Marketing At Ionics Pvt Ltd: Business Markting Report

 

INTRODUCTION

 

In this day and age it is very hard to find the time or inclination for a bright idea to come by. It is even more difficult to follow such ideas right through to the very end. We decided to break this monotony and  take a risk. This was the very spirit behind the creation of IONICS (PVT.) LTD.

 

Ionics (Pvt.) Ltd. was born on the 31st of December, 1994. As if to salute the very spirit of the night, three young and energetic entrepreanures struck upon a queer and quaint idea which would result in the realization of the Pakistani population’s dream of a clean environment.

The rest is history. Let us now take a look into the workings of this dynamic and inspirational organization.

 

To understand the working of any organization, it is very important to look at the organization’s philosophy. What better way to understand the philosophy of an organization than to look at the company’s mission statement.

 

IONICS (PVT.) LTD.

MISSION STATEMENT

Ionics Private Limited is a dynamic and an environmentally friendly company with the will and enthusiasm to explore new vistas in the application of technology to everyday environmental friendliness.

 

It is our sincere objective to be upheld by our valued customers as a company strongly committed to the fulfillment of their needs and conversely those of the environment by not only recognizing but also striving towards the achievement of their needs an desires.

 

We will try our level best to optimize the resources at hand in the most efficient and proficient manner possible, the control of quality being at the top of our business agenda while providing our employees with a supportive environment to help us in our quest.

 

 

COMPANY PROFILE

 

The company’s official name is IONICS (PRIVATE) LIMITED. It is a privately owned concern with a single product which is known as THE DUST BUSTERTM. The company was founded on the 10th of January, 1995. The company is working in technical collaboration with AIRONIC LIMITED, AUSTRALIA.

 

Now lets meet the three minds which were responsible for the realization of this electric dream. It will surely be an enriching and infinitely enlightening experience to look into the workings of such dynamic minds.

 

Dr. Ali Pervez: “I consider myself to be a man of simple beginnings with the innate desire to achieve the greater end. I did my MBA from IBA , Karachi (Pakistan). I did my Ph.D. in Industrial Marketing from the London School of Economics. My educational qualifications coupled with my three year stint at Apple Computers Inc. has put me in a position to extract maximum benefit from this business venture. I think that our Dust Buster is going to be a success in the untested Pakistani industrial market.”

 

Mr. Shahzeb Mahmood: ” Although I am still very young and inexperienced in the cut throat world of small business, I am all geared up about this new venture. I did my MBA from IBA, Karachi,(Pakistan) and got another MBA from the Wharton Business School with a major in Consumer Marketing. I feel that The Dust Buster is going to take the market into a era of environment oriented consumer products. We have, I feel, taken the right initiative.”

 

Mr. Saad Mahmood Rashid: “When around five years ago, I bought my first air-ionize, little did I know five years later I would be in the business of selling them. My early interest in environmental issues led me to do MS in Environmental Engineering from Massachusetts Institute of Technology. Then I returned to my birth place, Australia to get MBA in Environmental Management from Australian National University (Canberra). In Pakistan I met two like minded individuals which led to the creation of Ionics (Pvt.) Ltd. I believe this will go a long way in promoting the cause of environment in the Pakistani society.”

 

Apart from these three persons, the company has a host of individuals who are supporting the company. The services of these individuals have been acquired by the management after giving considerable thought to the company’s requirements and limitations.

 

Technical collaboration:  The technical collaboration for the company has been provided by Aironics Private Limited, Australia. This collaboration and its success is very important to the company for the basic reason that the company is dependent upon them for the supply of the air ionizers. This has been facilitated by the personal relations between the Australian owners of Aironics and Mr. Saad Mahmood Rashid. The management at Aironics is of the highest quality as is the product. Owing to this, the management at Ionics is in a position to guarantee the product’s quality even though the company is at a

disadvantage not being in a position to oversee the production of the ionize.

 

The Marketing Intermediaries:    Ionics’ management is of the view that owing to the nature of the product and its relatively unexplored market in Pakistan, marketing will play a very important role in the product’s success. For this purpose, the management has decided to acquire the  services of Manhattan Pakistan Limited (MPL), one of the leading advertising agencies in Pakistan. MPL has agreed to extend the credit line of the company. This has been made possible owing to the friendly and close relations between Messrs. Ali Pervez, Shahzeb Mahmood, Saad Mahmood Rashid and Mr. Babar “Wiley” Khan, the future leader at MPL.

 

The next important element in the marketing strategy of  Ionics is the placement of advertisements in the newspapers and on the television. While the advertisements on TV will come later on in the marketing strategy, the ads in the newspapers will be of a lot of importance. For this purpose, the services of The Financial Post will be acquired. Owing to the personal relations of Mr. Shahzeb Mahmood with the owner of the newspaper, the company will be extended a credit line here also.

 

Legal Advisor:   The company has obtained the assistance of Mr. Abdul Hakim Khan Kundi, Advocate Supreme Court of Pakistan. Being the father of Mr. Adnan Khan Kundi, a very good friend of the three owners of Ionics, he will be in a position to solicit  advice on the various legal and bureaucratic hassles which are faced by any new company. This would be made possible because of Mr. A.H. Kundi’s long and prosperous association with Pakistan’s judicial and legal system.

 

Auditors:  Although the workings of the company are not that extensive, however owing to the statutory requirements of the law, it is a must for the company that an external audit be carried out on a periodic basis. For this purpose, the company has acquired the services of  MS Fergusons (Pvt.) Ltd.

 

Bank:   The banking facilities will be provided by ANZ Grindlays, a bank of international repute.

 

Packaging:    The packaging is a very important part of the company’s marketing stratagem. For this reason the company has enlisted the services of the country’s leading packaging company, Packages (Pvt.) Ltd.

 

Insurance: We are insured through Adamjee Insurance, one of the leading insurance companies of Pakistan.

 

Cargo: The cargo services are an integral part in the company’s overall success. This is because of the fact that the company’s product is imported from Australia and it’s safe and timely passage is a must to the company’s success.  To meet these requirements the company has acquired the services of Freighter International (Pvt.) Ltd. Here also the company will be extended a credit line due to the personal relations between the owners of the cargo agency and Mr. Shahzeb Mahmood.

 

Security:   In the deteriorating law and order situation of Karachi, a good security agency has become a must. Ionic (Pvt.) Ltd. has enlisted the services of M.J. Securities (Pvt.) Ltd. This security agency is owned by Mr. Salman Hasnaat, a personal acquaintance of Mr. Ali Pervez.

 

 

Survey:    To help size up the potential market of the ionizers in Pakistan, the management consulted Dataline services (Pvt.) Ltd. This was made possible by the personal relationship shared by Mr. Saad Mahmood Rashid and the owners of Dataline services (Pvt.) Ltd.

 

Research: Although there is a dearth of genuine researchers in Pakistan, the company was fortunate enough to obtain the services of Mr. Muhammed Naeem, an experienced and well respected research scholar.

 

 

Public Relations:   The company’s public relations are viewed by the management as an important part of the company’s strategy. For this purpose the company has enlisted the services of Mr. Aamir Ali Rashid, a well connected and well known figure in the social circles of urban Pakistan.

 

PRODUCT PROFILE

Ionics (Private) Limited is introducing a totally new product into the Pakistani market, the air ionize. The name for this product has been chosen as the Dustbuster. The Dustbuster is a conventional air ionize which has the following salient features:

• Freshens stale air in a matter of minutes.
• Reduces smoke, dust, pollens, airborne bacteria.
• Contracts the air depletion effect of air conditioning.
• Reduces the static charge in the environment.
• Kills mosquitoes.
• It is highly ozone friendly and totally safe to use.

 

 

ORGANIZATIONAL STRUCTURE

 

The company has a relatively small structure. It employs a total of nineteen people. Of these, there is one Office manager, eight sales representatives, three secretaries, one telephone operator, one accountant, one driver, one inventory boy, two peons and a janitor.

 

 

 

The people working for Ionics (Pvt.) Limited are deeply committed to the organization’s goals and objectives. This is reflected in not only their work but also through their efforts towards the maintenance of the company’s standards. This is all made possible through the fact that the workers enjoy tremendously good relations with the company’s management. The cohesive and team oriented environment prevalent at Ionics is a key to the company’s success in the dangerous and cut-throat world of  consumer marketing. To understand better the marketing concept prevalent at Ionics, here is a comprehensive report on the company’s marketing activities and stratagem. It will give an insight into the marketing which has made Ionics such a success in such a short period of time.

 

 

 

MARKETING AT IONICS : A REPORT

( From the Desk of the Marketing department)

 

In the society of today, where people have got little money to spend and  an even lesser degree of  willingness to spend it, marketing strategies of a company are of vital importance. This is to say that the more effective a company’s marketing strategy, the better their chance to sell their product. Ionics (Private) Limited is also a firm believer in the importance of a company’s need for a good marketing strategy.

 

THE MARKET FOR IONICS  

 

Ionics (Private) Limited caters towards two very well defined and broad based market segments. These are,

• The domestic consumer market.
• The business market.

A closer look at each of these two market segments will give us a better idea of the market for Ionics (Private) Limited.

 

The Domestic market: From the very start, the market comprising the households of the urban area of Karachi have been central to the marketing policy of the company. This is simply because of the fact that our product is meant primarily for the household consumer. This fact can be attributed wholly to the nature of the product. The Dustbuster promises a healthy and clean dust-free environment. This is a commodity hard to get in one of the most polluted cities in the world. The educated man of today is acutely aware of the risks and hazards associated with the environmental pollution. Hence it is quite logical to assume that the person aware of these facts and presented with our product would be quite willing to buy it. However it is not that simple. Even though our target market are the households of Karachi, we have identified what we feel are the income groups most likely to patronize our product right away. These are,

• The upper middle class and
• The upper class

 

The reason we feel that these two income groups should be our main concern in the beginning is because of two main reasons. Firstly the level of education and awareness in these two groups is likely to be higher than the average. Conversely there is a greater chance of these people knowing the usefulness of our product and greater the chance that they would buy it. The second quite obvious reason that we have identified these two groups as our potential customers is because of the simple fact that they have the economic power to buy our product. People might be quite aware of the problems associated with the environment and even willing to buy our product, they may however be lacking the resources to actually go out and buy the Dustbuster. Hence these people are a blind alley as far as the company’s immediate marketing effort is concerned. In the long run however’ with the introduction of a lesser priced Dustbuster,

these people would comprise a ready market.

 

Some other reasons for the identification of these two income groups as marketing targets from the very start are social and cultural In nature. It has been noted that people comprising the urban upper class and the urban Upper middle class are influenced to quite a degree by the western world in their outlook on things. This, we feel, will also prove to be an advantage in our marketing strategy. Let us now see why this so.

 

People in the West are extremely environment conscious and have been so for the last two decades. In recent years they have even started to take active measures to ensure a healthier and safer environment. The people comprising the above mentioned income groups have emulated the west in this regard and thus it has become “fashionable” to be environmentally aware. Conversely if we promote our product as a tool, patented by the west as a way to achieve a cleaner and safer environment, we hope to strike the right chord and make these people buy the Dustbuster. Another very important social force which we feel is to our advantage is the fact that the members of these income groups are apt to compete with one another. Hence if we can promote the Dustbuster as being a “trend” as well as an item of necessity, we feel that this would be a very effective method of increasing sales and will give us wider product acceptability.

 

The Business market: The second market segment which we feel is a target for our marketing strategies is the industrial market. The Business Market in itself is a very broad and loosely applied term. It would be to our advantage to identify what exactly we mean by the term Business Market.

 

When we use the term, Industrial Market, we mean to identify the following entities,

 

• Factories and production facilities
• Small business organizations
• Restaurants and Hotels
• Department stores and shops
• Clubs and sporting facilities (such as Pool and Snooker                    halls).
• Hospitals and health care facilities.

The industrial market, in our opinion, will be easier to target than the household market. The reason for this is quite simply that organizations would find it more necessary  to do something to make the environment more acceptable as compared to the household consumers.      This is because of the fact that the people who are running the organizations are more pushed by not only their employees to provide a clean and hygienic workplace but Government regulations also force these people to adopt and implement an environment conscious image.

 

 

Also we will be engaging in  dual marketing strategy when we say that the domestic consumers will help us in targeting the industrial consumers. What we mean by this is that when people get used to seeing an air ionize functioning in their homes, they would want to see it running in their workplace. Add to this the fact that they are informed of the availability of a model especially for , say, their local restaurant or office, they would want to see it running there.

 

In this regard it is very important to identify our potential customers who have already shown interest in purchasing our industrial air ionize. These include some of the upcoming organizations from such diverse fields as the restaurant business( Bar-b-q Tonight, The E-bit, Soupy soup),hotels( Marriot, Pearl Continental, Avari Towers, Sheraton etc.) and other small private business organizations such as Vibes ( a music shop), Secret (a flower shop), Riff (a music magazine) etc. Owing to these advance orders which we have received, we have now a fair idea of the kind of industrial consumers we are targeting.

 

Another very important part of our industrial market would be the Government owned organizations. The reason that we are so confident of our success in the marketing towards the government is that the people are not in a position to reject our air ionize. If we are able to promote the ionize as a policy decision then the different departments would be hard pressed to buy it.

 

Having identified these two target markets, we are in a position to look into some of the broad based marketing strategies which we require in order to promote the air ionize or in our case, The Dustbuster.

 

 

MARKETING THE DUSTBUSTER

GENERAL OVERVIEW

The Dustbuster is undoubtedly an extremely new product in the Karachi market. Conversely, we will have to go strictly according to the conventions and traditions which are essential to the successful launching of the new products. The first step which is regarded as very important in any product’s launch is to conduct a complete study of firstly the internal planning which is required  within the company and we should know how to structure our planning and what methods to utilize to make our planning as effective as possible. There are four broad ways in which we approach the parameters of planning for the launch of the market. Let us now define these parameters in relation to The Dustbuster.

 

STRATEGIC COMPANY PLANNING

The first step in the planning process is the definition of the company’s mission. This we have done through the formulation of our mission statement. However for purposes of clarity the mission statement for Ionics (Private) Limited is presented here:

 

Ionics Private Limited is a dynamic and an environmentally friendly company with the will and enthusiasm to explore new vistas in the application of technology to everyday environmental friendliness.

 

It is our sincere objective to be upheld by our valued customers as a company strongly committed to the fulfillment of their needs and conversely those of the environment by not only recognizing but also striving towards the achievement of their needs an desires.

 

We will try our level best to optimize the resources at hand in the most efficient and proficient manner possible, the control of quality being at the top of our business agenda while providing our employees with a supportive environment to help us in our quest.

 

Having clearly defined the company’s mission, we are now in a position to conduct a situation analysis for Ionic (private) Limited. This in fact is the beginning of what is known as strategic marketing planning for our company.

In order to ascertain the market potential for The Dustbuster, The marketing team at Ionics has conducted a SWOT analysis into the feasibility of the company’s product

 

THE SWOT ANALYSIS

The SWOT analysis is regarded in marketing as the base from which all marketing decisions are made. The SWOT is an acronym for the words Strengths, Weaknesses, Opportunities and Threats. For Ionics (private) Limited the following SWOT situation exists:

 

Strengths: The strengths for the company lies within the internal organization of the company. In the case of Ionics, the biggest strength lies in the fact that it is a very compact and well managed organization. In the context of most markets, size is an advantage. However in the world of Small business Units, it is of all importance that initially the company be compact and well managed rather than large and inefficient. The second strength upon which the company intends to capitalize is its clearly defined market segments. The company’s sales force is clearly divided into two broad categories, each with its own heads of departmental heads and very clearly defined goals and objectives. Another significant strength for Ionics(Private) Limited is that the company is free from the hassles of production. The company is importing all its units from Australia and hence can divert most of its resources towards the marketing and distribution of the Dustbuster.

 

The other significant strength for the company lies in. the composition of the management team at Ionics. As the management also owns the organization, hence it gives the management an extra burst of dedication for the company. The management is very highly qualified and knows the market in Pakistan very well.

 

Weaknesses: The major weakness which we face is that the company is extremely new to the field. There is a lack of experience in this particular field of marketing. The company’s product is extremely new. While this can be a major opportunity for the company, it also means that the market for the Dustbuster is totally unknown and untested.

 

 

Previously it was mentioned that the small size of the company was a strength for the company. However it may be mentioned here that the company’s small size and organizational structure could also prove to be a disadvantage in the company’s long run expansion plans. What wee mean by this is that the company is composed of a limited number of personnel. While right now these people are clearly divided in their duties and objectives, it will be very difficult to continue with the present structure in the case of the company’s expansion.

 

Opportunities:  The market in Karachi presents the company with unique opportunities. The market for the air ionizer is totally new and the creation of demand for the product will result in complete market domination. There is a total lack of competition.

 

The major opportunity for the marketing team at Ionics is that while there is presently no demand for the product, the reason is that there was no product like the Dustbuster before. The pollution problems faced by the city present a unique market for the air ionizer.

 

Another very strong opportunity which exists for the company is that we have a ready market for the company’s differentiated products in Karachi. There is a very clear domestic consumer market in Karachi like any other urbanized city. However the unique feature is that the company also has a vastly unexplored and ready industrial market within the parameters of the same city.

 

Threats: The major threat for the company is that we are a new company and any market destabilization will result in huge setbacks for the company. The lack of competition and conducive external market environment means that there is a highly advantageous lack of that many external threats for the company.

 

A major threat for the company is the lack of environmental awareness among even the educated classes of Karachi, the most progressive city of the country. A psychological disadvantage we face is that the city’s population has much more to worry about than the air ionizer. After all a person will only be able to buy our air ionizer if he lives through the city’s spate of violent incidents.

 

THE COMPANY’S OBJECTIVES

The company has two clear cut  objectives which are classified into two broad categories. These are:

• The company’s financial objectives
• The company’s social objectives

 

THE FINANCIAL OBJECTIVES OF THE COMPANY: The main  objective of the company in this context is to achieve a 20% increase in sales annually. The financial objectives of the company have been discussed in detail in the financial policy section of the report.

 

THE SOCIAL OBJECTIVES OF THE COMPANY: The social objectives of the company are very environmental in nature. The major objective of the company in this regard is the increase of environmental awareness among the people and help them do something about the worsening environmental situation of the city.

 

THE COMPANY’S STRATEGY

To achieve the company’s objectives, we will be employing two broad strategies to deal specifically with the company.  These are:

• Run an intensive media campaign through the company’s leading newspapers. This strategy will be employed to achieve the company’s domestic consumer marketing objectives.

 

• Our product’s personal selling will be carried out as a second strategy for the company’s marketing objectives. This will be an effective tool in marketing the product to the company’s industrial consumers. To implement each of these strategies, the company’s marketing department intends to employ certain tactics. These are now explained.

 

MARKETING TACTICS FOR THE COMPANY

Ionics’ marketing tactics will be especially designed to meet the demands of the different segments which we are trying to target. Around a week before the launching of the Dustbuster in the market, we plan to place articles in the newspapers which shall highlight the different hazards associated with the environmental pollution in the city. Alongside these articles  will be advertisements related to the launching of the Dustbuster in the market as a new product. This effective placement of advertisements will be made possible due to the contacts  which the management of Ionics has in the newspaper business such as those with the English dailies Dawn and The Financial Post.

 

To achieve our marketing objectives in the industrial market, we intend to employ the services of our sales team and their skills at personal selling. The industrial market sales force will be sent to the organizations’ managers and they will be informed in detail about the Dustbuster and its effectiveness in controlling the environmental problems. At the same time, we will also send out the sales force to personally sell the product to the government organizations and convince them of the importance of the Dustbuster in the relegation of environmental pollution, specifically air pollution.

 

MARKETING MIX FOR IONICS

The marketing mix for the company are those factors which are crucial to the company’s marketing decisions and policies. The marketing mix for any company comprises of four elements. These are,

• Product
• Promotion
• Price
• Distribution

 

As we have two different market segments hence the marketing mix is general rather than specific to the company’s marketing requirements. This will be studied in greater detail in the marketing strategies for the company’s segments.

 

PRODUCT-MARKET GROWTH MATRIX

The company has some specific objectives which revolve around the company’s financial growth and also require an increase in the company’s market domination. The marketing team at Ionics intends to achieve these objectives through careful consideration of alternatives and options. One of the effective ways to chart the objectives of Ionics is through the product market growth matrix.

 

Traditionally the matrix consists of the following elements,

• Market Penetration
• Market development
• Product development
• Diversification

 

At Ionics, we are more interested in the first element of the growth matrix which is Market penetration.

 

Market penetration: Ionics will try to sell more and more of its Dustbusters to its present markets which consists f the domestic consumer segment and the industrial consumer segment. This will be achieved through greater spending on the company’s advertising budgets and perhaps an increase in the company’s sales force.

 

The next step in the marketing process for Ionics is to identify the position of our intended consumer in, what is known as, the New Product Adoption model. The different categories which comprise the adoption model are as follows:

• Innovators
• Early adopters
• Early majority
• Late Majority
• Laggards

 

 

According to the research carried out by the marketing team

at Ionics in collaboration with Mr. Mohammed Naeem, our research consultant, the consumer for the Dustbuster lies in the following adoption categories.

 

The Innovators: These are the people who are traditionally young and more willing to experiment than the others. They also fall into the income group which we have identified as possibly our customers in the early days of the Dustbuster. These would, in our opinion, comprise the young business tycoons and yuppies who dominate the business scene at Karachi. As such these people would not only be a market for us in the domestic consumer category but also be a source of sales in the industrial market.

 

The Early Adopters: According to our estimates, nearly 40% of our total early adopters are these people. This includes the innovators, the early adopters and the early majority. These are the people who, we feel, comprise our immediate and ready-to-be-sold-to market.

 

The Early Majority: These are the people who we feel are the most important consumers in the long run.  These consumers, whether they belong to the domestic consumer or the industrial consumer section will be crucial in spreading the word around about the phenomenon known as the Dustbuster.

 

The Late Majority: These people comprise the second portion of our target market. Although we do not feel that we would be able to sell to these people immediately or even in the near future after the launching of the Dustbuster, They do comprise a market in another four to six years.

 

Laggards: These people can go to hell and screw the devil’s wife for all we care.

 

Having identified the particular market segments and the people who comprise these segments, it is now time to analyze the specific marketing strategies which we at Ionics (Private) Limited will be using to target the two market segments namely the domestic consumer and the industrial consumer.

 

The following two reports have been compiled by the two marketing departments functioning at Ionics to achieve our marketing objectives in these two market segments. It will give a very clear picture of what the marketing people at Ionics are doing to sell the Dustbuster.

 

MARKETING REPORT FOR THE DUSTBUSTER

( FROM THE DESK OF THE DOMESTIC CONSUMER DEPARTMENT)

 

 

MARKET RESEARCH

To ascertain the market for the Dustbuster in the domestic     consumer market, the department has carried out marketing tests and research. This research was done with the help of the following tools’

• Mohammed Naeem, Research Scholar.
• Dataline Services (Private) Limited
• A formal investigation by the Ionics marketing team

 

Of these tools the first two are self explanatory. However let us now look at the informal research which was carried out by our marketing team and what methods were employed by them:

 

COLLECTION OF SECONDARY DATA: The Ionics research team utilized the data which was gathered by them through the libraries at the Institute of Business Administration, the university library, and the library at the applied economics research center.  These were the sources of secondary data and apart from this we relied upon the findings of Dataline services in this regard. Apart from this we also had the help of two advertising firms namely Advertising and Media Consultants and Manhattan Pakistan Limited (MPL).

 

COLLECTION OF PRIMARY DATA: In our opinion the most important type of market analysis for us was the direct collection of data. The reason for this is quite simply this that ours is a totally new product. Conversely for the market in Karachi there is absolutely no precedent upon which we can base our research to test the market. Hence we had to go out into the field and find for ourselves what the consumer’s reaction would be to this new product. For this purpose we employed the following methods in direct marketing research:

 

MALL INTERCEPT: To get an idea of who our potential buyers would be, we made surveys in such places as Clifton’s shopping markets, Defense shopping stores and shopping places and other points of convergence in Clifton, Defence and the K.D.A. schemes. The reason we restricted ourselves to these localities was that the people living in these areas correspond to the income groups we were looking for in the early stages of the market adoption process.

 

FOCUS GROUP: We decided to use people from the income groups wee hoped would patronize the Dustbuster in the early stages of the marketing process. We invited 17 people belonging to the income groups of middle and upper meddle class from such areas as Defence, Clifton and K.D.A.

 

MARKET STABILIZATION

What we mean by this at Ionics is quite simply  that once we have carved a market for our highly untested product, we take measures to ensure that not only do our consumers continue to use the product with satisfaction but they also spread a good message regarding the Dustbuster. In this regard, we have to take care of the following  factors which we feel are essential in  order  to ensure that the consumer  who buys our product is not disappointed in the quality of the product. We feel these are some of the considerations which the consumer will have in mind when he is looking over the Dustbuster.

 

PRODUCT NEED EVALUATION: The Dustbuster is quite obviously not an impulse buy for anybody, unless of course he turns out to be a fanatical environmentalist. This kind of buying behavior while very good for our sales is not at all realistic. Most of the people who look at the Dustbuster will probably be asking the sales person, What is this thing and what does it do? While we would already have highlighted the Dustbuster’s attributes through advertisements in the papers and various selected magazines, nevertheless we expect this question to be asked. To this the salesperson (who would be briefed extensively by us) will reply “ The Dustbuster is a revolutionary  way to to fight the city’s pollution, dust, smoke and trillions of mosquitoes, all at the same time!”

 

Through this kind of an approach we hope to make the customer realize that the product inn front of him is not a toy or gimmick but a serious way to fight off smoke, bad air and those flying menaces called mosquitoes.

 

THE INVOLVEMENT LEVEL: We feel that the potential customer for the Dustbuster will be spending a considerable amount of time in making his decision regarding our product. This is because of two reasons,

 

• Nature of the product
• Price of the product

 

The nature of our product is such that it will be an investment for at least two to three years after the purchase has been made. It is not a product which is something to be bought every day.

 

The second reason we feel the consumer will be at a high involvement level is due to the price of the product. Although our initial consumer will in all probability be from the upper and upper middle class of urban Karachi, they too would consider the price important. This has more to do with human nature than money in the wallet. Lets explain this further.

 

Anybody who is about to buy a new product, even a person with a Rs.50,000 pay packet is apprehensive about his choice. The Dustbuster would be more so because of the simple fact that it is a totally new product in this country. It has never been heard of before and it will take people some time to make up their minds as to its usefulness or otherwise.

 

EVALUATION OF ALTERNATIVES: Once the potential customer has made up his mind, he would decide among the alternatives. This in our case would be close to nonexistent. The only alternative a person would have to the air ionizer in this city, would be to make do with the smoke and bad air. In our opinion, quite a healthy choice as far as the Dustbuster is concerned!

 

POST-PURCHASE DISSONANCE: This is the one problem which we feel should be eliminated at all costs. Our consumer should not feel, having bought the Dustbuster, that they’ve made an unwanted purchase. This could be taken care of by applying the following strategies

 

Following the sale made to the consumer we send him information regarding the various problems related to pollution which he is in a position to avoid having bought our product.

 

Avoidance of Post-purchase dissonance through the regular but selective publication of articles and advertisements in the newspapers. These advertisements would not be aimed at increasing sales directly. Instead these would focus on the consumer who has bought the product and reinforce his confidence in the product. This in turn would prompt other potential consumers to weigh the pros of purchasing the Dustbuster. An example of such an advertisement is given.

 

CULTURAL INFLUENCES: Last but not least we are looking for an advantageous sphere of influence to be exhibited through the Western subculture which is prevalent in the upper and upper middle classes of Karachi. If Mr. Malik buys it because of Mr. Jones then the trend in the Karachi society is that Mr. Rashid will buy it under pressure to imitate perhaps the higher income based Mr. Malik The marketing team at Ionics would be quite happy with such a response. Such a buying response can also be triggered by initiating a closely related need for self respect. The If-he-can-buy-it-so-can-I syndrome. Again very advantageous to the firm’s sales

 

Other factors which we feel would have an influence on the sales of the Dustbuster are the personality of the consumer (an Innovator) and attitudes of the consumer (an Environment conscious individual).

 

WHAT WILL MAKE THE CONSUMER BUY

THE DUSTBUSTER?

No matter how we put it the final question for any firm remains: What will make the consumer buy? It is no different at Ionics. The marketing team at Ionics has come up with what we feel are the keys to unlocking this puzzle for the Dustbuster. These findings, deliberations and proposals are presented in the final part of our report.

 

As is the case with any other consumer product, we have to identify the reasons and factors which will prompt the consumer into buying our product. These are,

 

• Packaging and Branding of the product.
• The Price of the product.
• The effective promotion of the product.
• The proper management of the sales effort
• The distribution of the product.

 

PACKAGING AND BRANDING OF THE PRODUCT

The first element in the determination of the product’s marketing strategy is the determination of a suitable brand name for the product. This name could be based on either the product features and attributes or simply it could be a whim of the owners. In this case it is the latter based on of course studied and educated gut instincts. The Dustbuster is quite a suitable name, in our opinion. In marketing terms, a very sellable one. This being the major consideration in the naming of the product, we fully agree with the choice of the name for the air ionizer.

 

The packaging of the Dustbuster is a matter of significance. In our opinion, the packaging of the product should be such that it clearly accentuates the unique and useful features of the Dustbuster. In this regard, the choice of MPL and Packages (Private) Limited is very suitable one. They would be aware of the specific ways in which to most effectively highlight the various features of the product so as to affect the psyche prevalent in urban Karachi. Inspite of this however, the marketing team at Ionics feels that the following factors would be useful in the packaging of the product:

 

• The labels on the packaging should very clearly describe the various features of the Dustbuster.
• It should have an environmentally friendly look so as to be in conformity with the image of the product we are trying to portray.
• The product package should be of a sophisticated look as we are trying to penetrate the educated and upwardly mobile urban populace.

 

EFFECTIVE PROMOTION OF THE PRODUCT

Once we have decided upon the proper and appropriate packaging and labeling strategies for the product, the next step is to decide upon the specific types of promotion which we need for the Dustbuster. In our opinion, the following channels of promotion would be suitable for the launching and the beginning period  for the Dustbuster.

 

• The English dailies.

Dawn, The News, The Financial Post, The Pakistan Times etc.

 

• Selected Magazines.

(Herald, Newsline, The Friday Times etc.)

• Environmental information letters.
• Banners and placards at selected shops and retail outlets.

(Such as Agha’s, Shaheen, Delton etc.)

• Point of sales displays, mobiles and Trivisions.

 

Specific advertising strategies and tactics have been given in the prior section dealing with Market strategies.

 

MANAGEMENT OF THE SALES EFFORT

In order to have effective marketing of the product, we need to coordinate the sales effort of the company in a very aggressive but efficient manner. We have to take care of the fact that we are a small firm with  limited resources. The domestic consumer marketing department has an annual budget of Rs.400,000 and we have to put this to the best possible usage. In this regard we are looking to the guidance from MPL, Mr. Naeem and our own marketing management.

 

 

 

THE DISTRIBUTION OF THE PRODUCT

The most important aspect of the marketing aspect for our new product will be the effective distribution of the product. For this purpose we should take the following factors into consideration:

 

• The income groups we are trying to target are mostly located in the areas of Defence, Clifton and K.D.A. Schemes.
• Conversely the product should be placed in those retail outlets which are frequented by the members of these income groups.
• We advise the placement of the product in such retail outlets as Agha’s supermarket, Shaheen supermarket, Delton’s store etc.

 

 

 

THE MARKETING REPORT ON THE DUSTBUSTER

(FROM THE DESK OF THE BUSINESS MARKETING DEPARTMENT)

 

The market for Air Ionizers is as yet unexplored in Pakistan. Especially the business sector is very much deficient in this regard. This prompted us to conduct a comprehensive marketing research of the Pakistani industry. This research was carried out under the guidance of Mr. Muhammad Naeem, Professor IBA.

 

The services of DATALINE Pvt. Ltd. were obtained for the use of their data base. Since our product is a new one for the Pakistani market, therefore we decided to conduct a concept test for our product in the business market of Pakistan. We wanted to determine the potential size of the business market for our product and to find out the attractiveness of the idea to potential consumers.

 

Our objective was to conduct a sales analysis and also a growth analysis. Our research hypothesis was that “The business market for AIR IONIZERS in Pakistan is very big and there are enough consumers to support the launch of DUST BUSTER. The informal and formal investigation was carried out by DATALINE SERVICES. Their report on the project was very  encouraging and we decided to enter the business market.

 

 

MARKET SEGMENTATION

The business market is segmented on the type of business the firm conducts. There are following categories:

1. Hotels
2. Restaurants
3. Small business
4. Government sector
5. Production facilities
6. Corporations

 

This segmentation will help us in developing specialized marketing tools for the respective segments. Our training program for our sales personnel will help them in developing skills for particular industries.

 

A special feature of our product is the derived demand. This would be possible by the influence of the employees and consumers of the firms. The demand for our product is not widely fluctuating as the industrial growth is expected to remain steady.

 

The placement of our company is very helpful to us . This is because most of the industry is situated in Karachi.

Most of the businesses would be directly buying from us. As the product is expected to last a long time, therefore we will be continuously searching for potential new buyers.

 

The brand name of our product is the same for both business and consumer markets i.e. DUST BUSTER.

 

PACKAGING

The packaging for the business sector is different from the consumer sector. As the air ionizer for the business market is bigger than for the consumer one, therefore the outlook would be comparatively subtle. The brand name would be printed on all the six sides and so will be the company name. This is in accordance with our company policy of establishing goodwill. The overall effect of the package would be environmentally friendly. The product’s features will be displayed on two sides. On the front of the package there will be a picture of a clean and healthy business establishment.

 

At present the product looks like a multiple rocket launcher. This design would help enhance the “powerful cleaner”  image of the product. The color of the package would be a green background. The name of the product would be written in red. As this will show that the protector of the green environment has arrived with a red vengeance.

 

Our product carries a five years warranty. Postsales services will be provided by the company free of charge. There will be nominal charges for refills of pins. Labor will be free.

 

PRICE

Our pricing objective for the business market is to maximize profit. Our price is achieved by adding a markup to the cost of goods sold. This markup is a confidential figure.

 

Considering other related products our product is priced at a higher level. This is not without reason. The main strength of our product is the value it provides. The effects of our product are very much visible in a short period of usage. We hope to take advantage of this strength. Another reason for the high price is the life of the product. The DUST BUSTER has a very long life. This is due to the fact that it does not have a complex machinery. There will only be the need for refills of pins. These will be fitted free of labor charges and will be charged a smaller price. The business market will be willing to pay a high price for our product as this product will help them portray an environmentally friendly image. These days this is a very important consideration for businesses. As the Pakistani public is becoming aware of environmental issues, there is a general support for a cleaner environment. Our basic strength of pricing is the importance of environment in people’s lives.

 

Our pricing strategy for the business market may be termed market skimming pricing. Our prices are set high to promote a high quality image of the product. In relation to geographic pricing strategy ours would be uniformed delivered pricing. It will be the same price for every buyer regardless of the geographic positioning of the buyer. As regards to our discounts policy, we do provide a discount of 2/10 net 30. This means that the buyer is given a cash discount if it pays within ten days of purchasing the product. Otherwise the buyer is required to pay by the end of the month from the day of purchase. Special relaxation may be allowed at the discretion of the directors.

 

DISTRIBUTION

The distribution of our product will be made by the company itself. The company’s sales personnel for industry will be trained to drive the company van. Mr. Adnan Khan already has experience in such matters. The orders will be taken personally by the sales people or will be taken by phone. Mr. Arrive Merchant, telephone operator, is being given training for this purpose. The delivery of the consignment will be made within two days of registering the order. The business establishments will find us very efficient in this regard.

 

PROMOTION

The promotional activities targeted at the business market will include the following:

1. Personal selling
2. Advertising
3. Public relations
4. publicity

 

1. Personal Selling : Personal selling is very important to our success. The sales people will impart a image of the company and the product on the buyers. As the business market is small in comparison to the household market, therefore the personal contact is very important. Of the three sales personnel , Mr. Adnan will be a driver-sales person and a creative sales person too. This decision is taken due to his excellent driving skills and his genuine creativity. Ms. Amber will be the missionary sales person, as she will be responsible for describing the product and look after the promotional articles in newspapers. Ms. Narmeen will be the outside order taker due to her exceptional hearing ability and her good hand writing.

 

An important concept behind our personal selling strategy is team selling. Our sales personnel will go out as teams and do what they are good at. Different strokes for different folks. The handsome commission will be given to the team. There will be continuous training for our sales personnel. We intend to start out with three sales people for the business market. This number, however, is expected to grow as the business expands. The applications of Mr. Babar and Mr. Salman are under process.

 

The current sales force has been selected after a tough and nerve shattering process of selection. These sales personnel are motivated not only by the extravagant commissions but also by their innate desire of providing a healthier and clean environment to the children of tomorrow.

 

2. ADVERTISING : Advertising is very important to our product promotion. The company has hired one of the leading advertising agency of Pakistan, Manhattan Pakistan Limited, for the advertising of our product. The afore mentioned agency is famous for its past promotions of environmentally friendly products. Our interview with Mr. Babar Khan made us realize how much the company cares for the environment. Mr. Babar was willing to do our campaign for free, due to the environment friendly nature of the product, however we declined the offer.

 

As explained by Mr. Babar Khan, our advertising campaign would aim at creating a goodwill for the company as well as the product itself.

 

The objective of our advertising campaign is to tell the industry about our product. As the product is new, therefore the ads would focus on the characteristics of the product and the development of an image for the product and the company. The allocated budget for advertising concerning the business sector is Rs.200,000 per annum. In the initial three to five years the advertisements would mostly be in the newspapers. After making some profits and maintaining a good capital, advertisements will be placed in television.

 

The intended message of our advertisements will be about the product’s contribution to a healthier environment. The advertisements will concentrate on emphasizing the benefits of the product. As the target market for the business division is different from the consumer division, therefore the advertisements will differ from each other. There will be goodwill ads which will be funded by a joint account.

 

The business market will be covered with ads appearing in special newspapers. These include : The Financial Post, The Daily Beopar, etc. Special journals of various trade and industry bodies will also provide a platform for our advertisements. These ads will be placed next to articles concerning environmental issues. Special emphasis will be given to the regularity of these ads. This is because the management believes in the continuous supply of information to the users.

 

The ads have been made by highly qualified people. They project an image of quality, reliability and a dedication to the environment. These are precisely the images of the company that the management wants to portray to the target market. A special touch to the ads concerning the business market would be the pictures of businesses making profits and using our product. The intention of these ads will be to associate the DUST BUSTER with the success of the business. There will also be interview quotes of consumers advocating for a clean and healthy environment. Following is an example of our advertisement.

 

 

THE DUST BUSTER IS HERE.

 

EMPIRES RISE AND FALL

BUT

PROFITS SHOULD ALWAYS RISE

AND WHAT BETTER WAY TO ACHIEVE PROFITS THAN INVESTING IN A CLEANER ENVIRONMENT

FOR YOUR BUSINESS.

By: IONICS (PVT.) LTD

 

3. PUBLIC RELATIONS and PUBLICITY : Public relations are an important consideration for any business. Our company has hired the services of Mr. Aamir Ali Rashid in this regard. Mr. Aamir is famous for his social and vocal skills. The company believes that he would be a great asset for the company in the coming years.

 

Due to the personal contacts of Mr. Aamir, in the business circles of Pakistan, the company will be able to keep cordial relations with the business community. Apart from Mr. Aamir, the owners themselves are very prominent figures of today. This is expected to bolster relations between the public and the company.

 

Special emphasis is being placed on the publicity of the company. The management plans to hold seminars and workshops on environmental issues relating to business and industry. Various speakers have already showed their willingness to participate in such seminars, notable among them is Mr. Eqan Ali Khan of IBA. The business sales force of the company is also being trained for delivering talks to businessmen on environmental issues. The aim is to portray the company as an environmentally friendly enterprise.

FINANCIAL POLICY

The company believes in transparent financial matters. For this very reason the company has appointed Mr. Nick Leeson as its accountant and Messrs. Fergusons as its auditors. The expected sales growth are forecasted at twenty percent annually. This sales are expected to start at around seven hundred units in the business sector for the first year. For the household level the sales are expected to begin at a level of around sixteen hundred per annum.

 

The profit margin for the household sector is lower than the business sector. This is because of the additional generation in profits that the businesses will be able to make by using our product. The company is exempted from income tax for the first year. This is not much help as the company is not expected to make any profits in the first year. Profit generation  will start and keep on rising from the second year onward.

 

As the air ionizer itself is imported from AIRONIC (Pvt.) Ltd. of Australia, therefore the price is paid in foreign exchange. This disadvantage has been covered by the higher profit margin in business sales. The payment for the units is made in the following  month of purchase. This is done through the checking account being maintained at ANZ bank.

 

The collection is done in the same month in which the sale occurs. As the business is on a small scale and there is very much personal contact involved, therefore  the firm has nominal provision for bad debts. This provision is not recorded in an allowance account, rather it is charged directly to an expense account when it occurs. The collection  for these debts will be taken up by our consulting lawyer Mr. Abdul Hakim Khan Kundi. Non-payments of debts will result in due legal action from the company. Special relaxation may be allowed by the directors. It is hoped that this strict warning will act as a deterrence to non-payment and the need for legal action will not arise.

 

The company allows discounts of 2/10 net 30 to all buyers. This will not be recorded by company accounts in separate accounts, rather the sales will be showed at their net value.

 

The assets of the company are expected to have a hundred percent increase in the coming five years. This increase will help us in expanding into other field of environmental protection.

The company uses standard accountancy rules for its bookkeeping. The firm also uses a comprehensive cost accounting system for its operations. The packaging material is provided by PACKAGES LIMITED. As we have no control over the manufacturing of the product, therefore a special emphasis is placed on the packaging of the material. This packaging will increase costs but in the long run it is hoped that it will create the desired image of our product and our company.

 

The firm plans to offer a subscription of its common stock after ten to fifteen years. This will help us expand in the other fields. As it is obvious, that our hopes are high and it is evident that they will be realized in the near future.

 

A special acknowledgment is due to Mr. Taseer Hadi, who gave us very valuable advice in the development of this financial policy.

 

 

 

TECHNICAL COLLABORATION

The company is especially concerned about its supplier. The company is provided the air ionizers by AIRONIC (Pvt.) Ltd. of Australia. An agreement has been signed between the two parties, according to which AIRONIC Ltd. has agreed to a transfer of technology in the next ten years. It is hoped that this space age technology will help the company and benefit the citizens of Pakistan.

 

This collaboration will be further expanded by the visits of the directors to their affiliates. Mr. Saad Mahmood Rashid will be of great help in this regard, as he regularly visits Australia twice a year.

 

In this regard the company plans to send its sales personnel to Australia for specialized training in the selling of Air Ionizers.

 

The delivery of the product from Australia will be made by air cargo. The payment for which will be made by the company in Pakistan. For this purpose the company has hired the services of freighters international. Due to the sensitive nature of our product it is of utmost importance to handle the product carefully. The freighters have been given special instructions in this regard.

 

It is hoped that the establishment of IONICS (Pvt.) Ltd. will send Pakistan into the twenty first century with a clean and healthy environment.

 

 

 

Table of Contents

Page#

Introduction                                            1

Mission Statement                                       2

Company Profile                                    3

Product Profile                                    9

Organizational Structure                                10

Marketing at Ionics                                     13

• The Market for Ionics    13

Marketing the Dustbuster-General Overview          20

• Strategic Company Planning    20
• SWOT analysis 22
• The Company’s Objectives    25
• The Company’s Strategy    26
• The Company’s Marketing Tactics    27
• Marketing Mix    28
• Product Market Growth Matrix 29

Marketing Report for the Dustbuster                34

(Domestic Consumer Department)

 

• Market Research    34
• Market Stabilization    36
• What will make the consumer buy the Dustbuster?    41

Page#

• Packaging and Branding    42
• Effective Promotion of the Product    43
• Management of Sales Effort    44
• The Distribution of the Product    45

The Marketing Report on Dustbuster                      46

(The Business Marketing Department)

 

• Market Segmentation    47
• Packaging    48
• Price    49
• Distribution    51
• Promotion    51

Financial Policy                                        58

Technical Collaboration                                 61

Proforma Balance Sheets and Income Statements      63