Marketing Theory and Practice

Assignment no 1

Prepared By
Awais Ali Arshad MBT-FA11-157

Prepared By
Feburary 25
th
2013
Submitted to
Bilal Javed


PEST analysis

INTRODUCTION:-
PEST analysis is concerned with the environmental influences on a business.
The PEST stands for the Political, Economic, Social and Technological issues that could affect
the strategic development of a business.
Identifying PEST influences is a useful way of summarizing the external environment in which a
business works.
Definitions and importance in different perspectives


The constituents of PEST can be considered as macro-environmental factors and its usefulness
lies in the assumption that the success of a particular organisation or management solution
cannot be understood without having the information relevant to the specific business
environment (Buchanan and Gibb, 1998).

Business environment could be defined as all relevant physical and social factors outside an
organization that are considered into decision-making process (Duncan, 1972).

According to Ward and Rivani (2005) PEST analysis assumes that specific external and indirect
circumstances that characterize the business environment are able to influence organizational
capacity to produce value. Hence, PEST analysis provides a satellite view to assess the
external environment (Ward and Rivani, 2005).
PEST analysis Use

PEST has been conventionally used in two different ways: first, to analyze the position of a
particular organization (e.g. Vrontis and Vignali, 2001) or industry sector (e.g. McManus et al.,
2007: 19-36) within a particular business environment; second, to analyze the viability of general
management solutions in a business environment (e.g. ESCWA, 2005).
Coca cola
Our Vision

To become a market leader in ready to drink segment while adding best-in-class value to all stakeholders.
Our Mission

Coca-Cola Pakistan exists to refresh the consumers, inspire moments of optimism through our brands and
actions as well as benefit all stakeholders, which we will do with highest social responsibility and with
uncompromising commitment towards quality of our products and integrity in our operations











Our Values


Our Core Values underlie everything we do. We live by them for two reasons; they are good and right in
themselves, worthy of adherence even at the risk of loss of profit-making opportunities, and they
epitomize our Companys integrity, which we believe will produce value for our stakeholders over the
long term.
Accountability We act with high sense of responsibility and hold ourselves acountable.
Passion We put our hearts and mind into what we do.
Integrity We are open, honest, ethical and we trust and respect each other
Teamwork We collaborate for our collective success


POLITICAL FACTORS
POLITICAL FACTORS, ARE HOW AND TO WHAT DEGREE
A GOVERNMENTINTERFERENCE IN HIS ECONOMY. SPECIFICALLY, POLITICAL
FACTORS INCLUDE AREAS SUCH AS
TAX POLICY
Pakistan
Income Tax Rate 20%

Pakistan
Corporate Tax Rate 35%

Pakistan
Sales Tax / VAT Rate 16%
Coca cola hired local resident tax manager to cope up with Pakistani taxation policy.
BASIT AHMAD Tax Manager at Coca-Cola Pakistan & Afghanistan Region Office. Coca cola
increased its prices accordingly to shift burden of taxes.
LABOR LAW
An essential ingredient in every one of our products is our profound commitment to human
rights and workplace rights. Respecting human rights and protecting workplace rights is
fundamental to our culture and imperative for a sustainable business. In our Company and across
our system, we are working to make sure all people are treated with dignity and respect. .We also
Implement the United Nations Guiding Principles on Business and Human Rights while
following Pakistani rules which are
Factories Act 1934
Punjab Factories Rules 1978
Industrial and Commercial Employment Ordinance 1968
Provincial Employees Social Security Ordinance 1965
Employees Old Age benefits Act 1976
Payment of wages Act 1936
Minimum Wages Ordinance 1961
WP Minimum wages for unskilled worker Ordinance 1969
Worker Children Education Ordinance 1972
Worker Welfare Fund Ordinance 1971 (Benefits Under Law)
Workman Compensation Act 1923
Employment of Children Act 1991
Company Profit (Worker Participation Act 1968)
Industrial Relation Act 2010
West Pakistan Maternity Benefit Ordinance 1958
Bonded labor System (Abolition) Act 1991
An essential ingredient in every one of our products is our profound commitment to human
rights and workplace rights. Respecting human rights and protecting workplace rights is
fundamental to our culture and imperative for a sustainable business. In our Company and across
our system, we are working to make sure all people are treated with dignity and respect.
But on the other side
Coca-Cola: foul play in Multan by world cup sponsor
Greets new union with death threats, abduction, extortion and dismissals
TRADE RESTRICTIONS
THERE ARE NO TRADE RESTRICTIONS IN PAKISTAN
TARIFFS
1. Here are customs tariffs on import of Waters, including mineral waters and aerated
waters, containing added sugar or other sweetening matter or flavoured, and other
non-alcoholic beverages, not including fruit or vegetable juices,

Customs duty = 35%
Sales Tax = 16%
Add Sales Tax = 3%
Income Tax = 5%

In some sort of beverages & drinks you also need to pay
Federal Excise duty = 12% (If retail price is mentioned on Goods)
Or
Federal Excise duty = 40% (If retail price is not mentioned on Goods)

POLITICAL STABILITY
For the first time in history of Pakistan PPP have completed its tenure but now in Baluchistan,
queta , Peshawer and leari are those areas where government is unstable and elections are
expected to be held in Pakistan.
Now there is care take Government in Pakistan. Pakistan inching toward political uncertainty
ECONOMIC FACTORS
Here the coca cola analyze the economy of Pakistan and know how the
economic factors are influence on company the factors may be include of
Economic growth,
The Gross Domestic Product (GDP) in Pakistan expanded 3.67 percent in the fiscal year 2011-12
from the previous year. GDP Growth Rate in Pakistan is reported by the Pakistan Bureau of
Statistics. Historically, from 1952 until 2012, Pakistan GDP Growth Rate averaged 5.0 Percent
reaching an all time high of 10.2 Percent in the fiscal year of 1953-54 and a record low of -1.8
Percent in the fiscal year of 1951-52. Pakistan is one of the poorest and least developed countries
in Asia. Pakistan has a growing semi-industrialized economy that relies on manufacturing,
agriculture and remittances. Although since 2005 the GDP has been growing an average 5
percent a year, it is not enough to keep up with fast population growth. To make things even
worst, political instability, widespread corruption and lack of law enforcement hamper private
investment and foreign aid.
PAKISTAN INTEREST RATE
The benchmark interest rate in Pakistan was last recorded at 9.50 percent. Interest Rate in
Pakistan is reported by the State Bank of Pakistan. Historically, from 1992 until 2013, Pakistan
Interest Rate averaged 12.75 Percent reaching an all time high of 20 Percent in October of 1996
and a record low of 7.50 Percent in November of 2002. In Pakistan, interest rates decisions are
taken by the State Bank of Pakistan. The official interest rate is the discount rate. This page
includes a chart with historical data for Pakistan Interest Rate .this thing affected
Exchange rates
1 US Dollar equals 98.20 Pakistani Rupee
PAKISTAN INFLATION RATE
The inflation rate in Pakistan was recorded at 8.10 percent in January of 2013. Inflation Rate in
Pakistan is reported by the Pakistan Bureau of Statistics. Historically, from 1957 until 2013,
Pakistan Inflation Rate averaged 8.04 Percent reaching an all time high of 37.81 Percent in
December of 1973 and a record low of -10.32 Percent in February of 1959. In Pakistan, most
important categories in the consumer price index are food and non-alcoholic beverages (35
percent of total weight); housing, water, electricity, gas and fuels (29 percent); clothing and
footwear (8 percent) and transport (7 percent). The index also includes furnishings and
household equipment (4 percent), education (4 percent), communication (3 percent) and health (2
percent). The remaining 8 percent is composed by: recreation and culture, restaurants and hotels,
alcoholic beverages and tobacco and other goods and services. This page includes a chart with
historical data for Pakistan Inflation Rate.
Pricing strategy
Pakistan inflation rate is affecting the consumer purchasing power of consumers.
This pricing strategy makes consumers perceive the products to be affordable. They have had the
privilege of a worthy competitor constantly driving them to be smarter, faster, and better. Coca
Cola planned to use the lower price point to penetrate new cities that were especially price
sensitive. The carbonated soft drink market in Pakistan is nearly 57% of the total beverage
market there.
Position support Pricing
Coca Cola has been doing continuous focus on its price related positioned. With the help of
experience of over the years coca cola has finally emerged with the best marketing strategy of its
time and successfully maintained its position as an affordable enjoyment .
Consumer protection
Consumer Rights Commission of Pakistan (CRCP) is a rights-based civil initiative registered
under the Trust Act, 1882. Established in 1998, CRCP is an independent, non-profit, and non-
governmental organization. It largely works through local fund-raising and engaging volunteers.
It is not supported by any industry or commercial sector. It is the first national consumer
organization in the country, which approaches the issue of consumer protection in
comprehensive and holistic terms. Its vision and strategies have significant cross linkages with
both market practices and issues of governance
Coca cola is following and meeting all international and Pakistani consumer rights.
SOCIOCULTURAL FACTORS.

IN THE SOCIOCULTURAL FACTORS THE COCA COLA COMPANY WILL ANALYZE
THE SOCIAL FACTORS INCLUDE THE
HEALTH CONSCIOUSNESS
RESULTS
A total of 393 patients were surveyed. The majority were young married men, in either private or
government service (Table-I). Respondents preference for consumption or otherwise, of fats and
oils, sweets, spicy foods, salt, fruits and vegetables, tea, coffee, cola drinks and alcohol are listed
(Table-2).
Table-1: Demographic Profile of the Study Population (n=393)
PARAMETER NUMBER (%)
SEX:
Males
Females

254 (65)
139 (35)
Mean Age in Years SD 32.912.13
Marital Status:
Single
Married
Others
(Divorced/widowed)

144 (37)
245 (62)
4 (1.0)
Educational Status:
Illiterate
Primary
Secondary
Matriculation

13 (3.0)
18 (5.0)
38 (10)
65 (16)
Intermediate
Graduate
Post-graduate
Diploma
102 (26)
117 (30)
35 (9.0)
5 (01)
Occupational status:
Private service
Government service
Self employed
Unemployed
Student
Laborer
Othersincluding
housewives

124 (32)
25 (6.0)
36 (9.0)
12 (3.0)
76 (19)
35 (9)
85 (22)
Table-2: Respondents attitude towards consumption of food and drink items (n=393)
Food/Drink Item
Prefer to consume Avoid consumption
Do not
prefer/avoid
Number % Number % Number %
Fats & Oils 103 26 63 16 227 58
Sweets 84 22 72 18 237 60
Spicy food 86 22 56 14 251 64
Salt 110 28 27 7 256 65
Fruits &
vegetables
239 61 16 4 138 35
Tea 319 81 70 18 4 1
Coffee 117 30 271 69 5 1
Cola drinks 253 64 134 34 6 2
Alcohol 13 3 371 94 9 3

Respondents practices with regard to hand washing, brushing of teeth, preventive
dental check-up, duration of sleep, water consumption and eating of fish are listed (Table-
3) Respondents status with regard to chewing of tobacco and betel nuts is listed (Table-4).
DISCUSSION
The demographic profile of the study population shows, that the majority of the
respondents were well educated and better placed socio-economically, then the rest of the
population in general. This is a limitation in the study since the more affluent and better
educated people use the facility.
Table-3: Respondents status of healthy practices (n=393 )

Table4: Respondents status of chewing tobacco and betel nuts (n=393)
Status of Tobacco/betel nut
chewing
Number %
Tobacco chewing
Yes
No

69
324

17
83
Betel nut chewing
Yes
No

79
314

20
80
Total 393 100

Waris Qidwai, Danish Saleheen, Sadia Saleem, Marie Andrades, Syed Iqbal Azam
Community Health Sciences, Family Medicine Division, The Aga Khan University, Karachi, Pakistan

POPULATION GROWTH RATE,
Population growth rate: 1.551% (2012 est.)
Definition: The average annual percent change in the population, resulting from a surplus (or
deficit) of births over deaths and the balance of migrants entering and leaving a country. The rate
may be positive or negative. The growth rate is a factor in determining how great a burden would
be imposed on a country by the changing needs of its people for infrastructure (e.g., schools,
hospitals, housing, roads), resources (e.g., food, water, electricity), and jobs. Rapid population
growth can be seen as threatening by neighboring countries.
Source: CIA World Factbook - Unless otherwise noted, information in this page is accurate as of
July 26, 2012
Population
190,291,129 (July 2011 est.)


Age structure
0-14 years: 35.4% (male 34,093,853/female 32,278,462)
15-64 years: 60.4% (male 58,401,016/female 54,671,873)
65 years and over: 4.2% (male 3,739,647/female 4,157,870) (2011 est.)
Median age
total: 21.6 years
male: 21.5 years
female: 21.6 years (2011 est.)
Population growth rate
1.551% (2011 est.)
Birth rate
24.3 births/1,000 population (2011 est.)
Death rate
6.8 deaths/1,000 population (July 2011 est.)
Net migration rate
-2 migrant(s)/1,000 population (2011 est.)
Urbanization
urban population: 36% of total population (2010)
rate of urbanization: 3.1% annual rate of change (2010-15 est.)
Major cities - population
Karachi 13.125 million; Lahore 7.132 million; Faisalabad 2.849 million; Rawalpindi 2.026
million; ISLAMABAD (capital) 832,000 (2009)
Sex ratio
at birth: 1.05 male(s)/female
under 15 years: 1.06 male(s)/female
15-64 years: 1.07 male(s)/female
65 years and over: 0.89 male(s)/female
total population: 1.06 male(s)/female (2011 est.)
Infant mortality rate
total: 61.27 deaths/1,000 live births
male: 64.51 deaths/1,000 live births
female: 57.88 deaths/1,000 live births (2011 est.)
Life expectancy at birth
total population: 66.35 years
male: 64.52 years
female: 68.28 years (2011 est.)

CAREER ATTITUDES


New expected investment of Coca Cola pakistan
It was an announcement made so quietly that it did not even make the headlines: having
already invested $172 million in Pakistan this past year, The Coca Cola Company one of
the worlds largest beverage companies is planning on investing another $248 million in
the country over the next two years.
It may have something to do with the fact that Pakistanis are estimated to have spent
approximately Rs110 billion ($1.3 billion) on carbonated beverages in 2011, according to an
analysis by The Express Tribune based on figures compiled from industry sources. Coca Cola
currently enjoys a 30% market share, second only to arch-rival PepsiCo.
We see great potential in Pakistans future, which is why the company is investing significantly
in upgrading infrastructure and adding value to allied industries, said Rizwan Khan, general
manager for The Coca Cola Company in Pakistan and Afghanistan.
The money will be spent on two new bottling plants, one each in Karachi and Multan, as well as
investing in more coolers, which will be distributed amongst retailers to help with the companys
retail sales efforts. Company officials were quick to point out that the investment is not simply
the recycling of profits and cash flows from existing operations in Pakistan, but green-field
foreign direct investment that will flow into the country over the next two years.
The expansion plans come as rising demand makes it difficult for Coca Cola to keep pace with
its existing production capacity in Karachi and Punjab. The new plants will follow the
establishment of a Coca Cola facility, already completed in 2011, which manufactures Coke
cans. Previously, Coca Cola used to import cans from its factories in other countries.
Coca Cola
Consumers become more health conscious then company lunch new product to
address consumer needs, such as diet coke and coca cola zero.
Workplace Diversity
Diversity is at the heart of our business. We strive to create a work environment that provides all
our associates equal access to information, development and opportunity. By building an
inclusive workplace environment, we seek to leverage our global team of associates, which is
rich in diverse people, talent and ideas. We see diversity as more than just policies and practices.
It is an integral part of who we are as a company, how we operate and how we see our future.
Social responsibility in coca coal
Fahad Qadir, Director Public Affairs, Communications for Pakistan, Afghanistan Region
Coca-Cola

Muhammad Yasir is
Daily Times Business Reporter

Fahad Qadir has been with
Coca-Cola for nearly five years. He leads the ongoing stakeholder engagement with the
government, media, non-governmental organisations (NGOs) and others. He also manages the
corporate and brand personal relation (PR) strategy and Coca-Cola's corporate social
responsibility (CSR) programme.
As a result of his advocacy for socio-economic development of local communities in Pakistan,
Coca-Cola has initiated various projects to support environment conservation, education and
rehabilitation of physically challenged.
Qadir is leading key PR projects for Coca-Cola's Eurasia and Africa Group, comprising 92
countries. He is a member of International Government Relations Network of the company and
leads Partners for a New Beginning (PNB) projects in Pakistan.
Prior to Coca-Cola, Qadir worked for Lahore University of Management Sciences and Din
Media Group.
In honorary capacity, he advises NGOs like Lahore Businessmen Association of Rehabilitation
of Disabled and CARE. He was also a key member of American Business Forum's founding
committee.
Technological:-
Government spending on research
1. Pakistan spending less than two percent of budget on research
KARACHI (May 24 2007): Pakistan is among 162 countries in the world for contributing less than two percent of the budget
on research, which is the major reason for deterioration in economics and technology.

Research and development expenditure (% of GDP) in Pakistan
The Research and development expenditure (% of GDP) in Pakistan was 0.46 in 2009, according to a World
Bank report, published in 2010. Expenditures for research and development are current and capital
expenditures (both public and private) on creative work undertaken systematically to increase knowledge,
including knowledge of humanity, culture, and society, and the use of knowledge for new applications. R&D
covers basic research, applied research, and experimental development.This page includes a historical data
chart, news and forecasts for Research and development expenditure (% of GDP) in Pakistan.

Energy use and cost
Demand for CNG has grown 40% annually, while domestic CNG production has increased only 7%,
according to government figures cited in media reports.
The combined output of the Sui northern and southern gas pipeline companies, the countrys only CNG
producers, is 1,900 to 2,000 m cubic feet (MMCF) per day while consumption is 2,800 MMCF, said Saqib
Arbab, deputy chief engineer of Sui Northern Gas Pipelines Ltd. (SNGPL).
Electricity shortfall
2. The electricity shortfall in the country has risen to 5,800MWs. According to PEPCO sources, presently
7,500MWs of electricity were being generated while the demand had soared to 13,300MW.

Energy resource of coca cola
Coca-Cola announces participation in MARCON 2012
KARACHI: Coca-Cola Beverages Pakistan Ltd (CCBPL) announced the successful conclusion of their
participation in the MARCON 2012 and the expansion of CCBPLs Corporate Social Responsibility (CSR)
programmes in Pakistan.
The CCBPL involved in the Resettling The Indus (RTI) project. Zohair Mahmood, Director of CCBPLs
external affairs, highlighted the importance of the project and the people of Sindh and Punjab whose homes
were being rebuilt.
3. 9. Internet!
4.
Pakistan has highest growth rate of internet users in region
5.
6. With over 20 million internet users in Pakistan, the country now also has 1.79 million broadband
users, with an addition of 65,000 in the month of December, 2011 alone. Pakistans growth rate of
internet users is second highest in SAARC countries in accordance with its population, as it standing at 16.8
percent as compared with 28.3 percent of Maldives.
of HFC users is 37, According to the latest stats issued by Pakistan Telecommunication Authority (PTA), the
number of DSL subscribers has risen to 792,397, while the number WiMAX internet users has grown to
459,790. The number 491 and 7,215 users were recorded as FTTH subscribers in December.
So coca cola is using internet marketing and social sites awareness like on facebook, tweeter etc

References
http://www.defence.pk/forums/social-issues-current-events/69796-coca-cola-pakistans-worker-
exploitation-harassment.html#ixzz2MAioFDvI
http://www.dailytimes.com.pk/default.asp?page=2012%5C03%5C30%5Cstory_30-3-
2012_pg5_10

http://www.viewpointonline.net/fulls...&y=2010&m=july
ww.coca cola Pakistan.com
http://world-politicsreview.blogspot.com/2013/01/pakistan-inches-toward-political.html
http://www.defence.pk/forums/economy-development/5497-pakistan-spending-less-than-two-
percent-budget-research.html#ixzz2M5OFMIzD
http://www.defence.pk/forums/economy-development/5497-pakistan-spending-less-than-two-
percent-budget-research.html#ixzz2M5O73cXr