MARKET SEGMENT Segment Life Cycle Intro Growth Maturity

Market / Product Segment Recipe Mix Plain Mix Salt Institution Export

Decline

Shan Foods can easily pin point which segments to attack. The spice sector is expected to have tremendous growth for future years. Two key segments are falling in growth stage which means even now lot of investment can be made to take the upcoming market of these segments. The Salt and Institutions are yet on its introductory stage, though Shan foods have started catering to these markets but still lot more efforts are required as figure shows this segment is expected to have lot of growth. Even after so many years the segment like recipe mix spices is at its growth stage because THERE IS NO as such strong substitute for this segment SHANS PORTFOLIO LIFE CYCLE Market / Product Segment Recipe Mix Plain Mix Salt Institution Export Shans Portfolio life Cycle Intro Growth Maturity Decline

Shan foods is in growth stage in three segments i.e Recipe Mix, Institution and Exports which suggest the growth possibilities for shan and giving an edge to Shan by earning more share than its competitors.

The industry is in introductory stage in Export segment while as we know shan has international presence and it is in growth phase so shan can further expand its presence and can make good return by focusing on exports. Companies & Competitors Market Share of Branded Spices Company Shan National Chefs other Market Share 2006 2007 1.2 1.68 1.2 1.5 0.45 0.63 0.15 0.21 2008 2.352 2.5 0.882 0.294 2009 3.3 3.2 1.2348 0.4116 % Growth 40% 40% 15% 5%

The table describes the market share possessed by Shan Foods and its competitors. Shan Foods and National Foods are almost occupying the similar share in Volumes as well as in % but the growth of Shan Foods is Showing the steady increase while the National foods is Showing fluctuations in its market growth. Shan Outlet Coverage and Market Reach Shan Outlet Coverage Outlets Total Outlets Shan Outlets Outlet Coverage Outlets Contribution A 407 360 89% 0.22% B 3020 2765 92% 1.67% C 30205 23995 80% 16.70% D 147344 22880 16% 81.40% Total 180976 50000 28%

Shan outlets coverage in A, B and C class outlets is excellent, where they really need to work hard are the D class outlet where there outlet coverage is less than 20%. These are basically the rural areas where people do not really know about branded items they just rely on loose spices. Shan Market Reach 2004 Market Reach
Shan Foods Industry

Retail Volume Sales

3.3 billion 8 billion

Outlet Coverage

Market Reach

Shan

Benchmark

Shan

Benchmark

28%

47%

42%

56%

INTERNAL ANALYSIS
SWOT ANALYSIS SHAN FOODS

Strengths : Shan food has a very strong heritage and legacy behind it which has given it a strong goodwill in households. Shan foods enjoys an approximately 50% market share in the recipes mixes category. Shan foods is a leading exporter of food items from Pakistan providing it an opportunity to tap the large global market which helps it to expand at a rapid pace. Shan has a wide range of products and SKUs available consolidating its presence in various niches and keeping its customers loyal to the brand. Weaknesses : Shan is not present in Jams and marmalades, Ketchups categories like National foods thereby loosing an opportunity market. Many loyal Shan customers purchase National products in these categories which is causing loss of potential sales. Shan has a low market share outside Karachi in the Punjab market where National enjoys market leadership. This is due to weak distribution of Shan products in Punjab market which is causing loss of potential sales. Opportunities : Shan can vertically integrate to produce its own raw materials which will not only reduce costs but will also provide it more control over the quality of input.

Shan currently has a very low advertising spend in the FMCG industry. It can deploy brand activations and other innovative campaigns to switch customers from the loose/ unbranded segment to Shan products.

Shan can also horizontally expand its scope like national foods and enter the other related food categories where it can tap its loyal customers with minimal extra efforts.

Threats: The biggest threat to Shan is the high inflation in Pakistan coupled by a global recession which is putting pressure on the profits and sales. The prevalence of counterfeit products is also threat to Shan causing loss in goodwill and potential sales. The emergence of newer brand with deep pockets can also damage Shans market share due to heavy advertisement while keeping the product quality close to that of Shan.