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TABLE OF CONTENTS

EXECUTIVE SUMMARY VISION MISSION STATEMENT HISTORY OF PEL PEL COMPANY STRUCTURE: COMPETITION: Direct competitor of PEL Indirect competitor of PEL SWOT Analysis OBJECTIVES OF PEL STRATEGIC MARKETING PLANNING: BCG Matrix Strategies of PEL MARKET SEGMENTATION 11 13 13 04 04 05 10 01 02 02 02 03

TARGET MARKET POSITIONING MARKETING MIX Features of product line Product life cycle PRICING PROMOTION: Promotional Strategies of PEL Methods of promotion Advertising PLACE Conclusion & PRODUCT MIX

14 15

16 17 17

18 18 19 20 21

EXECUTIVE SUMMARY
PEL and PEL appliances fall under the Saigon Group of Companies. PEL has long been known in Pakistan as a company that produces quality products. PEL has created a brand loyalty among its users and the company credits that to its high quality and vast product range. PEL has been continuously adding new products to its range. As a result, PEL has registered a significant increase in its sales volume, during the last ten years. One sector in Pakistan that has grown considerably in the past is the Home Appliances Division.

There is great competition in this sector and PEL has survived this competition with great flair. PEL enjoys good reputation in the market for its home appliances. PEL is in a growth phase in this sector. This sector carries a lot of potential and PEL can capitalize on this fact.

My stay at PEL was very beneficial due to the fact that I got the opportunity to learn the trends in the market in this sector. The company takes it as a liability to take care of its employees. The corporate culture at PEL was very healthy and induced work habits. This atmosphere helped me in building self-confidence and belief. At PEL I had an opportunity to deal directly with the customers and find out their demands and problems associated with PEL.

I got to know about the trend in the industry and also conducted a research through which I got a better understanding of the consumer buying behavior.

I also got a chance to improve my decision-making skills. Further more, working at PEL also helped me in becoming a better time-managed person. I got to know the importance of teamwork at the work place.

In the end, all the experience that I have gained during my stay at PEL has helped me a lot in becoming a better organized person and will definitely help me in becoming an even better person in the future. I can say this with out doubt that the values that I have gained while working at PEL will be applied to wherever I go to work in the future.

Vision
To excel in providing engineering goods and services through continuous improvement

Mission
To provide quality products & services to the complete satisfaction of our customers and maximize returns for all stakeholders through optimal use of resources. To focus on personal development of our employees to meet future challenges. To promote good governance, corporate values and a safe working environment with a strong sense of social responsibility.

History of PEL
Pak Electron Ltd. (PEL) was established in 1956 with the technical collaboration of M/S AEG Germany and is the oldest composite electrical equipment manufacturing unit in Pakistan. In October 1978 the company was taken over by the SAIGOL GROUP, which is one of the leading industrial and commercial groups of Pakistan. The products manufactured by PEL have always been of a high standard and the name PEL is synonymous with quality all over Pakistan. PEL, since its inception, has been acting as an institution working for the advancement and development of engineering and modern technology in Pakistan Since its inception, the company has been working for the advancement and development of engineering know-how in Pakistan. The company has produced hundreds of engineers

and skilled workers and technicians through its apprenticeship schemes & training programs. PEL has been continuously adding new products to its range. As a result, PEL has registered a significant increase in its sales volume, during the last ten years In 1978, the Saigol Group of Companies purchased major shares of Pak Electron Limited. At that juncture, the company was only manufacturing transformers and switchgears. With the Saigols in management, PEL started expanding its product range by entering into Air Conditioner manufacturing. In 1981, PEL window type air conditioners were introduced in technical collaboration with General Corporation of Japan. In 1986-87, the company started manufacturing of refrigerators in technical collaboration with M/s IAR-SILTAL of Italy. In 1987, PEL deep freezers were also introduced in technical collaboration with M/s Ariston of Italy. In 2006, the Company has started manufacturing of split type air conditioners of various capacities as the customer choice has shifted from window type to split type. The product has been well received in the market. This encourages the company to multiply its production in the coming year. Today, PEL has become a household name. Its products are not only in great demand in the local market but the Company has started exporting its appliances division products.

Pel Company Structure


Pak Electron Limited (PAEL or PEL) is the pioneer manufacturer of electrical goods in Pakistan. The company is listed on all the three stock exchanges of Pakistan. Its principal activity is manufacturing and sale of electrical capital goods and domestic appliances.But now, PEL is operating a single business entity without any division.

LAHORE FACTORY:
In Lahore Factory, Refrigerators, Transformers, Energy Meters, and Switchgears are produced. Previously, Window AC and Deep freezers were also produced in Lahore Factory but PEL quit these operations. However, PEL has restarted the production of Deep freezers once again at Lahore factory.

There are following departments in the Factory of PEL:


Production department. Research and development. Quality control department. Human resources department. Marketing department. Finance department.

DIRECT COMPETITORS
The direct competitors of PEL are Dalliance, Waves, LG, and Hailer etc. The Dalliance is market leader in the refrigerator and PEL is still on second number. But in window room air conditioner (WRAC) the PEL is market leader.

REFRIGERATORS.
Total market sale of refrigerator in 2003 was 367000 units. Last year sale was 256900 units. These figures show 30% market growth. But the average growth was 13% to 17%. And the PEL sale growth is 70%, which is a great achievement.

Dalliance is a market leader in refrigerator with 46% share. PEL has 32% market share. Waves has 11% market share. 11% shares are others.

WINDOW AC.
PEL is a market leader with a market share of about 60% in local manufacturing industry. And overall has 35% market shares for this product. LG has about 32% market share and stands on number two. And rest of the manufacturers have 23% marker share.

Indirect Competitors:
The indirect competitors for PEL in this industry are Samsung, Orient, Mitsubishi, Sabot, Nobel and others Chinese brands available in the market. The PEL has no big threat from all these companies. But the Sabro pioneer for introducing the split air conditioner in Pakistan. Now days the sabro has lost its market share to other companies for the business of Split AC.

The strengths, weaknesses, opportunities and threats of PEL are discussed below:

1. Strengths:
PEL has the following strengths. Brand Name Strong Dealer Network Quality Products Best Sales Services Market leader in WRAC Number 2 in Refrigerators in Pakistan Strong Management Team Distribution of Authority Research and Development Department Free Customer Service

Brand Name:
PEL has created a strong brand image in the mind of the customers through higher quality and low prices. The customers of PEL always prefer its home appliances like Window AC, split AC and refrigerators, during the time of purchase. PEL is a

popular company in Pakistan and every one knows about the PEL products and its brand name. Thats why PEL is a market leader when it comes to Window AC.

Strong Dealer Network:


It is also the plus point for PEL that it has developed a strong dealer network in the market. The dealers always try to sell the PEL products to the customers because, the company for its products, gives them a high margin. The management of PEL also provides more incentives to their dealers than their competitors. Dealers are very conscious about the PEL products and always guide the customer in buying the PEL products.

Quality Products:
PEL is also in a strong position because it provides superior quality products to customers. So it gives an edge to company over its competitors. Due to best quality, guarantee of products of PEL is more than its competitors.

Best Sales Services:


PEL provides the after sale service to customers which increases the customers satisfaction. The biggest strength of services department is that it handles a complaint within 24 hours in any part of the country, that helps in increasing the satisfaction level of customers.

Market leader in WRAC (Window Room Air Conditioner):


It is also strength of PEL that it is a market leader in WRAC. Costumer always gives preference to PEL in window AC market because of low price, high quality and durability.

Number Two in Refrigerators in Pakistan:


After the Dawlance refrigerators, PEL has the second position in the refrigerators market. PEL is gradually coming up in refrigerator market and increasing its market share. Due to improved quality, innovative features and good sales services PEL is becoming the first choice for customers.

Strong Management Team:


It is another plus point that PEL has a strong management. Its employees are competent, efficient, skilled and knowledge. They always cooperate with the top management in achieving of goals that are assigned to them. Employees are well aware about the company objectives and are committed to the development of company.

Distribution of Authority:
Top management of PEL delegates the power to the subordinates for achieving the marketing objectives in a specified time period. So every manager has an authority to take decisions to achieve the goals of company. In this way they save the time and react quickly.

Research and Development Department:


PEL has a strong research and development department that is continuously trying to develop new features for the products. R&D department spends huge amount of money for the development of new products.

Free Customer Service:


PEL provides free customer service for one year to its customers. The customers who buy the PEL products become brand loyal due to this facility.

2 Weaknesses of PEL:

Like other companies PEL has some weaknesses. If PEL overcomes these weaknesses then it can become a market leader in home appliances. PEL looses some competitive edge in the following areas:

Financial Problems Lack of advertisement System variations Lack of Product range Less Utilization of capacity

Financial problems:
Sometimes PEL faces the financial problems because its stocks are so much piled up in the stores that creates problem of cash flow because when the stocks are not sold and the production is in process for 24 hours a day then the company faces such problems.

Lack of advertisement:
It is a second major weakness of PEL that it is not a vigorous advertiser. Only recently has PEL invested a considerable amount in advertisement, but when we look at its competitors, PEL still has to do a lot in this sector.

System variations:
It is also the main weakness of PEL that there is a rapid change in polices of selling the products. That creates problems for the selling team to sell the products to the dealers because the top management requires urgent amount of money. Thus the products are sometimes sold on hard cash that reduces the prices of products that creates problems for the management.

Lack of Product Range:


PEL has introduced more products of consumer items but there are more needs to develop new consumer items like PEL washing Machines, Vacuum cleaner and other items.

Less utilization of capacity:


Due to lack of finance a company cannot utilize all its resources on its full capacity. It increases the cost of products per unit that decreases the profit margin of each consumer item. Sometimes, the company cannot allocate the resources according to the requirements of the production department, which later on becomes a problem for the complete utilization of resources.

2. Opportunities for PEL:


For PEL, there are more opportunities for expansion in business. Following are the opportunities for the PEL. Exploration of market in Pakistan Increase in product range Export opportunity Increase in production capacit Exploration of market in Pakistan:

PEL has the opportunity to explore the market in all over the Pakistan. Even though PEL has introduced its products in many cities of Pakistan but there are so many places that are yet to be exploited.

Increase in Product Range: PEL can increase its product range that will be more profitable for the company. There are more needs to develop new consumer items like PEL washing Machines, Vacuum cleaner and other items. Export opportunity: PEL has also the opportunity to export their products in other international countries like UAE, SAUDI ARABIA, and other Arabic and African countries.

Increase in production Line: Company can also increase its production line at the maximum level that will increase the efficiency of the employees and will also reduce the total cost.

4.

Threats for PEL:


Following are the main threats for the PEL: Strong competition Chinas product introduction in the market Price war Slow growth rate in Pakistan Instability of government Tax department World Trade Organization

Strong competition:
There is very strong competition in the home appliance division. Every company adopts different strategies for selling of the products. It reduces the profit margin of each company and increases the bargaining power of the buyers who will demand higher quality of products at lower cost.

Chinas product:
Chinas products are another threat for the Pakistani companies because these products are cheaper than the Pakistani products. China products stress the indigenous companies to lower the quality and prices that will not be profitable in the long run.

Price war:
As there is stiff competition in the home appliance market that will cause the price war.

Slow growth rate in Pakistan:


There is also slow growth rate of home appliance in Pakistan that will increase the stocks of the company. Although, this industry is in the growth phase, but the speed of the growth is very slow.

Instability of Government:
The rapid changes in governments will become a threat for the companies because every government adopts new policies for the industries. So it increasesthe uncertainty for the investors who want to invest heavy amounts in their new projects.

Tax department:
Tax department is another major threat for the company that will restrain the business expansion. There is a most complicated tax procedure operating in the country that creates hurdle in the production and smooth functioning of different companies in Pakistan.

World trade organization:


World trade organization will give the permission in 2005 to each company of home appliance to export their products after paying less duties or duty free products. That will increase the pressures for the indigenous companies to reduce the prices and increase the quality. It will increase the competition among the foreign companies and indigenous companies.

Objective Of PEL
The objectives and mission for which the company is established are as following: To carry on the business or businesses of manufacturing, selling, installing, maintaining designing and dealing in all kinds of electrical equipment. To carry on any business whether manufacturing or otherwise which may be found convenient to undertake in connection with or in addition to any of these obj ectives mentioned above. To do all such things that are incidental for the attainment of the above objectives or any of them. To produce high quality and standard products. To produce equipment to be used in numerous projects of national importance. To secure a high share / quota of WAPDAs demand for power products. To produce skilled workers and technicians through its apprenticeship schemes and training programs for engineers and technician

BCG stands for Boston consulting group. It is a portfolio planning method that evaluates the companys strategic business unit .Using this model an organization classifies each of its separate business units (SBU) according to two factors: Market share relative to competition and growth rate of the industry in which SBU operates

STAR:
Star is a business unit that has large market share in fast growing industry. Such unit requires more investment to generate more cash. If due to more investment it will become successful and become cash cow and it will reach at maturity stage. For star product the strategy is called harvest

Refrigerator of PEL is the product having high market share and high annual growth rate.

Cash Cow:
It is the business unit sometimes known as problem child. It has a large market share and low annual growth. Each cash cow requires little investment and it generates more cash that can be used for investment purpose in other business units. For cash cow the strategy is called HOLD, you must preserve market Split air conditioners is the product of PEL having high market share and low annual growth rate.

Question Mark:
It is the business unit that has a low market share and high annual growth. These business unit requires resources to grow market share but if they succeeded that will become STAR. For question mark the strategy is called BUILD, you try to make up the market share. Washing machine and microwave oven are the products of PEL having low market share but high annual growth

Dog is the business unit that has small market share as well as low annual market growth rate. A company normally would be unwise to invest substantial funds in SBUs in this category. Marketing strategies for dogs are intended to maximize any potential profits by minimizing expenditures or to promote a differential advantage to build market shareAnd the company can diverts or liquidate the dog product Deep freezer is the product of PEL having low market share plus low annual growth share.

Question Mark
.

Star

Cash Cow

Dog

Deep freezer of PEL has low market share in low market growth rate. So it regarded as a dog. So company should drop this product.

STRATEGIES OF PEL AS MARKET CHALLANGER:


In competitive environment challengers strategies are very significant to survive in the market. Firms in this category can adopt one of the following strategies:The leader is attacked but it is very risky and high payoff.Company can attack unprogressive and under financed firms, it is less risky and less payoffIt can also attack on small local and regional firms, it is neither risky nor high payoff

Market Segmentation
Segment marketing offers several benefits over mass marketing. The company can more easily select the best distribution and communication channels and it will also have a clear picture of its competitors.Market segmentation refers to the different areas of the population that companies can aim their products towards. The market segment that PEL

has

chosen

to

aim

is

the

quality

conscious

people.

Segmentation

Geographic

Demographic

Psychographic

Behavioral

Geographic Segmentation:
PEL is doing mass market which is not limited to one county but all over the world.

The main target of PEL is Pakistani market. In Pakistan,PEL is available at every city because its very famous and good product of market.

Demographic Segmentation:
PEL divide its market on the basis of following characteristics of population

Age group:
Earlier PEL used to segments its market among people age ranges from 45years.But Now PEL focus between the age group ranges from 25----35 years. 35-----

Gender group:
For the segmentation, the company is recently focusing on young graduate girls and the latest ad of PEL reveals the fact in which famous singer Hadiqa is representing young college girl.

Psychographic Segmentation:
Income group: PEL is offering its several products to different income groups of society

freezer.

In case of Generators, company focuses on elite class. refrigerators, split air conditioners, washing machines, deep

Televisions Company focus on middle class. Microwave oven, the company focuses on elite and middle class.

Behavioral Segmentation:
We provide a quality product for our customers. It is purely base on local demands and needs, and we sure that our product will be appreciated by that people who are quality conscious.

TARGET MARKET
It is the segment for which the seller designs particular marketing mix. Target market Strategies: Following are the target market strategies: Aggregation strategy Single segment strategy Multiple segment strategies

Aggregation strategies:
In this strategy total market is treated as a single segment and single market mix is developed to reach the customers in the entire Market.The company offers a single marketing mix.

Positioning
Position is the way a firms product, brand or organization is viewed relative to the competition by current and prospective customer. Positioning is a firms use of all the elements at its disposal to create and maintain in the minds of a target market particular image relative products. PEL has different positioning levels for different products,

In case of refrigerators the company is challenger of DAWLANCE. In case of air conditioners company is challenger for WAVES and MITSUBISHI. In case of televisions company is challenger of LG and some other companies.

Market Mix
PEL doing the mass marketing and using only one marketing mix for the complete Pakistani market.

Product is heart Price Promotion

Place (Distribution)

Product Mix:
Product mix is a set of all products that are offered for sale by a company. Product mix consists of both breadth and depth.

BREADTH:
Breadth is a measured by the total number of product line offered by a company.

DEPTH:
Depth is the variety of sizes, colors and models offered within each product line

FEATURES OF PRODUCT LINE

Air Conditioners:
PEL window-type air conditioners were introduced in 1981 in technical collaboration with General Corporation of Japan. Ever since their launch, PEL air conditioners have a leading position in the market. PEL air conditioners cooling performance has been tested and approved by Copeland and ITS USA. With the shift of users preference from window type to split type air conditioners, PEL has started manufacturing split type air conditioners

Refrigerators:
The manufacturing of refrigerators started in 1986-87 in technical collaboration with M/s IAR-SILTAL of Italy. Like the air conditioner, PEL refrigerators are also in great demand. Today, PEL Crystal has 38% of total market share. Its cooling performance is tested and approved by Danfoss, Germany and its manufacturing facility is ISO 9001 certified.

Deep freezers:
PEL deep freezers were introduced in 1987 in technical collaboration with M/s Ariston of Italy. Due to several reasons the production of deep freezers was stopped but now company is restarting its production again.

Microwave Oven:
PEL the trustful company name in home appliances all over the country, now introduced all new models of "PEL Power Wave" Microwave Ovens. Now PEL customers can have four models of PEL Power Wave in which they can enjoy the grilling feature as well. PEL Microwave Ovens are available in different sizes, inner cavities (steel & painted) and features.

Washing Machine:
PEL introduced washing machine in 2006 first time and it got appreciative response from customers, Now it is being produced by the company on large scale and due to its improved quality its sales volume is increasing. Generators:Generator is another product of PEL that is used to generate electricity. It is very famous product in elite class. It has several features as self start, no noise, digital display panel, dual exhaust system (environment friendly), special air cooling system, continuous 10 hours running at 3 KV.

PRODUCT LIFE CYCLE

Sales and Profits ($) Profits

Sales

Time Product Development Losses/ Investments ($) Introduction Growth Maturity Decline

A product life cycle consists of aggregate demand over an expected period of time for all brand comprising a generic product category. A life cycle can be foraged by plotting aggregate sales volume for a product category over time usually years.

PRICING:
Price is a strong element in the marketing mix. It has a direct impact on the customer, business. To the consumer, the price is a major indicator of the quality of good and an important factor in making decision about its purchase In deciding the price the business management must consider the kind of competition in the market for the good, the elasticity of demand for product, its cost of production etc As far as PEL organization is concerned, sets its prices of product line regarding the competition in the market. Prices of product line varies from product to product, some of its products prices are set on quality base PEL organization is very well aware of the limited buying power of the average population of Pakistan so to uplifting their living standard & trying to meet their expectations regarding necessities of home appliances. So company tries to focus on this portion of society, while setting the prices.

Internal costs include in prices:


1234567Raw Material Labor Charges Factory Overheads Advertisement Cost Governmental Duty Excise Duty Company's Profit Margin

Promotion:
Promotion is an essential for increasing the demand of the product. Promotion includes advertising, personal selling and sales promotion. The seller informs the customers through news papers, television and posters about the product available in the market.

PRMOTIONAL STRATEGIES OF PEL:


PUSH STRATEGY:
It is promotion program primarily aimed at dealers in which company focuses to sell the product. In past PEL used this strategy to increase their sales volume by giving more and more incentive to the dealers

PULL STRATEGY:
It is another promotional program primarily aimed at final consumer. Now a days, PEL is using PULL strategy by improving product quality For example: PEL is using the imported DANFOSS compressors in its appliances.

METHODS OF PROMOTION:
An organization adopts one or more of the following methods which are very common now a day in uplifting its performance:

Advertising Personal selling Sales promotion Public relations

PRMOTONAL BUDGET:
PEL spends 3% of sales on promotion.

ADVERTISING:
Advertising is non personal communication paid for by a clearly identified sponsor promoting ideas, organizations or products. The most familiar outlets for ads are the broadcast and print media. :

The company highly believed in advertising. The company is expanding a lot of money on different advertising media which are: Television, Hording, Neon Sign, Stickers, Banners, Point Of Sale, Clocks, Brochures, Key Chain, Billboards. Calendars Wall

Organizing advertisement: A firm can manage its advertising program through following ways:

By developing an internal advertising department By using an outside agency By using a combination of above both

ADVERTISING THROUGH PRINT MEDIA:


PEL is conducting its advertising through internal advertising department. It is performed by publishing ads in hot selling magazines.

ADVERTISING THROUGH ELECTRONIC MEDIA:


PEL is conducting its advertising campaigns through advertisement several outside agencies. PEL sister concern Red Communication is the main advertising agency used for the purpose of making ads according to changing trends of market and considering ethical issues. Latest ad of PEL is designed by this agency by focusing on a college girl and its requirements from technology and PEL is providing the appliances which is fulfilling theses requirement.

SALES PROMOTION:
Sales promotions sponsor-founded, demand-stimulation activity designed to supplement advertising and facilitate personal selling. PEL uses out door activities: Exhibitions Road shows Promotion schemes etc.

PUBLIC RELATIONS:
Public relations encompass an wide verity of communication effort to contribute to generally favorable attitude and opinions towards an organizations and its products. PEL also engaged in public relations activities just to create a soft image in the hearts people.

SOCIETAL MARKETING:
Firm that sufficiently extents the breadth and commitment dimensions of its marketing goals to fulfill its social responsibility are practicing what has become known as the societal marketing. In these days PEL is giving donations for rehabilitation of earthquake affected areas. The company has donated several necessities for the help of earthquake affected people. PEL uses to collect zakat funds on the behalf of several charity institution as Shokat Khanam hospital

Installment Facility:
PEL gives installment faculty to all government employees, all of the account holders of Banks Alflah Limited and bank of Punjab

Place:
This element of marketing is concerned with all those activities with are related to move the product or service from seller to buyer. PEL uses place strategy which ensures that product is available to consumer at the right time when they are needed (time utility) At the place where they are demanded (place utility) in the form or shape they are required (form utility) and the ownership of goods is transferred with less financial risk (possession utility) A product reaches customer through a channel of distribution. This channel might be short or much complex involving many kinds of middlemen but PEL uses short channel of distribution to minimize the expenses and ensure timely supply of goods to end user

GOOD WILL:
Company prefers the dealers having well repute in the market and dealers are very good in the eyes of customers.

Conclusion:
The economy is expected to perform well in the next year however it is exposed to certain challenges like current account deficit, lower exports, increased competition in the international market and lack of technological advancement as compared to competing nations. It is still hoped that national economy will continue to grow and rising prosperity will bring expanding opportunities for the Engineering Industry and for your Company. The company will continue to focus on cost effectiveness, quality standards and best after sales services to our valued customers. We expect to go farther, faster and higher than we have ever been in serving the interests of our customers, shareholders and employees.