ACKNOWLEDGEMENT & DEDICATIONIn the name of Allah, the Beneficent, the Merciful We are highly grateful to Almighty Allah who gave us power to complete this project. The project was about the ICI Pakistan Ltd, Paints Business. The basic focus was to know the marketing mix strategy of ICI Paints and SWOT analysis of ICI and Berger Paints. We are very thankful to ICI Paints Business Sahiwal, for their cooperation and guidance which they grant us for completion of the project. Moreover, their timeto-time guidance in preparing project report was also been a great aid. And of course our parent’s and teacher’s encouragement cannot be ignored and we dedicate this project to our beloved parents and honorable teachers”. TABLE OF CONTENTS EXECUTIVE SUMMARY INTRODUCTION SUMMARY OF OPERATIONS REASON FOR CHOSING THE TOPIC HYPOTHESIS STATISTICAL TESTING HYPOTHESIS TESTING LITERATURE REVIEW FROM SYNTHETIC TO HYBRIDS SEEDS PROBLEM DEFINITION CORN MARKET FODDER MARKET SCOPE OF STUDY DATA COLLECTION DATA ANALYSIS OF CORN MARKET DEALERS RESPONSE GROWERS RESPONSE INTRODUCTION TO THE COMPANY ICI Pakistan continuously strives to be the “preferred choice” of allot of customers and consumers. This is a consequence of an unrelenting focus on the changing needs of our customers and proactively addressing their issues and problems. Putting a premium on innovation in product and services, maintaining stringent quality standards is the raison-deter ensuring we “deliver value to our customers”. Polyester Business’ investment in a new plant is an endeavor to improve the consistency of its product quality. The Business’ focus on customer needs led to the development of a new fiber, delivering improved performance on customer ’s lines called Polyester Viscose. Production of variants such as super white is to cater to specific needs of customers seeking innovation in their products. Our technical service team truly differentiates us in the market. Focusing on optimizing mill conditions to enhance productivity, running trials to improve quality and trouble shooting successfully has earned. ICI the reputation of being the Technical Experts. Soda Ash Business, where the customers and the industry are challenged by increasing costs, the focus has therefore been to minimize the impact. Initiatives launched in logistics and key account management for the customers have assisted them in cutting down on working capital by reducing inventor y, reduction in warehousing and storage costs and distribution expenses. Paints Business has brought to the consumer the world of colours. The introduction of over six thousand colour options, supported by our unique colour consultancy services and our colour studios have opened up a vista of imaginative colour solutions to our customers. Pioneering innovative products and services has been the driving force behind our zest for excellence. Our Automotive customers are provided with the latest in Japanese technology for their coating solutions. Working with them to the minutest detail, they have also benefited in cost reductions with conversion of supplies in bulk. Our refinish customers are trained at a state of the art Training Centre, the only one of its kind in South East Asia. Life Sciences Pharmaceuticals Division recently entered the Branded Generics Market with Cefixime, plugging the gap for high quality antibiotics at competitive rates. The launch of Cefixime would provide both the customers and the consumers a viable option for a quality third-generation Cephalosporin. Besides its affordability, each pack of ICEF comes with sterile water for reconstitution of the solution. This unique benefit gives the medical community the confidence to prescribe the drug to the patients, most of whom are not very aware of the importance of correct mixing of the product in water to achieve the required concentration. Chemicals Business has introduced customer focused Key Performance Indicators in its supply chain which are monitored to improve delivery times and facility of tracking of consignments. The focus on business development initiatives to provide cost competitive sourcing options for the customers while maintaining the quality promise has enabled ICI Chemicals to be at the forefront of introducing new products and ideas to its customer base, hence facilitating technology transfer to the local industry. We at ICI Pakistan believe that our future is dependant on the success of our consumers. We partner with them to ensure that the maximum possible potential is realized by all arranging training workshops and seminars. We continue to drive our commitment to safety, health and environment for all our customers and suppliers to ensure that our society as a whole values the importance of our lives and the need to protect the environment. To Achieve Our Mission We Will: Give our highest priority to Health, Environment and On Ethical business behaviors. ~ Make sure our product offer gives value to the customer in Dependable supply, reliability and consistent quality. ~ Make sure our service levels help us foster long-term relationships With customers and suppliers. ~ Aim to be best in class in our operating efficiencies and costs And grow the business by selectively increasing capacities And introducing new products that meet customers’ needs. ~ Develop and retain a team of capable people Who are enthused to deliver the mission? SSH&E «Nothing we do is worth getting hurt for.» Safety, Health and Security of Employees and Contractors is paramount to any other consideration. We shall act responsibly to protect the environment and participate in the well-being of the communities we operate in. We shall demonstrate respect and care while dealing with our customers, our suppliers and the general public. Valuing People «Our competitive edge.» We shall value our people – ‘our competitive edge’, respect the individual, value teamwork and, without discrimination, recognise and reward performance. Innovation «Creativity for improvement.» We shall seek new and better ways to improve products, services and processes. Business Excellence «Better, faster and best value.» We shall lead in quality, speed, and cost competitiveness. We shall maximize returns for shareholders and deliver sustainable growth. Customer Obsession «They pay our bills.» We shall understand customer needs and deliver on our commitments and show adaptability and agility in response to change. Transparency «Beyond reproach. » All our systems are transparent and can stand the test of Scrutiny. Ethics «Uncompromising integrity.» We shall demonstrate uncompromising integrity in ourbusiness dealings; be fair and honest; be free of bias; and auditable in all aspects of our business, ensuring conformity with our code of conduct and regulatory standards. • • Further investment in Soda Ash capacity expansion (65ktpa) under evaluation. Manpower productivity increased by 10%. The Company crosses the Rs. 2.0 billion mark in operating profit and profit before tax for the first time In Company’s history.* o Gross Profit up by 22% compared to last year. o Operating results and profit before taxation higher by 35% and 31% respectively over 2005. o Adjusted earning per share** up by 31% over 2005. • Record production and sales volume achieved consecutively for the second time in the Soda Ash business for both Soda Ash and Sodium Bicarbonate. Investment in three major projects at a cost of Rs 3.3 • billion: Asset Modernization and Improvement Project (AMIP) in Polyester, Soda Ash 50 ktpa expansion and acquisition of manufacturing facility of Fayzan Manufacturing Modaraba (FMM). Paints Business Performance 2006 Paints Business delivered an exceptional performance during the year 2006 with all its segments posting double-digit improvement in sales volume on the back of GDP growth and enhanced activities in downstream construction And automobile sectors. In the Decorative segment, competitive brand strategy, channel expansion and launch of new products assisted the Business in achieving higher sales volume over last year. Similarly, the Industrial segment showed a solid performance in 2006 on account of growth in Motor, Motorcycle and Tractor sectors. The Refinish segment also delivered a strong growth in sales volume compared to last year and entered the Middle East market with the commencement of commercial exports. ICI PAINTS BUISNESS ICI Pakistan paint’s business vision is to further strengthen its position as the leading paint company in Pakistan and drive its operations to world class standards with a relentless commitment to Safety, Security, Health & environment and Business Excellence. It is committed to deliver innovative products and services whilst driving improvement in processes and systems to add value to its customers, employees and working environment. The business has integrated into its workplace the values and behaviors of ICI Pakistan and these have been communicated and accepted in various interactive sessions with all employees. These values and behaviors now form the way of life for all those who work for the paints business All the three business today have embarked on programs which focus on the consumer and customer needs. The focus is to understand the needs of our major stakeholders. Pursuing research and market understanding and delivering high quality product and services form the nucleus of creating competitive advantage in the market place for the paints business. The Decorative segment of the business is driving a strategy of providing a super premium range of products with a wide color range under the Dulux brand that fulfill the growing needs of the market. Pentalite Classis was the first launch in this category. A super premium plastic emulsion with five properties of resisting hairline cracks, high scrub resistance, better flow, anti fungal and luxurious finish was very well received by the consumers, architects and painting professionals. After its initial success in the furniture market segment the Dulux Woodcare range is now available in the retail segment also. In one stroke the consumer can now get the shade of wood that he or she wants. Expanding and improving service levels have been the major thrusts of the Decorative business. After the great success of the first color studio in Karachi a second color studio was opened in Islamabad. Now consumers in Islamabad also have the platform to experiment with colors, come up with new contrasts and combinations that reflect their persona and lifestyle projecting their color aspirations into their living environments. The housing and the color consultancy team has been re structured with more feet on the street and proper training to help consumers with new color trends and interior design solutions. The Industry & Automotives coatings business of ICI paints besides gaining strength in the local market also aspires to become a regional player. Self leveling epoxy floor coatings have been the new addition in the product portfolio and have been well received by major customers. After the initial success of the Turn-Key project management concept with one of the leading customers where a one shop solution in terms of design, fabrication and commissioning of automotive paints is done by ICI, the business is now offering it to other customers also. The Refinish business continues to grow in the local market. It also set sights on becoming a regional player. The top coat color range was launched under the Dulac Auto paints umbrella along with all its ancillaries. To cap on the mid and low tier thinner market an acrylic thinner was launched in mid tier and a GP thinner was launched in the low tier. In pursuance of its channel strategy to increase its numeric coverage the business expanded its network to 491 dealers while 12 additional SSS dealers were made in 2006 DEFINATION OF PAINT “Coatings applied to a surface or substrate to hide, decorate, protect and perform other specialized function” PAINTS CLASSIFICATION Paint Solvent borne Waterborne Decorative Refinish Motor & Industry Decorative COMPONENTS OF PAINT Pigments Binder COMPONENTS OF PAINTS Solvent Additives PRODUCT RANGE (Under Coats) • Dulux -Dulux Prime-on -Dulux Wall Putty Water Based -Dulux Red Oxide Primer -Dulux Universal Primer Grey DECORATIVE PRIMERS (Under Coats) • Glidden -Glidden Ultra Prime -Glidden Wall Putty Water Based -Glidden Wall Putty Solvent Based -Glidden Red Oxide Primer Decorative Solvent Borne Products (Top Coats) • Dulux Range -Dulux Gloss Finish -Dulux Matt Finish -Dulux Metallic Finish • GLIDDEN RANGE -Glidden Hi Gloss -Glidden Ultramatt DECORATIVE WATER BORNE PRODUCTS (Top Coats) O DULUX RANGE -Dulux Weathersheild -Dulux Pentalite -Dulux Supercoat -Dulux KidZone -Dulux Contract Emulsion -Dulux Texture Finish DECORATIVE WATER BORNE PRODUCTS (Top Coats) • GLIDDEN RANGE o Glidden Duraguard o Glidden Ultra hide o Glidden Ultratex Decorative Water borne Products (Top Coats) • NON DULUX NON GLIDDEN RANGE o Paintex o Maxilite o ICI Vinyl plus Distemper Decorative Wood Care Products • SURFACE PREPARATION PRODUCTS -Filler -Sealer o STAINS -ICI Woodcare Stain -30 Shades O TOP COAT -ICI Woodcare Lacquers -Matt Lacquers -Full Gloss Lacquers o Thinner -ICI Woodcare Special Thinner OTHER PRODUCTS • • • DULUX WARNISH DULUX ALUMINUM DUAL PACK DULUX WATER REPELLENT MASTER PALLATE (6,134 Colors) • • • • PENTALITE CLASSIC WEATHER SHIELD GLOSS FINISH MATT FINISH Marketing Mix Strategy Usually firms do a considerable amount of research to identify markets and define segments. Among the many questions market research seeks to answers, one of the most important is the sales potential of particular market segments. To determine sales potential a firm must forecast demand in its targets markets. The results of demand forecasting will indicate whether the segments are worth pursuing, or whether alternative need to be identified. Next the management must design the marketing makes. The combination of product how it is distributed and promoted and its price. Together these four components of strategy must satisfy the needs of the target markets. Some of the challenges facing marketing managers in developing a market mix are o Product, Strategies are needed to decide what products to offer managing existing products over time and dropping failed products .Strategic descions must also be made regarding, branding, packaging and other product features such as warranties o Price, Setting a price for a product is a marketing decision. Other necessary strategies to changing pricing related items within a product line tons of a sale and possible discounts o Place Here strategies relate to channels by which ownership of products is transferred from producer to customers and in many cases the means by which goods are moved from where they are produced to which they are produced to the final customer. In addition strategies applicable to any middle man such as whole sailers and retailers. o Promotion Strategies are needed to combine individual methods such as advertising, personal selling and sales promotions into an integrated communications campaign. In addition promotional strategies must be adjusted as product move from the early stages to the later stages of life. The four marketing mix elements are interrelated decisions in one area affect actions in another. To illustrate design of marketing mix is certainly affected by whether a firm chooses to compete on the basis of price or on one or more other elements .When a firm relies on price on its primary competitive tool .the other elements must be designed to support aggressive pricing. For example, promotional campaign likely will be built around a theme of “low, low price,” In non price competition how ever product, place and promotion strategies come to fore front. Each marketing mix elements contains countless alternatives. For instance a producer may make and market one producer or many ,and producer may be related or unrelated to each other. They may be distributed through wholesalers and retailers without the benefits of wholesalers, or even directly to final customers. Ultimately from the multitude of alternatives, management must select a combinations of elements that will satisfy target markets and achieve organizational and marketing goals. Like many areas of business marketers some times face seemingly contradictory goals .The desires to satisfy customers , For example may seen to conflict with a particulars revenues or profits objectives. When this occurs ethical predicaments may arise .Thus ethics in marketing deserves our attentions. ICI, S PAINTS MARKETING MIX STRATEGY Like other companies ICI Paints, Decorative Division also focused on the marketing mix strategies. It becomes obvious to design such a market mix strategy which can helpful in achieving organizational objectives and first and foremost objective of organization is to maximize its profits. We will now explain how ICI Paints formulates its Market Mix Strategies. 1. Product • MAINTAIN AND MANAGING THE EXISTING PRODUCTS First and foremost priority of the company is to maintain the standard and quality of the existing product which are already in the markets. Their manufacturing, meeting demands of the market had become a great challenge for the company. And the main thing which is taken in to account before getting the product out of the gate of Factory is to maintain the quality of every single pack of the product. With time to time increasing demand, it had also become essential to maintain the supply chain. Many of the raw materials are imported from several countries. They are chemicals so their transportation through air services is not feasible so they are usually mobilized through ships. So when there is such expended inflow of raw materials and outflow of product, it becomes a challenge to manage it. • IDENTIFYING DEMAND Secondly the step goes what is the current need of the market. Today is the world of change, and only change is the continuous phenomena in this world. Several needs were identified in the market through research and the products were launched by keeping the demand of the customers. Paint which overcome the hairline cracking. Dulux Pentalite Classic (for interior) was launched. ICI’s R&D worked on this problem and ultimate find the solution to it. Dulux Pentalite Classic was launched as a new product with additional features of high scrub resistance, better flow and luxurious finish. ICI was pioneer in finding solution to this common problem and offered a better value added product to their customers. Paint which resists alkali, salts. Still Research and Development is working on the paint which can resist the alkali, salts and evaporation of water from the walls. This is one of the main demands which are lying in the market of paint. Almost every customer had to face this problem. It’s the fact that the company which will encounter this problem and find the real remedy to this problem will be appreciated and welcomed by the customers and this can help to maximize its profits. There is a strong competition between the paint manufacturing companies to find the solution to this problem. Exterior paint which gives smoothness and luxurious finish like interior paint. “World of weather shield” was launched. First time in the history, an exterior putty and exterior primer which was having an additional feature of being waterborne was introduced by ICI Pakistan Limited. The credit goes to R&D. Paint which gives mirror like finish Dulux Gloss Finish was introduced. Paint which give non-yellowing White The above mentioned product which was launched to give the mirror like finish was with additional feature of having non-yellowing White. Paint which has fragrance. Dulux Special Plastic Emulsion was launched. Oil base paint which has no smell Once again, for the first time in the world, oil paint was launched by ICI Pakistan Limited with no smell. The paint gives no smell like ordinary paints. This product was very successful and collected a lot of appreciation of customers. Recently a new range is launched with a ver y demanding need of customer which is “ODOURLESS”. As we often experience that when even 1 room of our home is painted, a specific smell starts to come and it’s pinching. Especially when Matt is applied in any room, it’s impossible to sleep in that room before 4 or 5 days. And it also causes irritation in eyes.So in the process of value addition of ICI, a new range was launched with the additional and separate feature of ODOURLESS. It is available in Dulux Matt Enamel, Dulux Enamel and Dulux Pentalite Classic. Exterior paint which retains its shade for long time Dulux Weathersheild Fresh was launched with the features of Fungus guard, Color lock and Dirt Guard. 2. Price As far as the pricing is concerned it is the most difficult decision because keeping all the things on one side price matters. ICI Paints is promoting different brands on different prices according to the market segmentation. Dulux is the most expensive brand in the market. The reason is that the best raw material and components are used in the manufacturing of the Dulux. Second reason is that Dulux target market is upper tier. And to some extend upper tier of middle tier. But paying more for Dulux , customer feels value . If we compare the price of Dulux with other local brands , it’s the fact that price difference is not more than 20-100 rupees. As far as quality is concerned , by paying more customer is not worried about the quality . For the market which is middle tier, ICI’s brands Paintex Emulsion and Glidden are the brands with low price and optimum quality within the tier. If we go into the comparison of Paintex and Glidden their price is low then the other paint brands selling in the market. Glidden is purely priced to cover the buying power of middle tier. The price of the products in which ICI is having technological edge over competitors is comparatively high. The reason is that ICI is enjoying state of monopoly for that product. There is no product in the market to encounter them. The price of Dulux Weathersheild Fresh is Rs. 1050/-, others companies brands offered in the market are 300-400 Rs less than Weathersheild Fresh. Same is the case with Dulux Gloss Finish and Dulux Matt Enamel Odourless Range. The price is Rs. 300-400 more as compared to other brands. So pricing factor vary from brands to brands and target market. 3. Placement / Distribution The overall ICI Paints products are manufactured in ICI Paints Lahore. For all Pakistan stocks dispatch is carried out from factory warehouse. There are further 5 warehouses in the country. • • • Lahore Islamabad Multan • • Karachi Quetta The distribution channel includes Distributors and Dealers/ retailers. The Pakistan is divided into 4 Regions. • • • • Upper Lower Punjab Center Punjab Lower Every region is headed with Regional Sales Manager and in every Region there are further Area/ Territories. The supply activities are carried out with keeping the region and areas. One region cannot carry out supply in others region same in the case with areas/ territories. The product is only delivered to the company approved dealer or distributor. Distributor can sale to the customer which is not approved dealers of the company. Main consumption of paint is on dealer/retailers counter. The delivery is made through 2 modes • • Distribution Vehicles Freight On Road ( goods transportation service) By these 2 means ICI manage the distribution and placement of their products to be available for their customers and consumers. 4. Promotion Before getting a product into the market, ICI’s culture is to invite its business partners (dealers/distributors) to give them orientation regarding new product what ICI is going to launch, with what features and how it will work. After this first step when product is introduced to the business partner’s second step is its promotion how the promotion is done. • • • • • • • • • • T.V Advertisement on different channels Radio Advertisement , F.M 100 Bill boards almost in every big city Posters / Banners Small gifts for dealers/distributors to push new product sale Small gifts for painters / contractors who are labor force who apply paint Painters party to introduce them new product T – Shirts printed with product logo on them Caps Key chains The sales team is assigned a target the placement of the new product on every counter. With the help of direct marketing, ICI employees gives orientation to the customers and Painters that what the new product is and what features it has. Currently T.V commercial of ICI Dulux Odourless, in on air on different T.V channels. SWOT ANALYSIS A method of analyzing an organizations competitive situation that involves assessing organizational Strength (S) and Weaknesses (W) as well as environmental opportunities (O) and Threats (T). Before we go through the SWOT analysis, first of all let’s identify the competitors of ICI Paints. ICI is still enjoying a reasonable percentage of market shares. Still ICI do not consider any company its competitors but the company which is chasing ICI is Berger Paints. Berger is the only company which has some how reasonable market share, as main share of the paints market goes to the local paint manufacturers. Now we will made assessment through SWOT analysis of both ICI Paints and Berger Paints. STRENGTH ICI Paints • More than 80 yeas of experience in the paints industry. • • • • Multinational PLc U.K World renowned chemicals and paints manufacturers. Having production setup in more then 55 countries. Popularity of ICI is much • • Company • • Berger Paints Gained period. Comparatively fast supply of the products. Having 2 manufacturing reasonable market share in very short time plants as ICI had only 1 which helped in improving the delivery of goods. Good discounts and more due to its thousands of other products rather then paints. • • • Having product which has no competitors. Laid new histories in the paint industries. Business volume is very high as compared to the competitors. • Focuses Safety, Security, Health and Environment as a corporate social responsibility. incentives Paints. for business partners as compared to ICI WEAKNESS ICI Paints • • Very low discounts for business partners. Comparatively less convenient delivery of the products as the business partners are in 1000,s. • Meeting demand becomes challenge in the • • • • • Berger Paints Poor dealer network as compared to ICI. Complaint often arises in the product while applying. Low range of products. None of the product which can be said better then ICI Lack of policy. season. • Come under the definition of local brand as it is claimed by Berger that they are Multinationals. • Lack of formulating competent strategies. THREATS ICI Paints • Threats to the new entrants in the market. e.g. Nippon Paints Japan has entered the market of Pakistan • • Political stability of the Pakistan Economic Stability • • • Berger Paints Threat to the expanding market of ICI Paints. Threats to the other new entrants in the paints market e.g. Nippon Paints Japan has entered the market of Pakistan Economic and Political stability has also become a threat to almost all companies either national or multinationals to carry out their business operations in the Pakistan. • Threat of the new innovative products of the competitor like ICI is having its products in market which have no competitors and gained popularity and market share. OPPORTUNITY ICI Paints • Pakistan is developing country and there is a lot of business growth in this country. So seeking new markets in this area is great opportunity. • In developing countries, there is always opportunity for • • maintaining sustainable growth, so it’s also in Pakistan. • Keeping the need of the market, still there are some products which are not offered by ICI. That product also weights share so a by considerable • • Berger Paints Berger should formulate its strategies and develop its product keeping in view about the growth opportunity in this country. Extensive research on different problems can lead to launch of products which are in demand by market. Maintaining the quality is key to success in the paints market. Still Berger has a long way to go ,so they should cover the new technological gaps which can lay them down. launching these products ICI can improve its market share. • Finding solutions to the painting problems can also help to grow. Such product are still absent in the market which can gain the attention of customers. So to work on those problems lead to a great opportunity. • Low price products can allow gaining a good market share. So cost cutting should focused. CONCLUSION ICI Pakistan Limited is one of the leading companies. ICI Pakistan's Paints Business is one of the largest in the country, which started with the acquisition of Fuller Paints (Pakistan) Limited. The business manufactures paint for the Decorative, Refinish and Industrial segments. In Pakistan they are enjoying a state of monopoly but there is always an opportunity some where. ICI has consistently developed new and innovative areas of businesses. ICI’s paints brands are some of the most successful in the world. ICI Should focus to encounter the new off shore paint companies which are entering in the market of paints. No doubt, some of the brands of ICI are exclusive in the market and still have no competition, but along with this the low price and high quality products should also be in the market. The fact that Research and Development of ICI had brought today to the current position and set milestones for other companies to follow.