Selling and Sales Management

Section B
Assignment No: 1

Due date: 7-01-2019

Submitted by: Group (8)

Hareem Nadeem L1S15BBAM0070 (GROUP LEADER)

Maira Irfan L1F15BBAM0109

Muhammad Baig L1F15BBAM0396

Waleed Bin Arif L1F15BBAM0106

Malik Muhammad Yousaf Akram L1F15BBAM0078

Asad Arif L1F14BBAM0034

Submitted To: Sir Khurram Hamid

Company Name: Shezan International Limited.

History
Initiated in Pakistan in 1964, Shezan International Limited (KSE: SHEZ) was at the start a joint venture between Shahnawaz Group
and the Alliance Development Corporation of USA. Involved in the manufacturing, and selling of juices, pickles, jams and ketchup,
the firm has been relentlessly expanding both into local and in international markets ever since. Subsequently purchasing all shares of
the company in 1971, Shahnawaz Group made it a public limited company and was registered on the Karachi and Lahore stock
exchanges. The establishment has been gradually expanding its production capacity over the years. In 1980-81, a separate unit was
installed in Karachi, which now caters for Karachi, Sindh and export demand. A new bottle filling plant was also set up in 1983 in the
Lahore unit, growing the capacity five folds. An independent tetra brick plant was specially made in 1987 making the unit leading
manufacturers with a complete range of production in the fruit processing field in Pakistan. Shezan has a juice factory in Hatter,
Khyber- Pakhtunkhwa and a bottle filling plant in Lahore, which has increased its productivity significantly. The firm's head office is
in Lahore and has distribution offices in the United Kingdom and Canada. Shezan International offers variety of products. Shezan is
one of the giant in the business and its portfolio consist several products. It majorly operates in the Juices, Pickles, Sauces, Salad
dressing sector, Ketchups and Jams. The company is involved in the processing, manufacturing, trading and selling of these items.

Table 1

Revenue:
The business portrayed encouraging results with handsome growth in profitability and 4.81% growth in net sales. The revenue is Rs
7.5 billion in (2017-18), Before tax profit was Rs 489.23 million. Company has paid Rs. 1.712 billion to the government on account of
different levies, including sales tax and income tax reflecting the participation in the national economy.

Sugar is one of the main ingredient of finished products and whole production scheduling revolves around the availability of high
quality sugar. purchase agreement has been signed between the Company and Shahtaj for a period from June 14, 2018 to September
30, 2018 for supply of 4,000 Metric Ton sugar at a total price of Rs. 184 million (excluding sales tax). Per Kg price is Rs. 46.20/-
excluding sales tax and Rs. 51/- including sales tax. Total price has been paid in advance and delivery terms is as and when required.

Unit Sales by product type:

Juice brands like "All Pure" and "Twist" drinks grew by 26.49 percent during the year 2017-18.Shezan "All Pure" juice is highest
selling product of Shezan. Pakistani's drink approximately 4500,000 liters juices per month and per dayit becomes 150,000 liters.The
market of juices is growing as because the consumption of juices is growing every year and expected to increase continually due to
people’s changing lifestyle and more health consciousness, they prefer juice, especially natural juice on other soft drinks. "All Pure"
has a lot of opportunity to grow. When All Pure was introduce in the market it was follow up by a ineffective promotional campaign.
The major opportunity for Shezan All Pure would be through brand awareness and secondly communicate the benefit of the product to
the consumer.

Number of Customers:
Shezan's target market is based on teenagers, students of school colleges and universities. Shezan is also offering products like sauces,
pickles, chutney, vinegar and other kind of house hold product. Through these products they are targeting whole families. They are not
relying on small group of people for their brand. The number of costumer of their brand is 90-110 million people in Pakistan. 80/20
rule is not applying in their case because their products are effectively distributed in all across Pakistan and different areas have
different sales volume. They don’t have B2B client as well that’s why they get sales from all across Pakistan. Sales can varied from
metropolitan cities to small cities.

Geographic breakdown:
Shezan breakdown their sales in to two geographic categories.

1) Domestic

In Pakistan they have 3 major Sole Distributor. Lahore, Karachi and Islamabad. Under Lahore there are 200 distributors, under
Islamabad they have 100 distributor and under Karachi sole they have approximately 200 distributors. Lahore is covering all the
Punjab demographically, Karachi is covering all over the Sindh province and Islamabad sole is covering product distribution and sales
of Azad Kashmir and Gilgit Baltistan.

Area Market Share

Lahore (Punjab) 43%
Karachi (Sindh) 18%
Islamabad (Fata, Kpk, GB, AJK) 28%
Other 11%

2) International
Internationally they are not getting enough sales as they are getting domestically. But their presence in international market is gaining
attention due to increase in the revenue from international clients.The company exports its food products to more than 40 different
countries.They have direct distributors in United Kingdom, America, Africa and Canada.Although the Company is known for its
mango juices, but is also a major producer and exporter of pickles, jams and ketchup, the firm has been relentlessly expanding both
into local and in international markets ever since.

But their major chunk of sales is from large cities of Pakistan.Karachi is leading in sales all across Pakistan. This city is generating 20
to 25% of sales for Shezan and it is the highest sales for any territory.

Revenue by month:
Total revenue is divided by the Number of the month to get the monthly revenue.75,00,000,000/12= 625,000,000. Shezan is getting
35-42% of revenue from their juices(All Pure, Twist, Country etc). Sales of juices have trends, it is directly related to the warm and
cold weather. In summer the sales of juices increases and in winter sales get decreased. Month from march to September are the
highest sales month for their juices.

New business revenue:

Recently they launch several products "Shezan Sarsoon ka Saag", "Sweet Corn", "Garden Pees", "Peach Halves", "Ispaghol" and
"Fruit Salad". This product is to entertain a small target market. But it can increase along with time and also the demand is increasing
more efficiently in international market as well. The proportion of new business is contributing 5-7% in total sales. It may increase in
future. They also doing business under the name of "Shezan Bakers and Confectionary". This business is growing rapidly now they
have 25+ outlets of Shezan Bakery.
Renewal and existing business:
Retention rate for Shezan as over all brand is much higher. Because they want to retain their market share and revenue. They were
doing well in past year 2000-2010, due to some religious allegations on shezan they lost their most market share. They continuously
trying retention strategies to retain their customers and market share as well. Now 2014 to onwards they are succeeding and increasing
their market share rapidly with the growth rate of 14 to 15% annually.

Table 2

Customer groups by industries:

Demographically if we categorize the customers on the bases of percentages, then we get to know that the kids aging up to 14 years
constitute the proportion of 36.7%, teens comprising the proportion of 59.1% and adults comprising the proportion of 4.1%.Now if we
discuss the customers on a large scale, then we can also calculate the customers in terms of the countries as well. The list and the
amount of products within the countries are defined below.

Pakistan 98,101,000
Australia 1,484,000
Europe 11,839,000
South Asia 1,075,000
Africa 27,616,000
North America 5,880,000
 Market Share:

BCG Matrix

High market share Low market share

Stars Question mark

High
growth
 Cash cows Dog

Low
growth

STAR
All Pure lies in this star quadrant because it has both the high market share and business growth as compared to rest of the products of
Shezan juices. All Pure is the best shining product of Shezan which can enhance the profitability of the company.

QUESTION MARK
The second quadrant is known as the question mark. Shezan twist and sauces lies in this category as they both have very low market
share but they have high business growth rate. To bring these two categories in the star portion the company needs a lot of effort to
better position these products as compared to the competitors

CASH COWS
The third quadrant is of Cash cow. Shezan regular juice lies in this quadrant and is categorized as cash cow because of high market
share and low business growth rate. Shezan regular juice can be milked and its profits can be reinvested in other products. Shezan
regular juice is a source of stability for the company as its profits can help the company to maintain its operations and high market
share.

Dog
The Fourth quadrant is called as Dog. Shezan syrups and Jams lie in this category as they have very low market share and a low
business growth rate. The best strategy for Shezan juice syrups is to liquidate them so that other Shezan brands don't suffer from these
syrups and for the Shezan jams the company needs a lot of effort to lift this category so that these jams can be compared with the
quality of national and salman‟s jam.

Market Size:
Market size for shezan is very big. Because in Pakistan they are targeting the whole nation, every age group and demography as well.
For international market pickles and sauces of Shezan getting the highest growth rate. International market growth rate is now higher
than the domestic growth. In past years it grows with the growth rate of 29.47% annually .
Future trends:
In future there is great potential for Shezan in both (International and Domestic) markets. They have to go with technological
advancement and brand promotion. Advancement in technology will help the company to increase its production and to decrease the
cost. Decrease in the cost will lead to more profitability. They also go with related and un related diversification. In related
diversification they have to introduce water, milk, energy drinks and malt. In unrelated diversification they must go with other
businesses like, clothing, and sports. I think that garments and sports related Pakistani items are already in the list of maximum
exporting products of Pakistan. They already have strong presence in 40+ countries in all over the world they can utilize their channel
better for making sales of these products.

Factors which influence the growth or decline in the industry:

Factors that can influence the product growth or the decline can be analyzed through the “PEST Analysis”

1)Political Factor
If government imposes heavy taxes on the industry then it badly effects the industry growth. Currently juice industry has 17 % sales
tax on it.

Labor laws

Labor laws also effect the industry and organization keep on revising the law related to labor force e.g. Laws related to child labor
and the increase he minimum of an employee salaries to Rs. 15000 such laws directly affect the industry.
Political issues

In Pakistan government faces a lot of difficulties from terrorism. Like foe instance the clashes with Supreme Court and other political
issue like corruption and Swiss bankaccounts. Problem of electricity shortage caused the mismanagement and negligence of
government. These all activities badly affect in the growth of industry.

2)Environmental
These laws also affect the industry in such a way that the industry must treat their wasted water and must not pollute the environment
through smoke. So it is compulsion for all industries to follow the laws.

3)Economic Factors

Inflation rate

The inflation rate is about 6%. So if there is increase in inflation rate than there is also increase in price of juices.

Economic growth rate:

The rate of company economic growth is 5.3%.

4)Social factors
The important social factors are as follows.
Health consciousness

As the awareness in people is rising they are become more conscious about their health.

Demographic trends

Pakistan population growth rate is 1.589% and population is 184,404,791. Birth rate is: 25.3 births/1000 population.

Death rate is: 7.06 deaths/1000 population.Such rate is good in future sales because birth rate increase.

Lifestyle Changes

Day by day people lifestyle is changing so it is very important to stay updates with those changes and take the advantage to attain and
retain the customers. Consumers adopt the trends of changing environment because of modernity as well as globalization.

5)Technology Factors

Lastly the technology also plays an important role in the product. Its factors are as follows.

New products

Business are focusing on concentric and conglomerate diversification because in present era its not possible for any organization to
exist in market for long run by providing just a single product. Organizations have to be diversifying to according to change demands
of the customers and trends.
Product Innovation

Because of globalization innovation become more necessary for the organization, people are becoming aware about the changes being
take place around them and in order to response them organization have to focus on product innovation by introducing new flavors or
change s in packaging etc.

Productivity improvement

Automation and new technology does not matter a lot but it does contribute towards the productivity and improvement. It reduces
labor cost and increase production level.

References

https://www.scribd.com/doc/96503188/Shezan-Strategic-Analysis-Planning

http://shezan.pk/blogs/

https://www.scribd.com/doc/215293027/IMC-shezan

https://fp.brecorder.com/2016/02/2016022419525/

file:///D:/L1F14BBAM0034/7th%20semsester/Consumer%20behavior/Shezan-Annual-Report-2018.pdf
https://www.scribd.com/document/24347939/Shezan-by-Waseem-Aslam

https://fp.brecorder.com/2016/02/2016022419525/https://profit.pakistantoday.com.pk/2018/09/10/that-
unmistakable-shezan-touch/