INTERNSHIP REPORT

Submitted to: Umar Arshad Khan

Submitted by: Shariq Abdullah Ejaz

Date: 20 June 2016 to 29 July 2016

 ABOUT PAKISTAN TOBACCO COMPANY

Pakistan Tobacco Company was the first multinational to set up its business in 1947 in Pakistan. It
took over business from Imperial Tobacco Company that was operating since 1929. In 1948
commenced pioneering of Virginia Tobacco Cultivation. Pilot production plant was set up in a
warehouse near Karachi port. The rapid expansion in the cigarette market over the years led to the
establishment of our state of the art manufacturing facilities in Jhelum and Akora Khattak.

Pakistan Tobacco Company is one of the largest multinational company working in Pakistan. PTC is
a subsidiary of British American Tobacco (BAT group), which is the largest international tobacco
group and has its business in 180 countries all over the world. It owns two tobacco factories in
Pakistan and gives employment to more than 1700 people. Moreover it contributes more than Rs.
30 billion in taxes and excise duties to the government of Pakistan playing an important role in the
development and growth of the country.

Pakistan Tobacco Company has come a long way from being just a single factory operating to a
company which is involved in every aspect of cigarette production, from tobacco cultivation to
packaging. But what is really significant about these sixty six years is the tremendous efforts that
Pakistan Tobacco Company has made in the development of the country. By spear heading, the
campaign for modern agriculture and industrial practices, they have been instrumental in the
development and progress of the agriculture and industrial sector in the country.

Pakistan Tobacco Company has been leader in innovative marketing campaigns, which brought a
whole new competitive edge to Pakistan business world.

Currently is producing 8 family brands of cigarettes which include:

 BRANDS OF PTC

1. DUNHILL
 DUNHILL LIGHTS
 DUNHILL SWITCH

2. BENSON & HEDGES

 BENSON & HEDGES
 BENSON & HEDGES LIGHTS

3. JOHN PLAYER GOLD LEAF

 GOLD LEAF
 GOLD LEAF SPECIAL
 GOLD LEAF CLICK

4. Capstan
 Capstan Filter
5. PALL MALL
 CAPSTAN BY PALL MALL ORIGNAL
 PALL MALL PLUS

6. GOLD FLAKE
 GOLD FLAKE
 GOLD FLAKE SC
 GOLD FLAKE STYLE

7. EMBASSY
 EMBASSY FILTER

8. WILLS
 WILLS INTERNATIONAL
 VISION STATEMENT
“World’s best at satisfying consumer moment in tobacco and beyond”

“First Choice for Everyone”

MISSION STATEMENT
“To champion informed consumer choice and deliver our commitment to society”

“DARE TO BE DIFFERENT”
 TOBACCO PLAYERS MARKET SHARE(June 2016)
PTC 46.3%
PHILLIP MORIS INTERNATIONAL (PMI) 19.4%
DUTY NON PAID (DNP) 29.7%
IMPORTED 4.6%

BAT (British American Tobacco) is in +180 Countries

PTC Functions:
 Marketing
 Supply Chain
 Legal and Cora
 I.T
 Security
 Finance
 HRM
 EHS

Marketing Departments:
 Trade Marketing and Distribution
 Brands Marketing
 SPI research department (R & D)

Trade Marketing and Distribution is divided into four regions:

(Pakistan: Head of Trade Marketing)

(Region: Regional Manager)

(Area: Area Manager)

(Territory: Territory Executive)

North Region:

Central Punjab:

Southern Punjab:

S&B:

Supply Chain:
Working Chain:

Key Points:
 Distribution work as a third party for PTC.
 44 distributor or VBP in Southern Punjab.
 Hierarchy of distribution is different according to their volume.
 Through distribution management model distribution works.
 Advance payment is done in distribution.
 45-55 shops to be visited / deal each day by each DR.

Distribution Chain:

International Marketing Principle:

 Standard no television advertisement.
 No under 18 testing.
 No tobacco promotion.
 No out store merchandising.
 PTC cannot give gifts to the consumer but to the retailers.
 But we can add coupons in a pack to communicate with our consumer etc.
Brand Ambassador’s:
He is the only source by which company’s message is forwarded to the consumer.

 Premium BA’s: Dunhill, Gold Leaf, Benson and Hedges etc.

 Regular BA’s: Capstan by Pall-mall etc.

Total 38 BA’s in Multan Market.

Segmentation of Brands:
 Premium segment (high) Rupees: 100+ per pack
 Medium segment Rupees: 65-100 per pack
 Low segment Rupees: 50-65 per pack

Third Party Organization:

All the BA’s work under third party organization (outreach marketing)

Sale Types:

Primary Sales:

Secondary Sales:

Channels VDD / DD:

Urban area is called DD (direct delivery) and rural area is called VDD (village direct delivery)
there are 46 DR (distributor representative) or salesman which cover Multan area both VDD and DD.
DR which cover urban area is 37 and which cover rural their numbers are 8 and 1 DR covers
wholesale.
Journey Cycle:
Any working cycle of the company employees, e.g. working cycle of TE and FSO etc.

Stock Management:
Stock management work on first in first out (FIFO) and sometimes on last in first out (LIFO)

VBP Financial Review:

Value Business Partners  Distributors

Assigning Sales Targets to FSO’s / DRs:

Every FSO’s have 7 DRs working under him. Every FSO need to visit daily 30 outlets to cross check
DR’s visit, stock availability, bill checking, POP checking, proper message conveying, telling new
policies and incentives plans, updating there DSR properly and if any outlets do not have the stock,
they provide them the stock. DR should visit 50 outlets daily and provide stock and check all brands
should be available and there should be no OOS (out of stock) before there next visit, POP should
be clean and properly displayed.
Multan Market:

Each FSO has 7 salesman working under him.

Depot on Hand:
Warehouse manager knows how much stock is available in the warehouse.

Coverage and Productivity:

Total number of shops visited by the DR is called productivity and at least DR should have
90% productivity.

Curve Ball Implementation and Analysis:

The plan introduce by the company that work of SP is done by the DR and additional Rs.
4000 of DR salary is paid by the company.

DR Attachment:
Call Sequence:
DR route for visiting the outlets

Productivity:
Total number of shops visited out of total number of shops assigned.
Sales Target:
Target assigned to salesman is called sales target.

Cash Memos:
The bill given by salesman to retailer is called cash memos.

DSR:
(Daily Sales Report) A report in which salesman enter total number of brand wise sales and
the number of shop visited is written.

OOS Recording:
Salesman should see before his next visit that retailer should not be out of stock.

Brand Ambassador (BA) attachment:

Sale Pitch:
The dialogues which is given by company to BA by which he can contact the target
consumer.

Consumer Contact:
The specification given by company of consumer to whom BA can contact, like BA cannot
contact less than 18 years old person.

Gathering Market Intelligence:

Gathering information of other company’s merchandizing, discounts, trade offers and new
launches activities.
 Project Supremacy – 5

Program Introduction:
Project Supremacy plan is extension of 2015 project supremacy-4 plan. Plan is aimed at
improving our business health in MG Strong Hold markets, Stamping CbPMO growth in MG strong
holds and to curtail declining VFM distribution and minimize OOS in all segments in context of
squeezing shelf space of our key brands in rural led by DNP’s.

Key Objectives:
 To make Pall Mall bigger then Morven Gold Strong hold markets.
 To curtail OOS and improve VFM distribution in rural.

Rural Supremacy (OOS Control Plan)

Mechanics
 Basket Offer : 1 CbPMO Free pack on purchase of following Brand Mix (CbPMO : 10 Packs +
Cold Flake : 5 Packs)
 Free Pack to be given max thrice monthly i.e. Retailers can avail this offer three times a
month.
  Credit Extension : Bill to bill credit extension to outlets on need basis by VBP’s
 DR will take on hand of key brands on every visit and maintain tracker.

Controls
 DR will maintain trackers of these outlets on daily basis.
 Free stock to be mentioned on trackers and Cash memo.
 Retailers signature to be taken on cash memo and receiving to be taken in tracker.
 Free stock to be mentioned on SD-20 on daily basis.
 Distributor will maintain the record of all requisition and tracking sheets, which will be
attached with Distributor’s claim.

Objectives
 To eliminate CbPMO and Gold Flake OOS in rural (below 5%)
 To increase CbPMO rural distribution by 2% in exit 2016

Duration
 9 months (April-December 2016)

Urban Supremacy (Retail Engagement)

Mechanics
 Monthly sales targets of CbPMO, Gold Flake family shall be given to these retail outlets.
Target will be set over and above the base volume of those outlets.
 CbPMO Weightage in target is 70% and Gold Flake is 30% and incentive would be given
based on this ratio, however if retails achieve bottom line target of both brands incentive
can be passed on.
 Targets would be given in such a way that desire incremental gain of 7% must be achieved.
 These retailers must not have OOS situation during the month for our drive brands (JPGL,
CbPMO, Gold Flake Family)
 Winning ratio for retails is 80%
 Upon achieving the total monthly target and fulfilling above criteria Retailer would be
awarded with Rs. 1000/- value stock of CbPMO or Gold Flake.
  Incentive would be given in the form of CbPMO or Gold Flake free stock.

Controls
 Proper outlet wise purchase record (cash memo) to be maintained on format. On every beat
salesman has to fill in the purchases and get it signed from retailer. This form should be
maintained at distributor shop as well on retails.
 Monthly distributor claims submission with receipt of free stock from the retailer to area
office.
 Managing the given budgets effectively will be responsibility of concerned T.E.
 The Communication letter form AO duly signed by AM conveying Mechanics, Budgets,
Duration and Target Outlets should be sent to Distributor through a letter on PTC letter
head at least 1 week before the inception of offer.
 TE to monitor cascade of information by visiting selective sample outlets.
 Each DR will update his retailer’s sales in his tracking sheet throughout the month which will
be back checked by FSOs
 AM and TEs will visit the selected outlets on sample basis to verify sales tracking sheet.
 Distributor will maintain the record of all requisition sheets, which will be attached with
Distributor’s claims.

Objectives
 Gain CbPMO market share in VFM by 3%
 To gain 7% CbPMO growth
 To increase CbPMO volume
 To increase Distribution width and depth

Duration
 6 months (April and August-December 2016)
 Multan Market Execution:

Rural Supremacy:

Total No. of Outlets No. of Outlets Visited No. of Salesman Visited

180 180 10

Market visits:
Sales men Visited No of outlets Visited
Javed Arif 36
Khaleeq Ahmad 30
Zubair Mughal 21
Adnan 23
Shabeer 30
Ramzan 13
Kashif 16
Adnan Mujahid 09
Ghazanfar 01
Jawad Hashmi 01

Market Analysis:
 Overall availability of our major three brands improved on these outlets.
 On some outlets JPGL was not available, we made all the three major brands available on
most of the outlets.
 Some retailers did not welcome the scheme as they find it convenient on purchasing from
the whole seller.
 Communication gap existed up to a minor level.
 Two sales men Kashif and Adnan were being complained constantly by the retailers.
Findings:

Chart Title
120
120

100

80

60
30 30
40

20

0
Scheme Offered Scheme not offered Closed Outlets

Availability of Key Brands:

100% 100%
100%

99%

98%

97%

96%

95% 94%
94%

93%

92%

91%
JPGL CbPMO Gold Flake

Retailers Feedback:
 Most of the retailers warmly accepted the scheme.
 It was a great incentive for such week retailers which do not have the purchasing power.
 With the exception of some sales men, the retailers were satisfied with overall performance
and communication of the sales men.
Area for improvement:
 Continuous follow up.
 Counter checking and feedback on regular basis.
 Incentives of the sales men should be at risk if the message is not conveyed properly to the
retailers.

Urban Supremacy:

Total No. of Outlets No. of Outlets Visited No. of Salesman Visited

800 100 06

Market Visits:
Sales men visited No of outlets visited
Waseem Abbas 18
Rehan Jameel 12
M Ghazanfar 26
Hasnain 07
Aqeel Ahmad 32
Sana ur Rehman 05

Market Analysis:
 Retailers were very motivated towards achieving the targets.
 Some of the retailers also requested to increase their targets if there would be greater
incentive on achieving high targets.
 Some retailers were not informed about their targets due to the poor communication of the
sales man.
Findings:

25
21
20

15
10
10
6
4
5 3
1
0

Interpretation:
 All the outlets were selected up to the criteria on Morven Gold strong hold markets.
 Some retailers preferred to purchase from the whole seller.
 Overall the retailers warmly welcomed the targets assigned to them.

Area of improvement:
 Continuous follow up.
 Back check on regular basis.
 Incentives of the sales mans should be at risk if message not conveyed properly.
 Incentives of the retailers should be incentivized according to the volume class distribution.
Total Target Assigned:

VOLUME/MILLION

Gold Flake, 2.5

CbPMO, 6.5

Conclusion:

OOS COMPARISON
CbPMO Gold Flake

10%

4%

4%
2%
0
APRIL-16 MAY-16

 Decrease in OOS
 The retailers which do not hold the brands of PTC also started handling our brands.
 Increased market share.
 Brand awareness generation.
 Brand loyalty generation in future.
 PTC market extension.
Recommendations:
 Gifting to the retailers.
 Cash incentives for the retailers.
 BA’s should operate in remote areas.
 Incentivize DR for better coverage on OOS
 Extend credit facility on tactical outlets.
 Consumer Contact must be made properly.
 Incentives of the sales men should be at risk if the message is not conveyed properly to the
retailers.
 Retailers should be incentivized according to the volume class distribution.