Download - Inernship Report on Pakistan Tobacco Company
Table of Contents
Synopsis.....................................................................................................................................31 Introduction.............................................................................................................................4
1.1 Central background Introduction................................................................................41.2 Company background...................................................................................................6
1.2.1 Organization Structure..............................................................................................71.2.2 Distribution Network................................................................................................71.2.3 Company Vision........................................................................................................81.2.4 Company Mission.....................................................................................................81.2.5 Company Values.......................................................................................................81.2.6 Company Goals.........................................................................................................81.2.7 Company Principles..................................................................................................81.2.8 Corporate Social Responsibility..............................................................................111.2.9 Business Process Re-engineering............................................................................121.2.10 Environment, Health & Safety (EH&S)................................................................12
2 Company Analysis................................................................................................................142.1 Business Performance..................................................................................................14
2.1.1 Sales Performance...................................................................................................142.1.2 Contribution to the National Exchequer.................................................................142.1.3 Operating and other cost.........................................................................................142.1.4 Cash flows...............................................................................................................15
2.2 Financial Analysis........................................................................................................152.2.1 Ratio Analysis.........................................................................................................15
2.3 Human resource Analysis............................................................................................202.3.1 Classification of workers.........................................................................................202.3.2 Areas Covered by HR department..........................................................................212.3.3 Mutual Industrial issues..........................................................................................232.3.4 Retirement...............................................................................................................23
2.4 Marketing Analysis......................................................................................................232.4.1 SWOT Analysis......................................................................................................25
3 Environmental Analysis........................................................................................................273.1 Industry and Market Analysis....................................................................................27
3.1.1 Product line of PTC.................................................................................................273.1.2 Growth rate of entire industry.................................................................................27
3.2 Competitor analysis.....................................................................................................283.2.1 Major Competitors..................................................................................................283.2.2 Market Shares:........................................................................................................293.2.3 Goals.......................................................................................................................293.2.4 Competitive Strategies............................................................................................30
Trade Marketing and Distribution Structure............................................................................31Distribution in Islamabad.........................................................................................................31
Islamabad Market..............................................................................................................31Distribution Chart..............................................................................................................32Distributor Operations......................................................................................................32
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Distributor’s channel...........................................................................................33Sales.....................................................................................................................................33Operations...........................................................................................................................34
4 Task 1....................................................................................................................................384.1 Role profile of the FSO................................................................................................38
4.1.1 Introduction.............................................................................................................384.1.2 Findings...................................................................................................................394.1.3 Recommendations...................................................................................................404.1.4 Conclusion...............................................................................................................414.1.5 Results.....................................................................................................................41
4.2 Salesmen beat revision.................................................................................................424.2.1 Introduction.............................................................................................................424.2.1.1 Results..................................................................................................................424.2.2 DSR Problems.........................................................................................................424.2.3 Solution...................................................................................................................424.2.4 Beat updating..........................................................................................................43
4.3 RCS updating...............................................................................................................434.3.1 Result.......................................................................................................................43
4.4 Key accounts Management..........................................................................................44Appendix..................................................................................................................................45
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Synopsis
One can learn through different ways. But to get the first hand knowledge, one should put
itself in practical and natural environment. This is the utmost purpose of internship, which we
supposed to do for at least six to eight weeks. This summary is written to discuss in detail the
“Steps to improve the Distribution in Islamabad”. In this report I have addressed the
problems at the distributor shop. In the very beginning of this report I have defined the
company history and distribution in Islamabad follow with distributors operation. I have also
written about the facts (findings) which I have gathered and then I have given the
recommendations in second phase Role profile of FSO is defined with its main points and
result and new Role profile is also attached with it. In the third phase of this report I have
discussed the problem of salesmen route plan and its solution, format of DSR and RCS up
dating and Last but not least Key accounts Record retention.
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1 Introduction
1.1 Central background Introduction
Pakistan’s tobacco industry has been a traditionally dependable source of government
revenue, contributing around Rs27.5 billion per year — the equivalent of 4.4% of Pakistan’s
GDP. It has the largest yield of any crop and employs some 1 million people.
It was recently announced that Philip Morris acquired Lakson Tobacco, the second largest
tobacco manufacturer in Pakistan. Philip Morris already owned 47% of Lakson’s stock, and
then bought another 50%. Lakson Tobacco is valued at Rs41.07 billion ($674.9 million).
Let’s see how the world tobacco leader tries to lure our gullible leaders.
Pakistan is one of 146 countries that have ratified the global tobacco treaty, and in doing so
has taken a great step forward in protecting the health and lives of its citizens from the
tobacco epidemic. Formally known as the World Health Organization (WHO) Framework
Convention on Tobacco Control (FCTC), the treaty aims to reverse the tobacco epidemic by
changing the way tobacco corporations operate around the world.
Pakistan banned indoor public smoking and all tobacco advertising in 2002. It is illegal to sell
tobacco products to anyone under the age of 18 or within 50 meters of a school. Smokers who
violate this law are fined heavily. Even more interesting, advertisers and sellers of tobacco
who are found to violate these laws can go to prison. This is what appears on paper; in reality,
the prime minister of the country is seen encouraging a tobacco company and helping to
bolster its image.
A colour advertisement displaying logos of the Government of Pakistan (GoP) and Pakistan
Tobacco Company (PTC) was published in newspapers to announce the foundation stone-
laying ceremony of Ghourghushti Environment Park in Attock district. This park is a
collaborative effort of PTC and the GoP. In April 2007, the prime minister laid the
foundation stone.
Corporations like PTC (a subsidiary of British American Tobacco) and Lakson (now almost
totally owned by Philip Morris/Altria) have attempted to interfere with the implementation
and enforcement of the global tobacco treaty in Pakistan. These corporations use their
tremendous political influence to weaken, delay and defeat tobacco control legislation around
the world.
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Profit margins for the two Pakistani tobacco giants remain very high and they pay
relatively high taxes compared to businesses of similar size, which makes them popular in the
finance and tax departments. These departments, like the prime minster, fail to measure the
losses incurred by tobacco usage all around. The tax collected is very small compared to the
expenditure incurred by the state to treat tobacco-related diseases. Even when people realize
the adverse effects of tobacco, the addiction is so strong that it is nearly impossible to give it
up. They, who have been lured into this folly by slick advertising from tobacco companies
fully aware of the nature of the addiction, are victims of duplicity by the death peddlers.
However much money these companies may fill our coffers with, some truths just cannot be
denied. They are a net loss to the exchequer if all the losses are factored in. But the most
powerful argument against these American and British companies is that they kill an awful
lot more Pakistanis than the Taliban and Al Qaeda will ever destroy in our countries and
elsewhere, including the home bases of these companies.
The company prides itself in being the first multi-national company to begin its operations in
Pakistan. Our parent company, British American Tobacco has been in business for over 100
years now with a presence in over 180 countries. The Group has built an international
reputation for making and marketing high quality brands for the millions of informed adults
who choose to consume tobacco.
From being just a single factory operation to a company which is involved in every aspect of
cigarette production, from crop to consumer, we have evolved into one of the leading
corporations in Pakistan. PTC run two state of the art factories and employ more than 1,700
people while indirectly providing livelihoods to more than a million people who are involved
in various aspects of the business. PTC is market leaders and contributes more than Rs. 30
billion in excise duties and taxes to the Government. Their strategy reflects their vision, being
the champions of growth, productivity, responsibility and a winning organization.
Their brands encompass their values and boast a diversified portfolio catering to the different
tastes and preferences of the entire tobacco market. By offering products that are superior in
quality, driven by global standards, they meet and exceed the expectations of their
consumers.
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1.2 Company background
“Pakistan Tobacco Company Limited was incorporated in 1947 immediately after
partition, when it took over the business of the Imperial Tobacco Company of India which
had been operational in the subcontinent since 1905”.
From being just a single factory operation to a company which is now involved in every
aspect of cigarette production, from crop to consumer, PTC have evolved and grown with
Pakistan. However, what is significant about these 62 years is the effort that Pakistan
Tobacco Company has demonstrated in the development of the country. By being
instrumental in the campaign for modern agricultural and industrial practices, PTC have
helped in the development and progress of the agricultural and industrial sector in the
country.
PTC have been supporting and contributing to various causes of national interest. Educating
growers in the latest techniques and technology in agriculture, a forestation and free health
care in designated areas are but a few examples.
Throughout these 62 years, they continuous investment in people, brands, technology,
innovation and the communities in which they operate has borne fruit in many ways. They
are deemed as a partner of choice by many, our Environmental, Health and Safety standards
are a source of inspiration for local companies, their industrial relations practices have led
and influenced local practices, and as a result of all these, our managers are highly valued and
sought after people in the Pakistani corporate world based on the training and exposure PTC
give them from very early on in their careers.
Suffice it to say that the history of the Pakistan Tobacco Company is closely linked with the
development and history of the areas in which they operate. Be it corporate practices, social
investments, advancements in agricultural techniques, or establishing new ways of marketing
and distribution, PTC have always been instrumental in establishing the benchmarks against
which others are measured.
PTC, as a company, work towards broader goals beyond the benefit of the shareholders and
demonstrate support for communities, high standards of ethical behavior and greater
transparency and accountability. They are committed to continuous improvement and to
keeping an open mind. They have learnt that companies can rarely act alone; almost all our
contributions to society involve working constructively with others and by engaging and
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listening to their stakeholders. By matching their words with their actions, they aim
to demonstrate the behavior of a responsive and responsible tobacco company.
1.2.1 Organization StructurePakistan Tobacco Company (PTC) is a member of British American Tobacco (BAT)
group.BAT holds 64% shares in PTC and was the first (MNC) Multinational Company to
introduce tobacco business in Pakistan.
At the top of the organization hierarchy is the Chairman of PTC. Below the Chairman is a
Managing Director. Below the MD are 6 Directors of the respective departments.
First of all the most important aspect in a Company is its organizational setup. There are 4
regions in Pakistan for Pakistan Tobacco Company.
1.2.2 Distribution Network
Regions 4
Areas 18
Warehouses 20
Distribution centers 381
Regions
These regions are further subdivided into areas according to the geographical location. Every
area office gets its instructions from the regions and then makes out the plans for their
respective territory. They work in close liaison with the regions so that they can keep
company planners informed about the company's potential market expectations.
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The Central Region
The Southern RegionThe North
RegionSind and Balochistan
1.2.3 Company Vision“FIRST CHOICE OF EVERYONE”
To become the preferred choice for everyone and achieve recognized market leadership
through sustainable world class performance in all aspects of the business.
1.2.4 Company MissionTransform PTC to perform with speed, flexibility and enterprising spirit of innovation,
consumer focused company.
1.2.5 Company Values To think and operate as one company.
To satisfy customers better than competitors.
To encourage decision making as close to end market as possible.
To be committed to achieve the desired result.
To trust each other.
To value breakthrough thinking and calculated risk.
To care deeply about developing own people.
Be demanding but fair employee.
To be a cooperative citizen.
Enjoy ourselves.
1.2.6 Company GoalsPTC's goals are not only to continue creating long-term, sustainable shareholder value, but
also to lead the tobacco industry in demonstrating corporate social responsibility and wider
accountability. PTC aims to grow considerably by successfully pursuing its strategy of
organic growth and investment in new markets and acquisition.
1.2.7 Company Principles“Pakistan Tobacco Company is a commercial enterprise and our primary role is to build
long term shareholder value by meeting consumers’ preferences for high-quality tobacco
products. However, we believe that by absorbing and balancing a wider range of
expectations, we are best placed to continue building a sustainable tobacco business”.
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Like other multinational enterprises benefiting from economic globalization, British
American Tobacco also faces increasing demands to be more transparent and to demonstrate
high standards of corporate conduct that might in the past have been taken on trust. In today’s
rapidly changing world, large and successful businesses can be perceived as powerful and
self-interested and can face barriers to trust. As a tobacco business, the Group can face more
than others. In addressing these, a further challenge is that major enterprises like British
American Tobacco often encounter varying and at times conflicting stakeholder expectations
in different countries and cultures.
To help meet these challenges and following on a commitment made in the first British
American Tobacco p.l.c. Social Report 2001/02, the Group has developed these Business
Principles in consultation with managers from their businesses, as well as with external
stakeholders. The Business Principles and Core Beliefs cover the key issues that underpin
Corporate Social Responsibility (CSR) for a multinational business and, particularly, given
the unique characteristics of a tobacco business.
There are three Business Principles: Mutual Benefit, Responsible Product Stewardship and
Good Corporate Conduct, each of which is supported by a number of Core Beliefs, which
explain what they think the principle means in more detail. Together, these form the basis on
which they run our business in terms of responsibility.
Both the Business Principles and Core Beliefs and the way they have been developed are
consistent with our four Guiding Principles, which collectively express the culture of the
Group and Pakistan Tobacco Company as part of it.
The four Guiding Principles are:
Strength from Diversity
Open Minded
Freedom through Responsibility; and
Enterprising Spirit
1.2.7.1 Mutual Benefit
The principle of Mutual Benefit is the basis on which they build their relationships with
stakeholders. They are primarily in business to build long term shareholder value and they
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believe the best way to do this is to seek to understand and take account of the needs
of all our stakeholders.
Core Beliefs
PTC believes in creating long term shareholder value.
PTC believes in engaging constructively with our stakeholders.
PTC believes in creating inspiring working environments for our people.
PTC believes in adding value to the communities in which we operate.
PTC believes that suppliers and other business partners should have the opportunity to
benefit from their relationship with us.
1.2.7.2 Responsible Product Stewardship
The principle of Responsible Product Stewardship is the basis on which PTC meet consumer
demand for a legal product that is a cause of serious diseases. Therefore, their products and
brands should be developed, manufactured and marketed in a responsible manner. PTC also
aspire to develop tobacco products with critical mass appeal that will, over time, be
recognized by scientific and regulatory authorities as posing substantially reduced risks to
health.
Core Beliefs
PTC believes in the provision of accurate, clear health messages about the risks of
tobacco consumption.
PTC believes the health impact of tobacco consumption should be reduced whilst
respecting the right of informed adults to choose the products they prefer.
PTC believes that relevant and meaningful information about our products should
continue to be available.
PTC believes that underage people should not consume tobacco products.
PTC believes that our brands and products should be marketed responsibly and
directed at adult consumers.
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PTC believes in the appropriate taxation of tobacco products and the
elimination of illicit trade.
PTC believes in regulation that balances the interests of all sections of society,
including tobacco consumers and the tobacco industry.
PTC believes that public smoking should be approached in a way that balances the
interests of smokers and non-smokers.
1.2.7.3 Good Corporate Conduct
The principle of Good Corporate Conduct is the basis on which their business is managed.
Business success brings with it an obligation for high standards of behavior and integrity in
everything they do and wherever they operate. These standards should not be compromised
for the sake of results.
Core Beliefs
PTC believes our businesses should uphold high standards of behavior and integrity.
PTC believes that high standards of corporate social responsibility should be
promoted within the tobacco industry.
PTC believes that universally recognized fundamental human rights should be
respected.
PTC believes the tobacco industry should have a voice in the formation of
government policies affecting it.
PTC believes in achieving world class standards of environmental performance.
1.2.8 Corporate Social Responsibility
“At Pakistan Tobacco Company we aim to demonstrate responsible corporate conduct
across all aspects of our operations”.
PTC is abide by this philosophy each step of the way: from appropriate marketing and
consumer information to supporting sensible tobacco regulation; from respecting workplace
human rights and reducing our environmental impact to contributing to local communities.
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They seek to work continuously to engage with our stakeholders, to balance their
views and to align our business decision-making with the reasonable societal expectations of
a modern tobacco company.
PTC recognizes that Corporate Social Responsibility (CSR) presents particular challenges for
a tobacco company. Tobacco products pose real risks to health and raise important questions
about how best to define responsible product stewardship. They, therefore, believe that for
their business, the only meaningful approach to CSR is one based squarely on our products,
on the issues around them and on ways of responding to the sometimes strongly held views of
their stakeholders.
PTC hope that more corporations include CSR in their strategic planning processes and
understand that their businesses provoke a social cost which has to be balanced by keeping in
mind the interests of all the stakeholders and communities involved.
1.2.9 Business Process Re-engineering
Appreciating the importance to change the status quo for continuous improvement and
deliver strong business results in a sustainable way, PTC has always been on the lookout for
opportunities to enhance the speed, efficiency and reliability of PTC’s Process. Several BPR
projects were undertaken during 2006 and 2007 including the setting up of the Enterprise
Programme Office (EPO), project slender at Akora Khattak Factory and the supply chain
Operations References (SCOR) Model implementation. EPO puts in Place a new way
working, which keeps corporate strategy at the forefront and ensure that all the initiatives are
aligned to support the strategy though effective programme management and allocates
resources to the best fit priority areas. Project slender entails relocation of the machinery and
resources, changing the layout of production floor in a way to boost process efficiencies and
achieve higher productivity without employing additional resources. SCOR model is being
implemented all across the supply chain i.e. from seed to smoke, for achieving cost
optimization and improved process efficiencies.
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1.2.10 Environment, Health & Safety (EH&S)Being fully alive to its role as a responsible corporate citizen PTC has implemented a well
structured EH&S programme in addition to embedding internationally recognized best
practices. PTC is committed to ensure that it nurture an environment where its employees and
surrounding communities are safe from any hazards that may affect their health and minimize
the impact of its operation on biodiversity. PTC’s commitment to EH&S was further
strengthened during 2006 as PTC achieved significant improvements on the EH&S road map.
Both its production facilities were rectified with ISO 14001 earning the “Evergreen” status.
PTC has consistently sustained its accreditation in last seven surveillance audits with zero
major and minor points. PTC’s efforts has further been sustained with National Forum for
Environment & Health awarding PTC the Annual Environment Excellence award on “Health,
Safety and Environment” for second consecutive year in 2006. Through out the company’s
history, it has maintained a strong stance on corporate and social responsibility, it strongly
believes in building effective and constructive partnership with communities by helping
address various EH&S issues. Over the years the company has invested substantial resources
in terms of finances and manpower in various initiatives like Mobile Free Dispensaries,
Learning Resource Centre and Portable Water.
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2 Company Analysis
2.1 Business Performance
2.1.1 Sales PerformanceThe company delivered a record sales volume of 41.5 billion cigarette sticks, registering a 12
% growth in terms of volume and 20% in terms of value over the previous year.
Financial highlights
Total Market In billion (Rs)
Increase2007 2008
Gross turnover 40889 49054 20%
Gross profit 6516 7277 12%
Operating
profit
3984 4415 11%
Profit before
tax
3725 3894 5%
Profit after tax 2420 2532 5%
EPS (Rs) 9.47 9.91 5%
PTC has shown remarkable resilience in 2008. While it witnessed very testing times, it has
emerged even stronger. In depth understanding of consumer needs, focus on product quality
and innovative marketing campaigns have always been their forte and they provide them a
strong organic growth even in difficult times.
2.1.2 Contribution to the National Exchequer The benefits of increased growth and profitability of our operations also accrued to the
Government in terms of higher tax payment. The company paid a total of Rs. 32 billion in
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2008 comprising of federal excise duty, sales tax custom duties and income tax an
increased of 20% over last year.
2.1.3 Operating and other costThe company made considerable strides in its endeavors to establish and promote a cost
conscious culture in all facets of the business. With only 8% increase in the marketing
expenses, which is much lower then inflation, company managed to grow sales by 12% in an
increasingly competitive.
2.1.4 Cash flowsVolume growth during the year resulted in significant increase in operating cash flows. This
was partially off set by higher dividend payments and higher investment in pant and
equipment. However, the year witnessed a net increase in cash amounting to Rs. 369 million
for the company.
2.2 Financial Analysis
2.2.1 Ratio Analysis
2.2.1.1 Liquidity ratios
Current Ratio (current Assets / current liabilities)
2005 2006 2007 2008
1.1 1.1 .96 .91
There is slight decrease in the current ratio but this ratio is acceptable for the creditors
because the standard ratio for any efficient firm is 1. Ratio figure has decreased because both
current assets and the current liabilities have increased accordingly which has balanced out
the ratio to the same level. Firm is still able to pay its short term payables.
Quick Ratio (current Assets - inventory / current liabilities)
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2005 2006 2007 2008
----- .10 .13 .15
Quick ratio in 2008 has increased due to decrease in inventory which shows that the
inventory in 2008 was not the major part of the assets. Whereas in 2007 inventory was high
in ratio. The increase in firm quick ratio is a good sign for the firm. Firm is now much able to
pay the short term liabilities through its most liquid assets.
Cash Ratio (cash / current liabilities)
2005 2006 2007 2008
----- 0.016 0.034 0.054
In 2008 the cash and bank balances of company is increased from 0.034 to 0.054 that shows
that company has increased its liabilities through short term loans and financing ,where as the
inventory in 2008 has been increased for the purpose of sales. Creditors are very much
interested in cash ratio. The figure has increased but not so much, It has increased because
cash and bank balance has increased but at the same time the current liabilities has also
increased accordingly. Current liabilities have increased because trade and other payables has
increased which means they purchased inventory on credit.
2.2.1.2 Long term Solvency Measures
Total Debt Ratio (Total Assets -Total equity / Total Assets)
2005 2006 2007 2008---- 0.67 0.72 0.79
The ratio has increased in 2008 from 0.72 to 0.79This increase is due to increase in both the short term and long term liabilities.
Debt-Equity Ratio (Total Debt / Total Equity)
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2005 2006 2007 20080.5 0.3 0.28 0.16
The ratio has decreased due to the increase in debt and decreased in equity. The debt has also increased as the firm has financed its operation from the banks loan and less dependent on shareholders. It shows that most of the firm’s financing is provided by debt not by shareholders.
Interest Coverage Ratio (EBIT / Interest)
2005 2006 2007 2008----- 57.03 75.02 74.02
This ratio determines the firm’s ability to pay its interest obligations. The interest coverage
ratio in 2008 has decreased to 75.082to 74.02 times. As the ratio has decreased it’s a
unfavorable sign for the firm. Previously firm was in better position to pay its interest
liabilities .As the firm is meeting the standard of 3, the credibility of the firm is high and
investor would invest in the company. This ratio determines the firm’s ability to pay its
interest obligations.
2.2.1.3 Assets Management / turnover Measures
Inventory Turnover (Cost of good sold / Inventory)
2005 2006 2007 20086.1 6.7 2.38 2.85
The ratio in 2008 has increased a little from 2.38 times to 2.85 times. The increase in ratio is
due to a decrease in inventory which has lowered the cost of goods sold. As this there is a
slight increase in value, the firm has a good effect towards the liquidity.
Days sales in inventory (365 / ITR)
2005 2006 2007 2008
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59.83 54.47 153.36 128.07
The inventory turnover in days has decreased from 153.36 to 128.07 in 2008 which is a good
sign for the firm. The decrease is of almost 7 days. This decrease is suitable for the firm as it
can spoil the inventory by keeping it in hand.
ITR = Inventory Turnover Ratio
Total Assets Turnover (Sales / Total Assets)
2005 2006 2007 20083.8 4.2 4.2 4.72
This ratio has increased because of high level of increase in sales in relation to assets. There
is a decrease in denominator due to which ratio is higher. This shows that company is
efficient in using its assets to generate sales.
2.2.1.4 Profitability Measures
Net profit Margin (Net income / Sales)*100
2005 2006 2007 2008--------- 9.50 10.50 9.26
This ratio has decreased which shows that company is in unfavorable position.
Return on Assets (Net income / Total assets)
2005 2006 2007 2008--------- 0.218 0.245 0.272
There is an increase in ratio in 2008 that shows that the firm has managed its resources
efficiently and effectively. Firm has increased its assets in 2008. .
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Return on Equity (Net income / Total Equity)
2005 2006 2007 200830.3 38.2 48.37 48.84
There is increase in ratio of return on equity this increase in ratio in 2008 shows that the
common stockholders are now earning 48.84% on common stock equity, which was
previously 38.2%. This increase in value is due to increase in net income as well as sales.
The value of earning per share has also increased in 2008.
2.2.1.5 Market Ratios
Earning Per share (Net income / *Shares outstanding)
2005 2006 2007 20085.17 7.46 9.47 9.91
The earning on share is increased in 2008 from 9.47 to 9.91 because the net income is
increased. This increased in earning on share has also in creased the return on common
equity. The firm is earning Rs.9.91 on behalf of each share. This decrease in earning per
share would positively affect the trust of the investors towards the firm and would build the
repute of the company.
Price - Earning Ratio (Price per share / Earning per share)
2005 2006 2007 200813.33 9.66 16.42 10.73
Price earning ratio has decreased which means investors are now wiling to pay Rs 10.73 on
each Rupee of earning, which shows that investors trust have decreased and they are less
willing to pay because of economic recession.
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2.3 Human resource AnalysisEvery organization is comprised of people. Acquiring their services, developing their skills,
motivating them to high levels of performance, and ensuring that they continue to maintain
their commitment to the organization are essential to achieving organizational goals and
objectives. Human Resources Department is the part of the organization that is concerned
with the people dimension. It is a staff or support function in the organization. Its role is to
provide assistance in HR matters to line employees or those directly involved in producing
organization goods and services. The main functions of HRD are to resolve the workers
grievances and care of disciplinary procedures, misconduct, faults and omissions. The HR
department provides an opportunity for the employee and performance manager to discuss
development goals and jointly create a plan for achieving those goals. Development plans
should contribute to organizational goals and the professional growth of the employee.
Core Function of HRD
Industrial Relationship
Recruitment
Selection
Training & development
Placing
Promotion
Transfer
Salary statement
Agreement with Collective Bargaining Agents
Occupational health program
Legal affairs
2.3.1 Classification of workers
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The workers employed in PTC are classified into two categories:
Permanent or non- seasonal workers.
Temporary or seasonal workers.
2.3.1.1 Permanent Workers
Permanent workers are hired by HRD. The factory employs them directly on permanent
basis. Therefore, they are required to meet all the requirements that the company has
established for a worker. New workers when hired are properly trained and closely watched
at work during the early period of their job.
2.3.1.2 Temporary Workers
The temporary workers are hired by HRD as seasonal workers. They are on the job for six
months in a year i.e. from July to December now this period has declined to only 3 months. .
At depots they are hired for buying tobacco and doing other jobs in the Leaf areas. At factory
they are hired normally for GLT services.
If a temporary worker works for the whole season, he gets the benefit of special bonus. If he
remains absent for 10 consecutive days, another worker for the rest of the season replaces
him. If a seasonal worker remains absent for three consecutive seasons, his license is
cancelled. The wage level and terms and conditions for the temporary workers are nearly the
same as that of permanent workers.
2.3.2 Areas Covered by HR department
2.3.2.1 Recruitment
Recruitment is mainly concerned with securing the potential candidates. It is the process of
contacting the public and encouraging suitable candidates to come forward for final selection.
Organizations succeed largely through the efforts of the individuals working with in them. It
follows that hiring the right individuals is of fundamental importance and a cornerstone of
good management. The consequences of good selection are often clear, whereas those of
poor selection are not always obvious. The cost of advertising, the management time
involved in selection and training, and the expense of dismissal are easy to calculate, but the
longer-term effects such as lowering of morale, reduced business opportunities and reduced
quality of product or service are possibly more serious.
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In PTC for recruitment, first of all there is a requisition from a department for a post
which if approved by the HRD and then advertised by the head office. Thereafter there is a
short-listing from a pool of candidates. The remaining candidates undergo tests and
interviews, after which there is a call, a medical test and at the end the best candidate is
selected.
FROM WITH IN THE INDUSTRY
Employee Referrals
Advertising
Employment Agencies
2.3.2.2 Selection
Preliminary Selection
Filling Up The Application Form
Wide Range Interview
Employment Proffer
2.3.2.3 Training and development
An employee is trained in accordance with the needs of the concerned department. The HRD
specifies needs of training and arranges courses, which can be carried out in the country or
abroad also. The annual report of the employee includes the courses he/she has received. The
courses include office management, communications, etc. Other thing is the employee
development. The difference between the employee training and development is that, that
training is present oriented activity while development is future oriented. Employee
development helps the employees and enables them to cope the future challenges and
perform the activities in the coming future.
2.3.2.4 Promotion
The employees having a good performance are promoted to next higher post there are two
factors for promotions service/seniority, which is the time that employee has spent the
organization. Performance, which is based on workability, efficiency of an employee, certain
jobs require special training while some not. In case of workers annual assessments from is
field in service record at the beginning of every year. Line managers do their assessments,
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their immediate bosses. That is from January to December having remarks of unit
manager, sign of in charge of department, marks according to percentage point system. In
production upgrading is easy, group operator to machine controller.
2.3.3 Mutual Industrial issues Steadfast singing of documents without writing them.
Illegal strike
Stoppage of work.
Wages, rent, allowance.
Meal regulation.
Special attendance allowance.
Hajj allowance.
Leaves.
Financial assistance.
Basic pay increase.
2.3.4 RetirementThere is a limit in individual life for doing a job. No individual can work throughout his life
therefore every one. In PTC the age of compulsory retirement is 58 years for workers and
managers, first extension is given at the age of fifty-five years, second at 56, third at 57,
subjected to his performance and medical fitness. The retirement can also be on medical
board examination/ recommendation basis.
2.4 Marketing Analysis Marketing at PTC is divided into three further categories: marketing research, brand
marketing and trade marketing the marketing research department carries out its surveys and
other such activities to find out the demand for each brand, and to discover the potential
cigarette market. The brand-marketing department comprise of brand managers who have the
responsibility for success and health of their individual brands. Each brand manager designs
and executes promotions to increase the sale of his brand. Advertising through different
media’s and sponsorships of event is also the job of brand marketing. The trade marketing
staff works direct in the field and interacts with the distributors, wholesalers, retailers, and the
Page | 23
customers. PTC has been consistently meeting consumer expectations for the past
ten years with the popular international brand names like Benson and Hedges, John Players
Gold Leaf, Wills, Capstan, and Embassy which is the largest selling brand in the market.
PTC, through 343 distributors, services a very large retail and wholesale network across the
country. PTC has always been looked upon as one of the most dynamic organizations with
its exuberance to quickly adapt to the changing needs of the market. PTC has also been a
harbinger in establishing scientific methods of marketing research to focus on the changing
consumer requirements. As part of this tradition, the company recently conducted a detailed
urban and rural retailer census, a gigantic task never undertaken by any business outfit in
Pakistan. The census facilitated in determining the volume of business, region wise
requirements/demands and also helped in streamlining PTC’s current distribution network
thereby reducing costs. Total of about 270,000 retailers and over 7000 wholesalers were
surveyed. PTC is also a pioneer in introducing filter cigarettes in Pakistan as early as 1955.
More recently, keeping in view the shift towards light, gold leaf lights has been introduced in
the market representing the house of gold leaf as a truly international offer keeping with the
times and remaining in tune with the changing needs, and tastes of PTC’s consumers. In
keeping up with its tradition of being in the cutting edge of marketing innovation, PTC co-
sponsored the launch of the epic movie Titanic in Pakistan, thereby setting a singular
precedent of providing quality entertainment to the nation. And this was within three months
after the “Explore the World” promotion campaign for Gold Leaf was ran, to which PTC
received in excess of 1500, 000 consumer entries. PTC is constantly endeavoring to
introduce novel and innovative measures to further the marketing graph and offset the
extraneous adverse affects. PTC is one of a very few companies in Pakistan which is paying a
great deal of attention to the retail marketing. It started a retail excellence program, which is
a set of structured presentations covering subjects such as business ethics, trends, customer
focus and how to satisfy customer needs profitably. It enables PTC to develop and roll out
best-practiced retailer methods, which will enhance retailer profitability and their relationship
with the company in order to regain market leadership in the future. The focus is how to
provide a “world-class” service to consumers, sharing company information and plans, and
gaining feedback. PTC holds numerous trade meetings with its distributors and retailers,
which no doubt helps to strengthen the relationship and be responsive to their requirements
better than any other FMCG company in the market place. These meetings are held at high
quality venues and a gift from PTC is given to each retailer as a token of appreciation for
their attendance. This is a unique concept in the market as PTC is the only comp- any in
Page | 24
Pakistan to embark on such a program for retailers working in line with the
company’s vision to be “first choice for everyone”. The intention is to transform PTC’s field
staff role into business advisor rather than a mere salesman. In short, the program focuses on
business building as a whole rather than a propaganda forum for selling cigarettes. PTC
stresses the importance of expanding customer base through good service and the removal of
counterfeit cigarettes from the market. Overall, the key goal is not to deceive a trusted
consumer for short-term goals.
2.4.1 SWOT Analysis
Strengths
Continuous learning and improvement.
Sustainable growth.
Environmental standards achievement.
Market leadership in the world.
Being beneficial to the community (Corporate Social Responsibility)
Diversified workforce and environment.
Technologically advanced machinery and equipments.
Good salaries packages.
Focus on health and safety on the company premises.
Training and development of its employees.
Weakness
Salaries difference between workers who work more and the one who put minimum
efforts.
Technological advancement would decrease the workforce and unemployment will
increase.
Very minimum marketing as compare to its competitors.
Workers are always under threat because of downsizing.
Improper distribution of work
Opportunities
Greater opportunity of promoting lower brands in rural region.
PTC has the potential to further improve the cost reduction method.
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Create a better work environment in GLT department because of more
hazards in this department.
Lowering the downsizing will create a good image in the eye of regulatory authorities
and government.
Focus on its key brands i.e. high growth like Gold Flack this year’s growth was
around 27%.
Export of premium brands
Threats
Some of its competitors are also producing high quality brands like Marlboro by
Lackson.
Internationally some countries are continuously promoting anti-smoking slogans like
the ban of smoking in Bhutan in 2002.
Better marketing campaigns by rivals.
Their well-established brands are highly copied by some local manufacturer.
The political, economic situation is not stable in Pakistan.
Limitation of their product,
Decline in tobacco growth
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3 Environmental Analysis
3.1 Industry and Market Analysis
3.1.1 Product line of PTC The PTC have a stretched product line covered every segment but comparative to its competitor its
lower segment is very short. PTC generates most of its revenue from middle slap. The following are
the product line segmented into upper slap, middle slap, and lower slap.
Upper slap
Dunhill 20HL / 10 HL
Dunhill Lights
Benson & Hedges 20HL / 10 HL
Benson & Hedges light
Gold leaf 20HL / 10 HL
Gold leaf flavor
Middle Slap
Capstan by Pall Mall 20HL / 10 HL
Gold flake 20HL
Wills kings 20HL
Lower Slap
Embassy kings 20HL
The cigarettes are packed in two different style boxes. They are called Soft cup (SS), Henge
led (HL). The interesting thing is that the different plants are installed for the both style
packing. Soft cup is imported while Henge led is made in the factory.
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3.1.2 Growth rate of entire industryAccording to PTC Market Research Department the total market is expanding at approximately 1% per annum. The overall market volume is expected to increase in line with current trends during the next 12 months.
Statistical information in volume
Regions Total market in Billion (₤)
%age Change
2007 2008USA 20.1 20.2 +1
Asia Pacific 74.4 76.5 +3
Latin America 74 71.4 -4
Europe 114.6 116.5 +2
Africa and middle east
46.6 49.1 +5
Total 333.7 329.7 +1
3.2 Competitor analysis
3.2.1 Major Competitors
Lackson Tobacco Company (LTC) LTC is PTC’s largest competitor and the second legal cigarette manufacturer in the Pakistan
besides PTC. Marlboro and Red & White are a few of its brands. LTC used to be affiliated
with Phillip Morris, the giant in the global cigarette market; however, this association was
dissolved few years ago. Its market share is actually greater than PTC, around 46.2%. The
main goal of LTC is money making and it believes in short-term gains rather than long-term
benefits. Surprisingly, LTC uses quite unethical marketing strategies – for example – a
number of “under-the-table” deals are made with the retailers to convince them to take off
PTC’s merchandize from their store, and to accept LTC’s merchandize. This obviously
results in a huge loss to PTC as it costs around Rs. 100 000 to fully merchandize a small
shop.
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Mardanwallas
These brands are manufactured in Mardan and thus are called the “Mardanwallas.” These are
normally low category cigarettes (under Rs. 10) for example Gold Street. The goal of
Mardanwallas is solely money making, and are not concerned about acquiring a strong
position in the market. These are also 100% tax evaded. The government has made
legislation regarding this issue; however, nothing has been done so far. Secondly, their
factories are located in the northern areas so tax evasion becomes very easy. No proper
marketing structure or strategies exist for these brands. Their ATL activities, which include
electronic and print media, are extremely low. These brands usually survive on BTL
activities, which mainly consist of posters.
Counter fit / other Tax Evaded Brands
Counterfeit brands emerge as a threat for PTC, and later become competition as well. In
Pakistan, the concept of copyright laws and its implications is almost non-existent. As a
result, these brands are manufactured without any fear. As a result, PTC has suffered a huge
loss in the recent years as its premium brand Gold Leaf, has been copied in three different
qualities with three different prices for each. These brands are normally sold in thickly
populated villages to uneducated and low-income people, and at interchanges and
motorways. There are also other tax evaded – that is – smuggled brands in the market. These
are called ITBs (International Transit Brands). These are usually smuggled from Peshawar
through Afghanistan or Dubai.
3.2.2 Market Shares:
Market Share of PTC and its Competitors
Pakistan Tobacco 45.70%
Lackson Tobacco 44.20%
Mardanwalls 2.20%
Counterfeit/other 1.8%
Tax evaded brands 5.90%
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3.2.3 Goals To regain volume and value leadership by positioning viable brands in all consumer
related segments of the market. The focus is on the light segment, ASU 30(adult
smokers under 30 years), and premier brands.
To drive world class standards in products process and services through passionate
skilled and confident people
To meet stake holders expectations
To be seen as a responsible company in a controversial industry.
To meet these objectives, PTC is taking the following initiatives:
Establish a focused segment and differentiated brand portfolio
Create a winning cooperate culture which focus on vision, mission and values.
Restructure PTC cost bases to become competitive locally and globally
3.2.4 Competitive Strategies
3.2.4.1 Corporate strategy
Good corporate strategy
Responsible product stewardship
Mutual benefit
3.2.4.2 Operating Strategy
The operations strategy of PTC is “Our strategy reflects our vision of being the champions of
growth, productivity, responsibility and a winning organization”.
3.2.4.3 Core Competencies
Following are the core competencies:
Quality
Cost
Delivery speed
Flexibility (in terms of volume)
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6.2.4.4 Flow strategy
Fixed flow strategy is used in the marketing process, as the market is done for “Make to
stock”. The strategy is fixed because only one product i.e. cigarette is produced. The brands
of cigarette are different depending upon the type of tobacco used.
Trade Marketing and Distribution Structure
TM&D Structure.North region.
Mr. Imran anjum Regional Manger
Rawalpindi AMRaja Saeed
Pesh awar AMAli Changazi
Jhelum AMShaheryar Khurram
Islamabad AMAmin Piracha
Sargodha AMImran Fazal
RO SupportStaff
Ali LodhiIslamabad TMO
Kamran ShahzadWah TMO
Yasir AbbasRawalpindi TMO
Zahid AkhterKotliTMO
Sajjad SabirChakwal TMO
Usman SaifGuj ar Khan TMO
Muhammad MunsifAbbotabad TMO
Afzal HussainMuzaffarabad TMO
Arshad HayatPeshawar TMO
Amanullah JanKohat TMO
Khurram DilshadD.I Khan TMO
Shah HussainMingora TMO
Gulfraz KhanJhelum TMO
Tauseef HassanMirPur TMO
Raj a BishratMandi TMO
Rizwan Ul HaqGuj rat TMO
Sajjad ShahSargodha TMO
Raj a KhalidBhalwal Section
Ashfaq AhmedKhushab Section
Sheraz AbbasirMianwali Section
Ali RazaAdmin Officer
SPC
MCShahid Akhter
CF AccountantMalik Zubair
Data AnalystAmeer Hamza
Hassan NajanChannel Manager
Tariq AzizKey A/C TMO
Nadia WillamKEY A/C TMO
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Distribution in Islamabad
Islamabad Market
Population: 950,000 - 90% Salaried Class
Cigarette Industry: 74.1 Mn SticksMarket.
Market Growth: 3.5% SPLY
BAT Volumes & Share: 34.5 Mn Sticks - 47.5%
LTC Volumes & Share: 29.9 Mn Sticks - 40.0%
Others Volumes & Share: 9.0 Mn Sticks - 12.5%
Distribution Chart
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M. AsifProprietor
KPO Dist Manager Office Manager
2 FSO’s
11 DD Salesmen
5 VDD Salesmen
Distributor Operations It primly covers the following area:
1. effective Sale and distributions of Brand portfolio as per company into VDD, DSD
and wholesale segment’
2. Training and development of sales force.
3. Identification of potential areas in consultant with area team.
4. Maintain the documents as per company guideline.
Distributor’s channel
Sales
I. Primary sales:
The total stocks dispatched from warehouse or directly from the factory to particular area are
known as primary sales of that area.
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Distributor
DSDDirect Sale Delivery
VDSDVillage DSD
Shop sale
Village wholesale
Main town Whole sale
II. Secondary sales:
The total stock sold by the distributor of that area to retail and whole sale market is known as
secondary sales of that area.
III. Consumer off-take:
The consumer off-take is the sales being done by retailer to the end consumer.
Operations1. Effective sale and distribution:
To achieve effective sale and distribution TMO works in conjunction with distributor in
identifying new beats and potential areas. In this regard, this dept. evaluates whether the
current sale force is sufficient enough to provide the potential exist in the mkt. Based on
their assessment, if required,
The company can ask their distributor to increase the sale staff. Since the distribution
evaluation is a regular feature, inputs are taken considering distributor’s ROI to provide
sale subsidy in the form of sales staff salary. Besides, distributor at irregular intervals
himself visits his mkt. to access brand availability, competitors sales, and potential new
customer based mkt. trends. Salesmen are provided sales target for the month that it
further reviewed by FSO.
2. Training and Development of Sales Force record :
To gain maximum dispersion into the market the , the right sale force is the key.
Whenever a salesman is hired he is put through one week On-The-Job training program
with experienced salesman of the mkt. Distributor should discuss the nature of job ,
salary, commission, attendance allowed and targets of the company.
3. Identification of the potential areas:
Tobacco market in Pakistan is highly scattered with numbers of outlets increasing every
year. According to the last RCS in 1997-98 number of outlets in retail universe was
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247000 that has increase to more than 300000 by now. To identify these potential
areas, distributor works with TMO’s of the market.
4. Maintenance of all documents as per Company guidelines:
PTC has devised and developed various documents for sufficient level of control over
secondary supply chain. Distributor staff up date these accounts on routine basis as per
prescribed by the company. These documents are listed below;
Document name Owner Update frequency
Lifting plan Distributor Monthly
OCF Distributor 10Days
SD20 Distributor’s Clerk Daily
SD9 TMO Monthly/Quarterly
Distributors DSR Distributor’s KPO Daily
Monthly Sales Report Distributor’s KPO Monthly
Stock Issue Register Distributor’s Clerk Daily
Cash Memo Salesmen Daily
Fixed Sale Summary Salesmen/FSO supervision Daily
DSD Contact Salesmen Daily
Claim Register Distributor’s clerk when required
General Term used in PTC:
a) Lifting Plan:
It is date wise stock shipment to be received by the distributor from company warehouse.
Based on marketing trends, Promotional plans and on hand stock, distributor provides lifting
to both distribution department and factory warehouse on monthly basis.
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b) OCF (Order control Form):
This document is generated after every 10 days each month as under:
1-10 days
2-20 days
3- End of month.
This document provides distributor’s 10 days requirement of each and every stock keeping
unit against the ECD define by the relevant TMO of the market.+
c) SD-20:
It provides the detail of daily stock keeping unit wise secondary sale in the following trades
segments;
DD: Direct delivery by the salesmen to urban area of the market.
Shop sale: Retailer or shopkeeper sometimes visits at his own to distributor
shop so such sales by the distributor are shop sale.
VDD: village direct delivery, secondary sales to village outlets by the salesmen
is termed as VDD.
Whole sale: secondary sales to wholesaler in market.
d) SD-9 :
This register is also termed as Distributor Statistics Register because the complete details of
distributor working and setups are in it. Firstly the total number of universe classification of
outlets are printed on it and from them how much he covering. secondly the total picture of his
urban and village profiles is printed with respect to its volume classes (1-9) and in last the total
sales for each own and competition brand are written and the total share of companies are
calculated .This is considered the back bone or myth of distribution.
e) DSR:
DSR is generated on daily basis by Salesmen and checked by the FSO and from this report the
SD20 is filled on the start of very next day. In this report the total and brand wise sales of each
day is punched and it must meet with the closing balance of each brand of last day. It consists:
ECD
Stock Received
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Closing stock
Sales
f) Monthly sales Report:
It provide Stock Keeping Unit secondary sales in DD, VDD, Whole sale and the shop sale per
month with break up on 10-days basis. Additionally it also provides information about the
stock received during the month, to-date for the year, sales same month last year and stock on
hand position.
g) Stock Issue Register:
It provides information as under:
SKU wise stock taken by salesmen for his beat.
Stock returned at the end of the day.
Rate of SKU.
Value of stock sold.
h) Cash Memo:
Whenever any outlet owner purchases stock from distributor salesmen, he hands over a slip
containing stock rates and value and name of shop with distributor’s name book called as
Cash Memo.
i) Fixed Sale summary:
It provides salesmen daily productivity or sale from shops. It covers following information:
Total number of outlets per beat.
Outlets covered.
Productive outlets.
All salesmen are sorted against their relevant FSO. Report also provide the FSO’s
performance directly.
j) DSD contact:
Salesmen who mention over all market scenario in his beat during the day file this report.
Salesmen describe the statement of non-handlers of PTC and their views.
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k) Claim register:
This register is maintained by distributor to keep track of promotional D&D claims.
Whenever these claims are approved by the AM/RM an amount of such claims are
transferred into the distributors account.
4 Task 1
4.1 Role profile of the FSO
4.1.1 IntroductionMy first task is to revise and Implement the role profile of FSO, working at distributor shop.
The previous role profile is vague and some working terms and conditions are not applicable
in these days. Most impotently our FSO did not follow that profile in their daily routine.
Being kept in mind this situation I started my work on this project and collected all necessary
information. In this project Mr. Ali Lodhi (TMO) and Mr. Qadir (FSO) helped me and tell me
about his (FSO) Do's and Don’ts, his duties, liabilities and rights, what he should follow and
what he should not. For the completion this task I had a time period of 10 days, In first five
days I gathered all the necessary information from FSO at the distributor shop. My target is to
develop a profile that helps the FSO in his daily routine which means to develop a check list
for FSO. Ali Lodhi checked that information and added some important points in it. After
getting all the points I edited them and made three copies, sent one copy to Area manager
Islamabad, second to regarding TMO and third to FSO at distributor shop.
4.1.1.1 Main Points in FSO RP
1. Check and maintain DSR.
2. Check the availability of Company stock in Market.
3. Provide help to salesmen through regular and accurate communication.
4. Management of salesmen.
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5. To check records and assist the salesmen in stock management and sales (in the event of
any promotional activity).
6. If there is any problem with the salesmen issue he should find remedy and also able to
address local issues.
7. Maintain good working relationship with the company staff, salesmen and distributor.
8. He should pay surprise visit to outlets, which creates moral check on salesmen.
9. If any salesman is absent he should maintain the records of absentees and make sure
Spare salesmen provide the stock to outlets under that salesman.
In our previous role profile the training program was not up to Date and applicable. Now
we have added a new training program which is known as ‘9 steps of Sales Call’.
Now his main task is checking the DSR daily so the problem of Missing DSR’s should solve.
4.1.2 Findingsfter visiting the distributor there are some Findings in my point of view which I have listed
below:A1. DSR’s are missing.
2. No accountability, one can not hold anyone responsible for wrong data entry.
3. Lack of resources needed to carry out day to day activities.
4. Lack of interest and concentration during record maintenance.
5. No record is maintained for absent Salesmen.
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6. The use of different Cash memo books for maintaining a single month’s
record.
7. Documentation is very poor and need further improvement.
8. FSO did no follow his role profile and RP should be revised.
9. Salesmen Beat and route plan should be revised.
10. RCS numbers are not updated.
4.1.3 Recommendations1. Mr. Asif should arrange a small training session for its supervisor. In this training
session the supervisor would be given the basic training to use Microsoft office suite.
This training should be on the job training because this would enable the keypunch
operator to learn quicker and I think a 3 day training would be enough.
2. Single cash memo book should be used during month and record should be
maintained on issuance of cash memo book. So if DSR are missing for any reason one
could check the Cash memo books.
3. To deal with the problem of not preparing the daily DSR’s, Mr. Asif should himself
address his salesmen about the importance of DSR’s. He should also tell them that it’s
not something extra for you people but it is something which is a part of your daily
work.
4. FSO of that distributor shop should maintain the record of absent Salesmen and if any
replacement is made then he should check the DSR of that day.
5. Salesmen and FSO’s should take interest in their work. It’s the duty of Mr. Asif to
provide them healthy and friendly environment so they complete their work
efficiently and on time.
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6. Mr. Asif should appoint an employee to maintain the DSR’s electronically so
that errors and frauds are minimized.
7. If the above recommendation is applied then the person who is employed should also
check the Record of cash memo books, so the problem of missing DSR’s and cash
memos should be solved.
8. FSO role profile should be revised because some term and conditions are vague and
up to date.
9. Salesmen beat and route plan is too old and some times SM miss important shops due
to there route. So it must be revised.
4.1.4 Conclusion In Islamabad area the distribution ship is excellent and the sales are above their target but the
documentation need further improvement, to cover this slur we appointed a new employee, whose
main work is to generate electronic DSR’s and maintain the record of Cash memo books issued to
salesmen.
Mr. Asif himself is very nice and polite in nature but he lacks good management skills. It’s his duty
to check whether the staff maintains the record or not. If any of the staff members is deceiving him
then he should take some immediate action against him.
4.1.5 Results
After the completion of Role profile of the FSO we implemented that profile and the results are
excellent. FSO is taking interest in his work and DSR’s are regularly checked. Now our distributor
Mr. Asif also taking interest about DSR and their maintenance. this role profile also creates a
healthy relation between distributor and FSO.
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Task 2:
4.2 Salesmen beat revision
4.2.1 IntroductionIt is the duty of Salesmen at Islamabad distributor Asif & company to visit their regarding
outlets and provide them stock on their purchase frequency dates. But some time they miss
their shop/outlet because of their route plan which causes a communication and demand gap
between the salesmen and Retailer, so to over come this problem I had done several meetings
with salesmen to hear their views about this problem. After every meeting I concluded that
there is only one solution and that is BEAT REVISION.
So, keeping their view in my mind I started my work on salesmen beat revision plan. With the
help of previous rout plans and information provided to me by salesmen I drew a new format
with a more consolidated rout plan.
4.2.1.1 ResultsBeat rout plan is now drawn according to their journey cycle. With the help of this plan they
will never miss their outlets and the numbers of complaints will be minimized.
4.2.2 DSR Problems In addition to all this work I had also changed the format of Daily Sales Report (DSR). As
mentioned above in the findings that some times DSR’s are missing due to some lame reason.
If we ask about the missing DSR’s from salesmen they tell us that we forget to make DSR and
drew a bill on Cash memo. But there is another Problem, they use new Cash memo book daily.
So finding a bill and DSR is very difficult.
4.2.3 SolutionTo over come this problem we introduced a new column in DSR that is Cash memo bill
number i.e. C.M.no. It helps to minimize this problem.
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Now it is the duty of every salesman to write cash memo number in front of the
outlet name which he visits. With this method the daily usage of new cash memo book is
stopped and the problem of missing DSR’s will be solved. They will have to show there
previous book for the issuance of a new book. This step led to prevent the errors and reduce the
overheads of the Distributor.
4.2.4 Beat updatingAnother task assigned to me was beat updating. After completing the beat revision it is
necessary to update them. For this purpose I had discussion with Salesmen and convinced them
to make a list of the Close and newly open outlets. For this task I had a time period of 5 days.
On the second day salesmen gave me the list and I appoint Mr. Naveed (working as data
operator) to up date the beat list. Close shops/outlets are eliminated from the list and new
shop/outlets are entered.
4.2.4.1 Results
After updating the beats there is less chance of errors and fictitious sales are minimized. Now
salesmen have less than 55 outlets in their beats & rout plan and they visit them daily. It will
also help to increase the sales and distribution in that area.
4.3 RCS updatingRCS stands for Retail Censes Survey. Every outlet in an Area has its specific RCS number
which show it’s Daily and weekly demand and Sales, merchandizing as well as its weekly
holiday and shop closing time.
Some new outlets in Islamabad area are not registered or you can say their RCS number is
not generated and assigned to them. Mr. Ali Lodhi who is the TMO at Asif & company
helped me to up date that information which is very helpful for Distributor and Company as
well.
In very few days we completed all our paper work and assigned a person to up date that
information. RCS is basically a format which shows the information about shop and its scale.
This information helps TMOs and other company officials to know the current status of that
outlet. I also attached the format with this report.
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4.3.1 ResultIf RCS survey is complete in a manner that each and every clause is vivid and clear then it
will help the company to generate authentic reports and market survey. After all, all
promotions are based on data provided by the trade. Therefore it is necessary to have the right
data. It helps to improve the efficiency of company.
4.4 Key accounts ManagementKey accounts include those shops/outlets on which the sales of our premium brand like
Dunhill and B&H is more then 30% of its daily avg. sales. There are total 250 outlets
declared as key account outlets in twin cities. In Islamabad area there are 130 outlets declared
as key account outlets. There is a separate manager appointed as channel manager to deal
these outlets. In North region Mr. Hassan Najam is Channel manager. There are two separate
TMOs for this field. Nadia William and Tariq Aziz appointed to manage these outlets.
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Appendix
Role Profile
Job Title: Field Supervisor officer (F.S.O).
Reports to: Trade marketing officer (TMO).
Function: Check Distribution/ Availability of stock.
Appointed by: Distributor.
Location: Islamabad.
Purpose Statement:
To have a complete moral Check on FSO to raise the bar of sales and increase the efficiency of
Distribution in Islamabad area and to achieve distribution targets in order to maximize brand availability
and visibility in outlets and required customer service level.
Principles/ Duties of FSO:
Ensure that Company stock is available in market.
Achieve Distribution coverage; visit outlets frequently in order to maximize the sales and
route effectiveness.
Ensure stock level, product quality and freshness through stock management and write
report on product issue.
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Actively Participate in Trade & consumer promotions.
Display company brand in order to maximize brand awareness & visibility.
Provide help to salesmen through regular and accurate communication.
Provide information about the competition in market and report to ensure that the
consumers are fully aware.
He should check daily sales report (DSR) whether it is generated daily or not, if not then
what is the reason behind this.
Check his salesmen work whether he is working properly or not.
To check records and assist the salesmen in stock management and sales (in the event of
any promotional activity).
If there is any problem with the salesmen issue he should find remedy and also able to
address local issues.
Maintain good working relationship with the company staff, salesmen and distributor.
He should pay surprise visit outlets to create moral check on salesmen.
If any salesmen is absent he should maintain the records of absentees and make sure the
delivery of stock to outlets under that salesman
Additional Information
The Distributor appoints FSO. His main task is to check and provide stock in outlets. It is his duty
to check the daily sales report (DSR) generated by salesmen if any DSR is missing ‘He should
enquire about it’. The role of the FSO is to manage the territory in order to achieve the
Distribution targets and promotional plans within the area.
Training Program
The main training program available to support the FSO function is:
1: Nine steps of sales call.
Knowledge
He should know about Market, Product, availability of stock in market and use of Microsoft
Windows and MS office.
Skills
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A good FSO should have following skills Communication, Negotiation, selling
Plans, Ability to build and maintain customer’s relationships.
Personality
Self motivated Team player and high standard of presentation and personality.
Key success Factors
Achievement of Sales and promotional targets assigned by the Distributor in regarding area.
Achievement of territory coverage targets.
Providing friendly environment to salesmen so they meet their territory targets.
Relationship:
The principle focus will be on the establishment of a close working relationship with the Traders,
retailers and the final consumers.
PTC Brands
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