and substantial growth. Embracing change at every level to
achieve highest level of professionalism remains as the key focus for all.”
· Star Ship Full Cream Milk · Seylon Tea · Shaad Badam Bhaja
Powder
· Star Ship Soyabean Oil · Star Ship Coconut Oil · Sun Moon-Filter
Kings
STUDY
OF
THE REPORT
LEAF PRODUCTION
In Kushtia NC-95 variety is grown for long time and yield is about 500 to 550
kilo per acre. The tobacco is usually lemon to lemon orange color, thin to
medium bodied, pliable and soft nature, low to low medium nicotine and
medium sugars. The tobacco of Kushtia region is generally considered as good
quality neutral filler.
Kushtia NC-95 28 30 33 37 40
K326 13 15 17 18 20
Chittagon
SG-28 09 10 10.5 11 12
g
Total 50 55 60.5 66 72
Out of the above production about 80% to be used for local consumption and
20% will remain for export.
BURLEY
Manikgo
3.00 3.50 3.75 4.00 4.50
nj
About 90% of the production is exported and only 10% is used for domestic.
MOTIHARI
TALIM
Used in Biri.
Abul Khair is renowned for producing the finest quality of tobacco in Asia. Abul
Khair has a vast range of product to meet the needs of our existing and
potential buyers all around the world. Abul Khair’s products are widely
exported in many countries of the eastern and western world. The cigarette
manufacturing factory of Abul Khair Tobacco Company Ltd. is in Comilla. There
are many brands of Abul Khair Tobacco. Among the brands the commodities
that are distributed by the M/S. HASHEM TRADING Khilgaon distributor are as
follows;
MARISE WHITE
RALLY
SALMON MATCH
MARISE
Segment: Medium.
Brand Identity: Red strip on upper side of golden packaging, golden foil,
Ambushed brand name and special engraved brand logo, company monogram
and bar codes on HLP, Cigarette Die print.
After meeting the local demand of tobacco, Abul Khair has the provision of
exporting them to some foreign countries.
Segment: Low.
Brand Identity: Crescent strip in between red and blue color combination.
Brand Core Value: Super quality blend with lower nicotine and higher sugar.
Smooth taste and flavor.
After meeting the local demand of tobacco, we have the provision of exporting
them to some foreign countries.
Brand Core Value: Lower nicotine and higher sugar with Smooth taste and
flavor.
After meeting the local demand of tobacco, we have the provision of exporting
them to some foreign countries.
In tobacco industry, there are many local & foreign companies. Abul Khair
wants to be local unique tobacco producer with the same quality of foreign
company. For this purpose AKTCL produces Rally for middle segment target
group who like to live stylist life.
AKTCL has its own marketing & sales department in AKTCL chamber. The
functions of this distributor are not very wide and dynamic. Main functions
performed by this department are:
SELLING DEFINITION
Selling is trying to make sales by persuading someone to buy one's product or
service. From a management viewpoint it is thought of as a part of marketing,
although the skills required are different. Sales often form a separate grouping
in a corporate structure, employing separate specialist operatives known as
Sales Representatives (singular: Sales Representative). Selling is considered by
many to be a sort of persuading "art". Contrary to popular belief, the
methodological approach of selling refers to a systematic process of repetitive
and measurable milestones, by which a Sales Representative relates his or her
offering of a product or service in return enabling the buyer to achieve their
goal in an economic way.
This report will be dealing with the selling and distribution policy and strategies
of Abul Khair Tobacco Company Limited’s distributor. The main study is to
compare and distinguish the distributor’s selling activities with the selling
approach theory.
Cold calling
Consultative selling
Direct selling
Guaranteed sale
Needs-based selling
Persuasive selling
Relationship Selling
CONSULTATIVE SELLING
Consultative Selling is a selling technique that emphasizes the dialogue
between the salesperson and the customer. Before talking product and/or
service, the salesperson strives to learn about the customer's needs, and may
even help the customer identify and phrase these needs. Then, instead of
delivering a standard sales pitch about a product or service, the salesperson
can sell a tailored solution that meets the customer's needs, using the
customer's language.
DIRECT SELLING
Direct selling is a retail channel for the distribution of goods and services. At a
basic level it may be defined as marketing and selling products, direct to
consumers away from a fixed retail location. Sales are typically made through
party plan, one to one demonstrations, and other personal contact
arrangements. A text book definition is: "The direct personal presentation,
demonstration, and sale of products and services to consumers, usually in their
homes or at their jobs."
According to the WFDSA, consumers benefit from direct selling because of the
convenience and service it provides, including personal demonstration and
explanation of products, home delivery, and generous satisfaction guarantees.
Direct selling is distinct from direct marketing because it is about individual
sales agents reaching and dealing directly with clients. Direct marketing is
about business organizations seeking a relationship with their customers
without going through an agent/consultant or retail outlet.
We know that the basic commodities of AKTCL are cigarettes. Sometimes, TSO
Md. Anwar Hossain adopt direct selling strategy to promote brands. During my
internship, I have experienced this type of strategy adopted by the TSO Md.
Anwar Hossain to promote Marise brand. TSO trained all the SR and BP about
the technique that he actually wants to adopt. Then he divided all of them into
team basis in different region to promote their brand with a team leader. They
were trained to give free sample if necessary to those customers who are the
smoker of competitive brand.
PRICE-BASED SELLING
Price-based selling is a specific selling technique in which a business,
exclusively reduced their price in attempt to close the sales cycle. Price-based
selling clearly exists in businesses such as: commodity sales, auto sales,
hospitality, and even some retail stores. However, it is only recommended that
commodity items like petroleum be sold exclusively by price. Price based
selling does nothing more than erode your price, reduce profit levels and
creates an impression in your customers mind that all of your products and
services are priced at a level to take advantage of them. The drawback to
Price-based selling is that it results in the good or service that is sold becoming
a commodity and a commodity by definition is a product or service that has no
differentiating qualities or characteristics from competing products or services
in its class. A 2007 Shop zilla survey asked 2000 shoppers what the most
important factor was in their buying decision, and 49% said price is the most
important.
Most businesses sell their items, whether they are expensive automobiles, or
inexpensive services based upon price. They do this not because it is the most
profitable, but because they believe it is the easiest way to attract customers.
Consumers and Business-to-Business buyers alike may be easily enticed to buy
based upon price. Consumers are always hunting for the best bargain and price
has a direct impact on whether or not they will buy a product or service.
Businesses know that offering the lowest price gives them a competitive
advantage against other similar products the customer may be looking at.
The goal of price based selling is to capture the business of price sensitive
sellers. Customers who shop purely based on product cost will have the most
interest in bargain buys. Pricing is directly related to the revenue management
department of a business, and any good revenue manager will make sure they
are doing everything possible to maximize profits.
The price of cigarettes is one of the most important factors affecting tobacco
consumption as high cigarette prices can prevent people from taking up
smoking and encourage those who smoke to quit. The World Bank (1999)
calculated that a 10% increase in the price of cigarettes can reduce demand by
around 4% in high income countries. Due to this high cost of cigarettes many
smokers are switching to lower priced discount brands.
Various Methods
Price-matching guarantees
Price slashing
Price cutting is a sales technique that reduces the retail prices to a level low
enough to eliminate competition. Businesses will implement this as a way to
under-cut the competition and offer the best price to the consumer. Basically,
no company implement this type of method in terms of cigarette industry.
Discounting
Discounting is something seen in almost every retail store, and grocery store.
Discounting is present in just about every business in some way, whether it be
coupons, advanced purchases, or bulk buying, businesses are quick to offer a
pricing discount. AKTCL has a system of free pack program. If any retailer gives
7 inside cover of any brand he or she will be given a single pack brand totally
free. Coupons and promotions give an economic incentive for the customer to
use when purchasing a brand. The effect on consumer redemption of coupons
has mostly been positive as it attracts customers, and gives them interest in a
particular brand. Discount brands are becoming more popular among lower
Socio-economic Groups. As the price of cigarettes continues to increase
smokers are becoming more likely to trade down to discount brands which are
becoming more and more acceptable due to their increased recognition and
popularity in the market-place. Overall, the industry recognizes that discount
brands have the potential to fulfill both the emotional needs and the practical
needs of many smokers.
Haggling
As the prices of AKTCL brands are fixed, there is no option to bargain but to
shift the segment or taste.
AKTCL distributor follows the TAS strategy. This selling target varies from 1020
to 1030 unite per SR daily. Not only SR but also this selling target varies from
brand to brand. When this target is given to each SR for one month, each day
all the SRs are given reminder by the TSO about the monthly selling target
improvements. If any one fails to complete his or her daily target unit, the next
day he will be reminded about the monthly target and the previous
uncompleted target amount to fulfill that day, so that the SR can complete his
monthly selling target properly. Introduced in an intensive, highly interactive
program, the TAS process helps sales professionals win more business by:
• Focusing on the right issues with the right people at the right time
o Big rewards for success, and even bigger costs for failure
TAS creates or shows a framework for determining the most effective approach
to winning the customer’s business. Through this type of selling strategy
salesperson of AKTCL can do competitive selling effort every period of their job
schedule.
TAS is a method to identify the roles and status of people who affect or will be
affected by customer buying decisions. Through TAS strategy a salesperson of
AKTCL can be able to know the monthly mission to do. So that, he can moves
himself according to the monthly target schedule.
The type of benefits provided by products and services affects the nature of
the sales job. Products such as chemicals and trucks typically have tangible
benefits: Customers can objectively measure a chemical’s purity and a truck’s
payload. The benefits of services, such as business insurance or investment
opportunities, are more intangible: Customers cannot easily see how the
insurance company handles claims or objectively measure the riskiness of an
investment. Intangible benefits are harder to sell than tangible benefits
because it is difficult to demonstrate intangible benefits to customers. It is
much easier to show a customer the payload of a truck than the benefits of
carrying insurance. As cigarette commodity AKTCL giving one pack free for
those retailer who buy one carton cigarette that means if any retailer buys 200
cigarette (One Carton) 10 cigarette or one packet free for those retailer.
Regional Sales Officer (R. S. O.) sits on the first floor of the chamber. In
numbers (R. S. O.) is one and he controls three territory offices, which are
located in Dhanmondi office, Basabo office and the Khilgaon office. I am doing
my internee in the Khilgaon branch distributor. Among the other staffs Territory
Sales Officer (T. S. O.) is one in number and he control a large area’s sales
volume. T.S.O. is the in charge of a single office. He will responsible for the one
The actual marketing activities of AKTCL are performed by the Territory Sales
Officer. Not only that about the entire job under the marketing and selling
department are directed and maintained by the T. S. O. Md. Anwar Hossain.
Regional Sales Officer is the team leader of his region. He motivates and
impels his team members to achieve the targets. Basically he implements the
distribution plan in his region with the help of his team. The regional manager
reports to the head of Trade Marketing and Distribution. A Regional Sales
Officer (R. S. O) controls three or four area’s distribution process and holds the
power of sales territory management. R. S. O. helps out in the implementation
and development of TM&D national plans and strategies for his area. He is the
team leader for his area team. He utilizes the company human resources in an
effective manner. In addition he also utilized the distributor resources in a
manner by which he gains the maximum output.
A Territory Sales Officer (T. S. O.) is a key person of AKTCL. He focused outlets
for which he makes & executes trade marketing & distribution plan to meet
out. T. S. O. Assists the R. S. O. for implementation of above said goals in an
effective and efficient manner. Further he directly interacts with the distributor
and Trade. The achievement of TM and D targets and merchandizing is one of
the core responsibilities of T. S. O. He also manages the given human resource
of own and distributor. Even sometimes or it can be said that most of the cases
he recruits his own Sales Representatives as well as brand promoter and others
also. His main agenda behind the recruiting personnel is to fulfill the trading
target amount given by the TM and D.
Distribution management
Intelligence of market
SR management
Wholesale management
Nobabpur Road
Bonosree
Territory
Rampura Sales Officer Bongshal Road
(T. S. O.)
Khilgaon Jhilpar Nazim Uddin Road
Beylli Road
TSC and Shahid Minar
Eskaton Road
Shahabag Road
Shahabag Road Right Side Only
Review discussion on the previous day’s morning meeting topics and the
instructions given
Let the SR inform to the retailer about the particular decision taken by
the head office for the retailer
Writing down some important suggestion from the SR which were given
by the retailer and let inform to the head office to emphasize on that
If there are any logistic problems discuss with the BP, SR, ZI about the
problems to solve
If there are any promotional activities going on discuss with all the BP,SR
and ZI about the matter
After distributing all the daily task of BP, ZI and SR, supervise them all
PROMOTION CO_ORDINATOR
⇒ RESPONSIBILITIES
⇒ PURCHASE ORDER
It is conduct after the approval of indent from Regional Sales Officer. It is
permeation from Regional Sales Officer and it conform the availability and
allocation of funds for certain activity that relates to promotion.
AKTCL gives a Plano gram to every BP. So Md. Anwar Hossain (TSO) also works
according to Plano gram. He put Marise brand stock then Marise White, Super
King special filter is second and at last Rally and Special Abul Bidi. He was also
decorating the out let with merchandising material.
OBJECTIVES OF BP
o Topping Up
o Availability
o Visibility
o Pack display
o Promotion awareness
o Consumer contact
o Merchandising awareness
o Competition awareness
o Market intelligence
o Out of stock
Preparation
Approach
Stock check
Presentation
Closing
Consumer contact
Evaluation
Administration
PREPARATION:
In this first step a salesman should check the stock, which is required in
market. In the morning he should be neat & clean if he feels any deficiency, he
should be control this deficiency. He should check the van and he should have
the cash memo and ballpoint. All the point also be checked by the TSO Md.
Anwar Hossain too.
Complete the passage from distributor to shop and when reach in shop he
must understand the behavior of shopkeeper. According to the behavior of the
retailers, the SR approach in accordance with the situation.
STOCK CHEK:
SR of AKTCL check all brands are available in the shop and if any brand is short
then he should complete the stock and give the stock to shopkeeper according
to its sale volume.
PRESENTATION:
If SR has any information about any brand of AKTCL, he should give to shop
keeper and if AKTCL offers any scheme and promotion, the responsibility of SR
is to give all these information to shop keeper.
CLOSING:
Give maximum material to shopkeeper. Check cash memo and at the end,
close all written work.
COSUMER CONTACT:
This step is most important for salesmen and sales promoters as well. In which
we convert the smoker to AKTCL brand if he use any other brand. In this step
SR convince the customer to use the brand of AKTCL.
ADMINISTRATION:
Administer to all activities like cash memo, DSD etc. All the SR has to report
everyday in daily cash memo. SR also has to perform administrative job during
field work.
EVALUATION:
6: Signature from T. S. O.
⇒ STOCK REGISTER
AKTCL maintains a register that is called SD for the purpose of daily sales. This
is the legal responsibility by the company to maintain a stock register on daily
bases.
REGISTER SHOWS
On hand stock
By the above draft all the SR summarizes their daily sales and report this paper
to the Zone In charge and approved by the TSO Md. Anwar Hossain and after
all this activities done Assistant Manager note down the daily sales and receive
the cash amount from the SR. After receiving the cash from the SR, all SR
become relieve from their day’s job. Thus, AM Mr. Bappi maintain the account
records and also prepare monthly profit and loss account.
FLEXIBILITY
CREATIVITY
CONFIDENCE
EMOTIONAL INTELLIGENCE
Salespeople span the boundary between their companies and the companies’
customers. At times the objectives of the company can differ from those of the
customers. The company wants the salesperson to make profits, and the
customer wants to buy a product that meets his or her needs at the lowest
price. Dealing with these conflicting objectives can be very stressful for
salespeople.
COMMUNICATION SKILLS
Most salespeople work in the field without direct supervision. Under these
conditions they may be tempted to get up late, take long lunch breaks, and
stop work early. But successful salespeople do not surrender to these
temptations. They are self-starters who do not need the fear inspired by a
glaring supervisor to get them going in the morning or to keep them working
hard all day. Spending long hours on the job is not enough. Salespeople must
use their time efficiently. They need to maximize the time spent in contacting
customers and minimize the time spent in traveling and waiting for customers.
To do their job effectively, salespeople must organize and plan their work.
Finally, successful salespeople are motivated to learn. They must continually
work at improving their skills by analyzing their past performance and using
their mistakes as learning opportunities.
Many people do not want to spend long hours behind a desk, doing the same
thing every day. TSO of AKTCL Md. Anwar Hossain is one of the examples of
such person. They prefer to be outside, moving around, meeting people, and
working on various problems. Selling ideally suits people with these interests.
The typical salesperson interacts with dozens of people daily. Most of these
contacts involve challenging new experiences. Selling also offers unusual
freedom and flexibility. It is not a nine-to-five job. Most salespeople decide how
to spend their time; they do not have to report in. They have the freedom to
determine what they do during a day, to decide which customers to call on and
when to do paperwork. Long hours may be required on some days, and other
days may bring fewer demands. Because of this freedom, salespeople are like
independent entrepreneurs. They have a territory to manage and few
restrictions on how to do it. They are responsible for the sales and profits the
territory generates. Thus their success or failure rests largely on their own
skills and efforts.
During the past century most Companies were small and knew their customers
first hand. Managers picked up marketing information by being around people,
observing them and asking questions. During this century, however, many
factors have increase of the need for more and better information. As sellers
use more complex marketing approaches and face more competition, they
need information of the effectiveness of their marketing tools. Managers need
more up-to-date information to make timely decision.
In this project work the topic was to “Marketing Strategy of Abul Khair Tobacco
Company Limited”. During the project, a conclusive method of the marketing
and selling approach was followed to find out the selling concept and reality.
While working on the project, it was realized that the selling tobacco work is
very hard to establish any marketing strategies before making decision.
MARKETING CONCEPT
Marketing Concepts
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing
Concept
Customer Concept
Production Concept is a concept where goods are produced without taking into
consideration the choices or tastes of your customers. It is one of the earliest
marketing concepts where goods were just produced on the belief that they
will be sold because consumers need them.
Management Obligation
Assumption
Limitation
AKTCL is strictly adopting this type of marketing concept. That is why the price
of the most of the brands of AKTCL is low. The segmentation of the AKTCL is
also middle and lower segment too. For the lower segmented customer it must
keep in mind that the price should be low. That is why production concept must
be followed by the AKTCL.
The Product Concept in marketing refers to the ideology that a product would
be the most successful in the market if the main focus is put on the product
quality and specifications itself. It goes against the Marketing Concept that
puts focus on consumer insight more than on anything else. The Product
Concept simply believes that the product would sell itself, and it is especially
applicable to technological breakthroughs.
Management Obligation
Assumption
It assumes that buyers admire well-made products and can evaluate quality
and performance.
Who will define and what would be the definition of quality are the main
problems of that concept.
If AKTCL wants to follow this type of marketing concept, then the price of the
product price will increase and the segment customer may switch that brand
for the price increases. That is why the AKTCL is not following the product
concept.
Many organizations follow the selling concept, which holds that consumers will
not buy enough of the organization's products unless it undertakes a large
scale selling and promotion effort. The concept is typically practiced with
unsought goods, those that buyers do not normally think of buying such as
encyclopedias or insurance. These industries must excel at tracking down
prospects and selling them on product benefits.
Management Obligation
Assumption
Limitation
Marketing based on hard selling carries high risks. It assumes that customers
who are coaxed into buying a product will like it and if they do not they will not
badmouth it or complain to consumer organizations and well forget their
disappointment and buy it again.
MARKETING CONCEPT
Management Obligation
Assumption
This concept assumes that consumers will buy the product again if they are
satisfied. In this case satisfied customers work as an advocate.
Limitation
Understanding customer needs and wants is not always simple. In the course
of converting to a marketing orientation, a company faces three barriers (1)
Organized resistance (2) Slow learning (3) Fast forgetting.
AKTCL is also following this type of marketing concept as well. TSO Md. Anwar
Hossain trying hard with the BP as well as SR to promote their brands through
the marketing concept.
The idea that the organization determine the needs, wants and interests
of target markets and deliver the desired satisfactions more effectively
and efficiently than do competitors in a way that maintains or improves
the customer’s and society’s well-being.
Management Obligation
Managers must concern to build social and ethical considerations into their
marketing practices. They must balance and juggle the often conflicting criteria
of company profits, consumer want satisfaction and public interest.
Assumption
Limitation
The idea that consumers will favor product that are designed according to their
requirement is called customer concept. A growing number of today’s
companies are now shaping separate offers; services and messages to
individual customers. These companies collect information on each customer’s
past transaction, demographics and psychographics and media and distribution
preferences.
Management Obligation
Assumption
This concept assumes that consumers like to get product according to their
own choice.
Limitation
Since the commodity of AKTCL is cigarette, cigarette is being made without the
concept of customer. That is why this type of customer is not being followed by
the AKTCL.
MARKET SEGMENT
Rather than offer the same marketing mix to vastly different customers,
market segmentation makes it possible for firms to tailor the marketing mix for
specific target markets, thus better satisfying customer needs. Not all elements
of the marketing mix are necessarily changed from one segment to the next.
For example, in some cases only the promotional campaigns would differ.
measurable
accessible by communication and distribution channels
different in its response to a marketing mix
durable (not changing too quickly)
substantial enough to be profitable
A basis for segmentation is a factor that varies among groups within a market,
but that is consistent within groups. One can identify four primary bases on
which to segment a consumer market:
The optimal bases on which to segment the market depend on the particular
situation and are determined by marketing research, market trends, and
managerial judgment.
There are four key segments of products according to the price offerings in the
market. These are:
I. Premium Segment
According to the product price and quality offers, Abul Khair Tobacco Company
Limited segmented their large market into medium segment, low segment and
very low segment.
• Product
• Price
• Promotion
Product Place
Target
Market
Price Promotion
These four P's are the parameters that the marketing manager can control,
subject to the internal and external constraints of the marketing environment.
The goal is to make decisions that center the four P's on the customers in the
target market in order to create perceived value and generate a positive
response.
PRODUCT DECISION
Brand name
Functionality
Quality
Safety
Packaging
Warranty
Most of the product decisions are made from the head office of AKTCL which is
located in Chittagong, Pahartali area.
PRICE DECISION
Seasonal pricing
Bundling
Price flexibility
Price discrimination
DISTRIBUTION DECISION
Distribution channels
Inventory management
Warehousing
Distribution centers
Order processing
Transportation
Reverse logistics
As a distributor AKTCL, TSO Md. Anwar Hossain is fully performing all the
distribution decisions properly and effectively.
PROMOTION DECISION
In the context of the marketing mix, promotion represents the various aspects
of marketing communication, that is, the communication of information about
the product with the goal of generating a positive customer response.
Marketing communication decisions include:
Sales promotions
All the activities of promotional decisions are made by the TSO Md. Anwar
Hossain. AKTCL authority has delegated the authority to do all kinds of
promotional activities to promote their brands.
Prospecting
Communicating
Servicing
o Order Taking
o Commodity Delivering
Adjust the marketing offer to fit the special needs of each customer
TSO Md. Anwar Hossain manages the sales forces by following structure;
Training Salespeople
Compensating Salespeople
Supervising Salespeople
Evaluating Salespeople
Training Salespeople
The average sales training program lasts for one months and has the following
goals
TSO Md. Anwar Hossain adopt training program at a very short time period.
Salary
Bonus
Commission
Benefits
Supervising Salespeople
Organizational climate
Positive incentives
Honor
Awards
Trips
Evaluating Salespeople
TSO evaluate sales people monthly as well as daily sales basis and after
evaluating action taken;
Work plan
The product revenue and profits can be plotted as a function of the life-cycle
stages as shown in the graph below:
In the introduction stage, the firm seeks to build product awareness and
develop a market for the product. The impact on the marketing mix is as
follows:
Profit – Negative
GROWTH STAGE
In the growth stage, the firm seeks to build brand preference and increase
market share.
MATURITY STAGE
DECLINE STAGE
Now point to be noted that the Abul Khair Tobacco Company Limited is running
their product at maturity level. Not only Bangladesh but also out of border
AKTCL exporting their commodities at a large scale range. It is estimated that
AKTCL earning per annum about 100 million dollar.
When using SWOT analysis, one has to be realistic about the strengths and
weaknesses of the organization. Distinguish between where the organization is
today, and where it could be in the future. Also have to remember to be
specific by avoiding gray areas and always analyze in relation to the
competition. Finally, one has to keep SWOT analysis short and simple, and
avoid complexity and over-analysis since much of the information is subjective.
Thus, this report can be use as a guide and not a prescription.
STRENGTHS
o AKTCL offer various incentive packages like coupon, Wall Clock, tape
recorders and free pack in promotion.
o Management of AKTCL create a database and all its employees are link
between each other
o AKTCL appreciates all of those employees who show more effort in their
work.
o AKTCL segments are medium, low and very low which matches most of
the Bangladeshi
o Salaries of Sales Representatives are given in time, that’s why they are
satisfied on this.
WEAKENESSES
o The law also prohibits installation of any vending machine from where
tobacco products can be purchased through an automatic system.
o Salaries of salesmen are very low due to this reason they are not
satisfied.
o TSO always push all the employees for their own job for extra effort.
OPPERTUNITIES
o Brand‘s acceptance shows that it has potential to grow and grow well.
o The law, however, does not prohibit smoking in open space, hotels and
restaurants and parks. This is an opportunities to segment market as
well.
o The law suggests that the owner, caretaker, controlling authorities and
management of public places and public transport could have an area
within designated as smoking zone.
o Promotion has been a strong basis towards building up big brand image
for all AKTCL.
THREATS
o When AKTCL starts any activity of coupon scheme other competitors also
start such type of scheme.
The business unit has low market share compared to competitors, however it is
doing business in high-growth market. Most of the new businesses start in this
quadrant. There are well established businesses in this market and new
businesses try to grow and capture more market share. This market is growing
and there are opportunities for new businesses. At the same time there is risk
involved with investing in this business – because of that these businesses are
called question marks. Question Marks have to develop and grow by investing
and continuously improving their business. Grow sales by increasing market
share. Use cash from Cash Cows to support required investments. Question
- have the worst cash characteristics of all, because high demands and low
returns due to low market share
- If nothing is done to change the market share, question marks will simply
absorb great amounts of cash and later, as the growth stops, a dog.
- Either invests heavily or sells off or invests nothing and generates whatever
cash it can. Increase market share or deliver cash
The business has high market share compared to competitors and it is doing
business in high-growth market. This business is a market leader. Successful
Question Marks will grow their business and capture more market share and
will hopefully become Stars (move from the Question Marks quadrant to the
Stars quadrant). Successful and competitive organizations have at least one
star business unit or product. Abul Khair Tobacco Company Limited in going
under stars category. Stars have to improve their business continuously in
order to keep their position in the marketplace. As long as this market is
growing new question marks will try to capture new business. Invest for sales
growth and market share. Use cash from Cash Cows to support required
investments. Stars generate large amounts of cash because of their strong
relative market share, but also consume large amounts of cash because of
their high growth rate; therefore the cash in each direction approximately nets
out. If a star can maintain its large market share, it will become a cash cow
when the market growth rate declines. The portfolio of a diversified company
always should have stars that will become the next cash cows and ensure
future cash generation.
- Use large amounts of cash and are leaders in the business so they should also
generate large amounts of cash.
However, if needed any attempt should be made to hold share, because the
rewards will be a cash cow if market share is kept.
The market is not very attractive – low market growth rate, however the
business has high market share compared to competitors. This business
generates a lot of cash and helps the organization invest in other businesses.
Since the market does not attract new players, this business does not need
substantial investments to keep the market share. Cash Cows have to protect
and keep the market share and maximize cash flow. Maintain the strong
market position and defend your market share. Take advantage of sales
volume and leverage the size of operations. Support other businesses. As
leaders in a mature market, cash cows exhibit a return on assets that is greater
than the market growth rate, and thus generate more cash than they consume.
Such business units should be "milked", extracting the profits and investing as
little cash as possible. Cash cows provide the cash required to turn question
marks into market leaders, to cover the administrative costs of the company,
to fund research and development, to service the corporate debt, and to pay
dividends to shareholders. Because the cash cow generates a relatively stable
cash flow, its value can be determined with reasonable accuracy by calculating
the present value of its cash stream using a discounted cash flow analysis.
Recently some brands of AKTCL are at this level.
- Profits and cash generation should be high , and because of the low growth,
investments needed should be low. Keep profits high
- Foundation of a company
This business has low market share and operates in low-growth market. It is
unlikely that this business is very profitable – more likely this business is a
loser. Such a business needs consideration and new strategy development.
Potential strategies are withdrawal, selling the business, repositioning the
current business, and operating cost reduction. Optimize your current
operations. Get rid of all non value added activities and features. Reposition
your offering to generate positive cash flow or sell this business. Dogs have low
market share and a low growth rate and thus neither generate nor consume a
large amount of cash. However, dogs are cash traps because of the money tied
up in a business that has little potential. Such businesses are candidates for
divestiture. AKTCL is not yet thinking about this type of category for the
upcoming twenty years.
In such a scenario:
A. Cash Cows Business Units will beat their profit target easily; their
management has an easy job and is often praised anyhow. Even worse, they
are often allowed to reinvest substantial cash amounts in their businesses
which are mature and not growing anymore.
B. Dogs Business Units fight an impossible battle and, even worse, investments
are made now and then in hopeless attempts to 'turn the business around'.
C. As a result (all) Question Marks and Stars Business Units get mediocre size
investment funds. In this way they are unable to ever become cash cows.
These inadequate invested sums of money are a waste of money. Either these
SBUs should receive enough investment funds to enable them to achieve a real
market dominance and become a cash cow (or star), or otherwise companies
are advised to disinvest and try to get whatever possible cash out of the
question marks that were not selected.
Under the growth-share matrix model, as an industry matures and its growth
rate declines, a business unit will become either a cash cow or a dog,
determined solely by whether it had become the market leader during the
period of high growth.
Limitations
The growth-share matrix once was used widely, but has since faded from
popularity as more comprehensive models have been developed. Some of its
weaknesses are:
The matrix depends heavily upon the breadth of the definition of the
market. A business unit may dominate its small niche, but have very low
market share in the overall industry. In such a case, the definition of the
market can make the difference between a dog and a cash cow.
While its importance has diminished, the BCG matrix still can serve as a simple
tool for viewing a corporation's business portfolio at a glance, and may serve
as a starting point for discussing resource allocation among strategic business
units.
Among the fast moving consumer goods company AKTCL is one of the
prominent native company which has several product line and many more
come in future. So in term of consumer perception and positioning they should
make in mind the following recommendation–
• In the weak belts in respect of less volume share AKTCL can increase the
Market Share by improving the Consumer Contact with the help of
Competent Workforce.
• The concerned sales & marketing executive should occasionally visit the
remote markets to encourage the SR.
• As a big Target Market, AKTCL is ignoring the Rural Areas in Area of TSO,
which should be considered.
CONCLUSION
2 Leaf Production 19
3 Burley Production 19
4 Employee Hierarchy 34
8 SWOT analysis 63
9 BCG Matrix 66
Reference
1. Philip Kotler, Principles of Marketing, Prentice -Hall, 1980
2. Mack Hanan, Consultative Selling: the Hanan Formula for High-Margin Sales
at High Levels, Kindle Edition, 1970.
4. Atul Uchil, Relationship Selling: the Fine Art of Consultative Sales, Outskirts
Press, 2007.
8. www.thetasgroup
9. CDP (1995a). Benson & Hedges in the South (Excl. London). Consumer
Lifestyle Analysis. Doc No 0064.