Marketing Report

Submitted By:
Muhammad Humayun Maqbool
MBA 20 ( C ) – 3850

SUBMITTED TO
PROF. DANISHMAND

FACULTY OF MANAGEMENT SCIENCES

DEPARTMENT OF BUSINESS ADMINISTRATION

INTERNATIONAL ISLAMIC UNIVERSITY H-10 ISLAMABAD

SUBJECT OF THE PROJECT

To analyze and compare the marketing strategies of different concerns of same

industry

INDUSTRY

Foods and Breweries

PROJECT PROFILE
Opportunity Rationale
The fruit juice industry coupled with beverage industry is considered to be one of
the largest industrial sectors in Pakistan. It is to growing at a robust rate of
27%1. Modernization of this industry, in consonance with the change in urban
life style, massive shift of rural population to the urban areas, growth in
population, etc., predict a growing potential for instant solutions in fruit juice
segment of the beverage industry. Traditionally in Pakistan and generally all over
the world people prefer to use natural drinks rather then carbonated soft drinks
and this perception is gaining more currency day by day which also adds to the
advantage of the fruit juice industry. Common people especially young
generation is inclined to have ready to consume drinks; in addition hotels,
hospitals are also expanding day by day where juices could be marketed
successfully. Moreover the global trend of preferring fresh fruits and juices also
marks possibilities of growth in this sector. Furthermore, the growing exports
volume and withdrawal of CED (customs and excise duty) on fruit juices
(produced locally) could further supplement significant growth in the fruit juice
industry.

Project Brief
Fruit juices are produced and consumed for their refreshing character and
nutritional qualities being rich in vitamins and minerals and having regulatory
functions to the body systems; such as augmenting of alkaline reserve of the
blood and proper functioning of blood vessels, including capillary, permeability
and fragility as a result of contained falconoid. Juices also increase body
retention of calcium, magnesium, nitrogen and are also good sources of quick
energy. These qualities need to be maximized in technologies used to process
fruit juices. Juice is generally defined as liquid extracted from the fruit, although
many fruit juices are the results of expressing the liquid from the whole or cut
fruit. There are some fruits where the distinction is not so apparent, e.g. fruits
like mango, apple and banana when squeezed yields little or no juice; rather
flesh is obtained which when comminutes will result in a dense puree and
directly cannot be consumed as drink. Whereas in case of lemon, expressed fluid
cannot be called juice, it is too sour to consume and can only be used as juice
when diluted with sugar and water. For commercial purposes, procedure
involved in juice manufacturing varies from fruit to fruit.
Player

 Murree Brewery company Limited

 Introduction of the Murree Brewery Company Limited

The Murree Brewery Company Limited was incorporated under

the repealed Indian Companies Act ( Now Companies Ordinance
1984) in February 1861 as a public limited company in Pakistan.
The shares of the company are listed on the Karachi, Lahore and
Islamabad Stock Exchanges. The registered office of the company
is located in Rawalpindi. The company is principally engaged in
the manufacturing of alcoholic beer, non alcoholic beer, Pakistan
Made Foreign Liquor (PMFL), juices in Tetra packs in Rawalpindi
and food products, juices glass bottles and jars in Hattar.

The Company is now operating three divisions to carry out its principal activities
namely Liquor Division, Tops Division and Glass Division.

History

Consequent to the British annexation of the Punjab in 1849 from Sikh rule, and more
so after 1857 when the British Crown formally extended its sovereignty over India, a
structured administration commenced in the Punjab.

To meet the beer requirements of British personnel (mainly army), the Murree
Brewery was established in 1860 and incorporated a year later at Ghora Galli, located
in the Pir Punjal range of the Western Himalayas at an elevation of 6000' above sea
level, near the resort town of Murree.

Between 1885 & 1890 the Company established Breweries in Rawalpindi & Quetta &
acquired an interest in the Oticumand (South India) & Norailiya (Ceylon) breweries. A
distillery was also established in the above period in Rawalpindi next to the Brewery.

The Murree Brewery at Ghora Galli was therefore among the first modern beer
breweries established in Asia. Murree Beer proved to be very popular among the
British troopers who were largely barracked in the 'Galis' of these hills.

A division of the Company was established in 1969. It processes fruits and markets
fruit juices and allied food products. Two manufacturing units are located in
Rawalpindi and Hattar (NWFP) respectively. A Tetra Pak packaging facility was added
in 2001. The Hattar plant was installed in 1992.

The plant is based on a Recuperative Melter and two Emhart I.S. container
manufacturing machines and has the latest quality control equipment for online
inspection of containers.
The Murree Brewery is one of the oldest public companies of the sub-continent. Its
shares were traded on the Calcutta Stock Exchange as early as 1902, and is now the
oldest continuing industrial enterprise of Pakistan.

In 1997-1998 and 1998-1999, we were judged among the top 25 performing public
companies by the Karachi Stock Exchange.

VISION STATEMENT
Our office is in the Market

MISSION STATEMENT
We the people of Murree Brewery Co. make personal commitment to first understand
our customers requirement then to meet and exceed their expectations, by
performing the correct tasks on time and every time through with CARE

Continuous Improvement

Alignment of our missions and goals

Responsibility and respect of our jobs and each other

Educate one another

MOTTO
We respect our past. We are the industry leaders in present and accept the challenge
of the future.
 (A division of the company, established in 1969)

Tops Food and Beverages a division of the Company was established in 1969. It
processes fruits and markets fruit juices and allied food products. Two manufacturing
units are located in Rawalpindi and Hattar (NWFP) respectively. A Tetra Pak
packaging facility was added in 2001. The Hattar plant was installed in 1992

Product Include:
• Fruit Juices (Mango, Orange, Lychee etc.)
• Fruit squashes(Mango, Orange, lemon &
Diet)
• Conserves( Apple & Strawberry Jam,
Orange Marmalade)
• Vinegar ( Malted & Plain)
HIERARCHY

FINANCIAL OVERVIEW OF THE COMPANY

Turnover of the company for the last year is at Rs 2541 million shows an increase of 13.38%
from the previous at Rs 2241 million. Profit after taxation of Rs 196 million is 4.25% higher than
the last year.

Change in Profitability of the Company

• Tops Division
The turnover of this department reflects an increase of Rs. 180 million (16.8%) over the
previous year.

The following table shows the change in profitability and sales

2008 Liquor Division % 2007 Liquor division %

Sales exclusives of taxes 531 557

Cost of Sales 460 86.62 485 87.07

Gross Profit 71 13.37 72 12.93

Operating Profit 6 1.12 8 1.44

The profit and loss account of the tops division for the year 2007 and 2008 shows the best
picture of the profitability of the company’s Tops Division.

OPERATIONAL PERFORMANCE

400
350
Rupees in millions

300
250
200 Gross Profit
N.P after Tax
150
100
50
0
FY 05 FY 06 FY07 FY08
 Equity Table

1200

1000
Rupees in Millions
800

600
Equity
400

200

0
FY FY FY FY FY FY09
03 04 05 06 07

MURREE BREWERY COMPANY LIMITED

Profit and loss account for the year ended 30 June 2008
Tops Division

2008 2007
Rs in 000 Rs in 000
SALES
Third Party Sales-net 633,599 652,432
Inter Divisional Sales ----- -----

633,599 652,432
Duties and taxes 102,114 94,987
531,485 557,445

COST OF SALES
319,864 330,298
Third Party
140,717 155,537
Inter Divisional

(460,581) (485,835)

Gross Profit/Loss 70,904 71,610

Other Costs 64,639 63,993

Net Profit before Taxation 6,265 7,617

Note* from the above profit and loss account it is clearly shown that the company
has a positive change in the turnover of its tops division but the duties and taxes are
also change in a high rates. The cost of sales is low than the previous year. But the
net profit of the company has gone down. That is the negative change in the profit.
But if the overall income statement is compare then the net profit of the company
(including all its three departments/divisions) it has a positive change. i.e;

In 2007 Net profit is 259898 million rupees

In 2008 Net profit is 296616 million rupees

EARNING PER SHARE OF THE COMPANY

Earning per share for the current year is Rs. 16.42 against Rs. 15.73 last year.

DIVIDEND
The Board has recommended Cash Dividend @ 50% and Bonus Shares @10%.

FUTURE OUTLOOK OF THE COMPANY

The management is conscious of the fierce competition in the industry, but confident
that the company will retain its market share and is optimistic in achieving budgeted
goals for the current year. The company is continuing its policy of balancing and
modernization by reviewing production procedures replacing old machines and
controlling costs.

Murree Brewery 5 years at a Glance

RUPEES IN MILLIONS
Sr. Particulars 2008 2007 2006 2005 2004
No
1 PAID UP CAPITAL 119.2 108.4 98.58 89.62 71.70
2 RESERVES AND SURPLUS 889.2 746.5 610.3 508.30 396.59
3 FIXED ASSETS LESS 2906 743.8 773.6 636.14 567.81
DEPRECIATION
4 SALES WITH TAXES 2541.2 2241.4 1678.5 1142.73 910.3
5 COST OF SALES WITH TAXES 2034.5 1829.3 1373.5 895.23 718.72
6 GROSS PROFIT 506.7 412 305.4 247.50 191.91
7 PROFIT BEFORE TAX 296.6 259.8 214 169.32 121.60
8 CASH DIVIDEND % 50 50 50 50 35
9 STOCK DIVIDEND % 10 10 10 10 25
10 RETURN ON EQUITY % 21 24 22.66 21.89 198 0
11 BREAK UP VALUE OF SHARE OF RS. 84.54 78.84 65.34 60 .65 65.32
10 EACH
12 EARNINGS PER SHARE (EPS) 16.42 15.73 13.65 12.12 9.84
Advertisement /Promotional Activities and Demand
Creation
The marketing and promotional activities of fruit juice and related commodity
groups are crucial in increasing the demand for fruit juices. These activities
include, but are not limited to, promotion, advertising, new product
development, and packaging innovations. Marketers adopt their strategies in
accordance with specified consumer wants and needs. They also create product
image and influence consumer purchases. Often, consumer demands for
processed food like juices are difficult to categorize. Consumers tend to purchase
products and services that cover a broad spectrum of price and value
combinations. Servicing the educated, nutritionally aware consumer who dwell in
the localities i.e. E-8, F Sectors of Islamabad, Blue Area etc. and same type of
Consumer category in Lahore and other metro cities is a complex role which
marketers strive to master. In these types of areas people use to have a pure
fruit juice at least once a day, with an imported or prime local fruit juice.
Similarly this market could be catered through intensive marketing and
promotion campaign on television or other sophisticated media.
New product developments in conjunction with technological advancements have
Improved the marketing of fruit juices like many other food items. Relatively
recent innovations appearing on supermarket shelves are single serving
aseptically packaged fruit juices, fruit roll-ups and fruit juice blends.
Marketing infrastructure, which includes refrigerated transportation facilities and
the composition of retail and wholesale markets, is correlated to the consumer
demand for high quality produce. Equipment that transports from the field to the
supermarket, field wrapping machines, improved cooling techniques, and
temperature controlled distribution centers have been developed to ensure the
delivery of quality produce to retail outlets.
It is also important to ensure that the product has a meaningful point of
difference i.e. sophisticated and healthy attractive packaging, less use of
preservatives and clearly mentioning of purity of the juice etc. Most new
products fail in the market because they are "me-too" products with no unique
benefit (or attraction) for the consumer. Generally for the fruit juice business
advertising budget is around 5% of the Total Revenue but for a small or medium
scale unit, it may vary (on the higher side). Billboards, Television, Radio, F.M
Channels, and Newspapers are the conventional mediums, which have been
powerfully used for the promotion of fruit juice products.
Different Accounting Policies of Company:

1-Taxation policy of the Company

Income tax on the profit or loss for the year comprises current and deferred
taxation. Current and deferred tax in recognized in profit and loss account except
to the extent that it relates to items recognized directly in equity in which case it
is recognized in equity.

Current Taxation policy:

Taxation charged in the financial statements is based on taxable income at the
current rates of taxation after taking into account tax rebates and tax credits, if
any.

Deferred:
Deferred tax is accounted for using the balance sheet liability method in respect
of all temporary differences arising from differences between the carrying
amounts of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit. Deferred tax
is calculated at the rates that are expected to apply to the period when the
temporary differences are expected to reverse, based on tax rates that have
been enacted at the balance sheet date.
Deferred tax liabilities are recognized for all taxable temporary difference and
deferred tax assets are recognized to the extent that it is probable that sufficient
taxable profits will be available against which the deductible temporary
differences, unused tax losses and tax credits can be utilized. At each balance
sheet dates, the Company re-assesses unrecognized deferred tax assets and the
carrying amount of deferred tax assets. The company recognizes the previously
unrecognized deferred asset to the extent that it becomes probable that future
taxable profits will allow the deferred tax asset to be recovered the company
conversely reduces the carrying amount of deferred tax asset to the extent that
it is no longer probable that sufficient taxable profit will be available to the
benefit of part or all of the deferred tax asset to be utilized.
2-Staff retirement benefits
The company operates the following retirement benefit schemes for its
employees:
a) Defined contribution plan:
The company operates a Provident Fund Trust for which the company and the
employees contribute equally @ 8.33% of the basic salaries of employees. The
Company’s contribution is charged to profit and loss account.
b) Defined benefit plans
The company operates pension and gratuity plans for its eligible staff. The
pension plan is funded while the gratuity plan is unfunded. The liabilities under
the plans are determined on the basis of actuarial valuations carried out by using
the projected unit credit method. The company has a policy of carrying out
actuarial valuation after every two years. Latest valuations were conducted as of
30 June 2007. Significant actuarial assumptions are as follows:
• Discount Rate 10%
• Increase in Salary 10%
• Mortality Rate EFU 61-66 morality rate
MARKETING STRATEGIES OF THE COMPNAY:
MARKETING STRATEGY OF THE COMPNAY IS BASED ON
THE FOLLOWING POINTS………………

FIRST COME INTO KNOW ABOUT THE WHO ARE OUR

CUSTOMERS AND WHAT ARE THEIR REQUIREMENTS

• What do we really know about their needs, preferences,

behavior and their life styles?
• What can we offer them... at a price... that other companies
do not?
• How do we perform in comparison to our competitors?
• How are we currently performing for our customers?
• Where are the gaps, the weak points, the fudges, and the
point of excellence... the USPs (Unique Selling points)?
• How are we different?
• Why are we different?
• How can we better delight?
• How do we change?
• What do we change?
• How clever are we with our market intelligence?
• How well is our market research working?

Consider groups who share a similar need and who will respond in
a similar way.

• Design a Marketing Strategy

• To achieve specific marketing objectives, based (e.g.) on the
Marketing mix.
• Set Tactical Plans, Budgets, Programs
• Assign individual responsibilities to achieve the objectives.
• Monitor Progress
PRODUCT STRATEGY

Murree brewery is aimed to have a good quality of products and it is

providing different types of liquids to upper class, middle class and low class
people. The company believes that whatever we provide to the customers
should be the best for them. They should get the maximum satisfaction in
this product.

Murree Brewery has launched a new product Big Apple which is now
being used at a large scale in the whole country. The company provides
Beers to the upper class that has the authority to do so. They have energy
drinks and soft drinks.

PRICING STRATEGY

Company has 15 different types of juices, which come into jars, bottles and
packs. The have to maintain a price which is affordable to the customers and
which is profitable to them, it appears that they have position their product
pricing in such a way that their main focus is middle and upper middle class.
However, they have some selected range for upper class as well. Product-
wise price list enclosed in appendix for reference.

PROMOTION S TRATEGY

They believe that print media and out door activity help them to reach to
their target customer. Due to satellite transmission and having multi-
channels, it does not pay one unless you have very huge budget to spend on
this media. On promotion, their spending is more on putting banners on the
roads, on bridges and sometimes on the newspapers. Since it pays them and
there is direct relationship between sales and consumer.

DISTRIBUTION STRATEGY

Tops has nationwide users so they have to arrange dealers in the every city.
They have their branch offices in Karachi, Lahore, Islamabad, Faisalabad and
all the major cities of Pakistan so that one can get easy delivery of their
product easily in every city or village of country. provide quick and timely
delivery to their dealers: they have got big warehouses located in almost all
big cities and towns. Whenever they get order from the dealer they try to
provide supplies to their dealer from closest warehouse. They believe that,
timely delivery of their product to the dealer, is one of an important element
in their success in Pakistan.

PRODUCT LIFE CYCLE

It is one of their missions to provide quality product to their customers.

Therefore, they ensure that every product, which is delivered from their
factory, must go through rigorous quality check. So that only perfect product,
free from any defect is delivered to their customers

“So, when it is delivered to the customer, it must meet customer's expectations”