K Final Report
Report On Marketing Management K&N’s (Marketing Mix) Submitted To: Madam Shumaila Dilawar Submitted By: Aneela Jabbar BB-08-15 Aqsa Mehmood BB-08-06 Arif Zafar BB-08-8 Rabeea Rafiq BB-08-33 Sahar Naveed BB-08-54 Sana Fatima Malik BB-08-64 Zobia Malik BB-08-19 Dedication We dedicate this work solely to our loving and supporting friends and teachers and those who have ever been praying for our success. Acknowledgements First and foremost, we would like to thank our Creator, Family and Friends for their undying love. We would never have come so far without them.
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We would also like to take this opportunity to thank my teacher, Madam Shumaila Dilawar, for her insightful guidance. Last but not least, we would like to thank our friends at Institute of Management Sciences that have always been proved helpful. For everything that is right, credit goes to all of the above. For anything that is wrong, we are culpable. Preface Practical leaning is an essential part of my education and it is the specialty that distinct the department of IMS from others. To have deep understanding of the concepts, only theoretical knowledge does not provide the concrete base. In this report we have bridge that gap.
The knowledge we acquired through this experience will be long lasting. Since we ourselves explored the field o work and analyzed different factors and variables. Introduction of K&N’s K&N’s, a founding pillar and beacon for Pakistan’s Poultry Industry started in 1964 with a single minded objective of providing better nutrition for health and happiness of the nation. Building on years of poultry expertise and commitment to food-safety, K&N’s integrated all poultry production activities under one umbrella to bring you safe and healthy chicken by managing and controlling all stages of production.
The year 1964; Pakistan a young independent nation forging ahead towards a dream: self sufficiency in food production. Malnutrition remained a major problem and one out of four children died before attaining the age of five. 80% of ailing children were affected with diseases caused by protein, vitamin and mineral deficiency. Poultry production, the quickest and least expensive way of filling the protein gap was planned to overcome malnutrition. Backyard poultry farming had to graduate to a more professional level. January 1964, a young man, Khalil Sattar, still a college student, had the vision to foresee a need to establish a poultry farm.
His interest led him to start a small broiler farm of 1,000 chicks. Little had he known this flock was to become the foundation stone of K&N’s? This was the simple, inspired and nationalistic beginning of K&N’s with a single-minded objective of providing better nutrition for Health and Happiness of the Nation. Poultry Breeding K&N’s maintains layer and broiler parent stock populations in different regions of Pakistan. Layer parent stock farms are located in the south and broiler parents are bred in the colder mountainous northern region. Both types of parents are housed at isolated breeder farms.
To ensure strict bio-security, all breeder farms work on the important principle of all-in-all-out to avoid multiple ages at any breeder farm. Breeding stock is housed in environment-controlled houses equipped with most modern ventilation, cooling and heating equipment. Some of the world’s best performances have been achieved at K&N’s. Strict bio-security measures are taken at all farms to reduce the risk of disease transmission through mechanically and physically transferred disease causative agents. Careful attention is paid to bird health, vaccination, weightage and selection to maintain healthy and uniform breeding flocks.
Hatching-eggs are cooled down inside air conditioned, humidified egg-rooms, packed and dispatched in sanitized and environment-controlled vehicles to company owned hatcheries located throughout Pakistan. Hatching K&N’s operates several strategically located hatcheries covering all day-old chick markets to ensure delivery of high quality layer and broiler day-old chicks to commercial farmers throughout Pakistan. All hatcheries are equipped with most modern cooling, heating and humidification systems to provide a uniform and consistent hatchery environment independent of varying outdoor weather conditions.
Incubators from world-renowned manufacturers are installed at all hatcheries and their performance data is recorded and monitored by a computerized incubation monitoring system. Upon arrival from breeder farms, hatching-eggs are candled at all hatcheries to remove eggs, which may have cracked during transit. Sanitation and hygiene is enhanced by mechanically transferring eggs from one type of tray onto another until chicks are harvested from hatchers. Maximum care is exercised while handling, reconstituting and administering vaccines using proper techniques and modern equipment.
To ensure chicks get off to the healthiest start and stay protected from viral diseases, they receive inject able and spray vaccinations at the hatchery. Day-old chicks are delivered to farmers in environment-controlled chick delivery vehicles to maintain quality during transit. After making deliveries, vehicles are washed and disinfected before entering the hatchery premises to avoid any risk of carrying disease causative agents back to the hatchery from the field. Feed Milling To ensure consistent performance with high standards, our chickens really live on a healthy and well balanced diet.
It is based on: natural grain products such as corn, corn gluten, rice and wheat; oil seed meals such as soybean, canola and sunflower; fish; oyster shells supplemented with multi-vitamins and minerals. Feed is always tested by our quality assurance lab to ensure it is wholesome because K&N’s does not compromise on quality. Feed is also supplied to our day-old chick customers and growers for realizing the profit potential of K&N’s quality day-old chicks. Poultry Processing At our state-of-the-art poultry processing plant, only healthy chickens are used to produce high quality, safe and healthy chicken products.
Chickens are Halal slaughtered by hand (Islamic Zabeeha) strictly according to The Shariah. After Halal slaughter, chickens are processed in the most hygienic and automated manner. During processing, the birds are washed inside out and our veterinarians constantly examine the birds to confirm they are wholesome. Cleaning is constant and each evening the entire operation is completely washed and sanitized. Only after very thorough inspection, the plant begins operation each day. All chickens pass through veterinary inspection to confirm they are wholesome.
To keep a continuous check on quality, hygiene and food-safety, random samples are collected from the processing line for lab testing. Some chickens are prepared to ship whole; others are packed as bone-in cuts or boneless products. Products for quality and food-safety conscious institutions – such as hotels, restaurants, airlines, clubs and international restaurant chains – are cut according to their specific requirements and packed in bulk packaging. Products for retail are packed in K&N’s branded packaging and individually weighed, adding another step to K quality control.
Products are then blast frozen at a very low temperature of –30? C to ensure product freshness, taste and food-safety. Ready-to-Cook and Fully Cooked Products Some chickens are used for preparing our ready-to-cook and fully cooked chicken products using state-of-the-art meat preparation and production equipment. Choicest meat is carved and select ingredients are added to our premium chicken meat, for preparing flavorful high-quality products such as burger patties, nuggets and kababs.
Our world-class value-added chicken products are individually quick frozen using Individual Quick Freezing (IQF) Technology. Distribution System and K Distribution stores Products are stored at -21? C to maintain freshness. Packed products are moved into K sanitized refrigerated trucks for distribution to ensure uncompromising quality control. K chicken products are available at K Chicken Stores and leading retailers and also delivered to quality and food-safety conscious institutions such as hotels, restaurants, airlines, clubs and international restaurant chains.
Quality Assurance Lab K state-of-the-art Quality Assurance Lab monitors the entire integration process, from livestock to feed and on to preparation of ready-to-cook & fully cooked products. The entire integration process is monitored and regulated to ensure K chicken products are wholesome, safe and healthy. K Poultry Diagnostic and Research Institute With the assistance of US Agency for International Development, K Poultry Diagnostic and Research Institute was established in collaboration with Pakistan Agricultural Research Council.
It is a very well equipped and state-of-the-art disease diagnostic, feed and feed raw material testing laboratory which provides invaluable service to Pakistan’s poultry industry through research and extension service in close coordination with K Advisory Service. Certifications •K’s ensures food-safety by implementing the HACCP* (international food-safety) System to produce safe and healthy chicken & chicken products. ( *HACCP (Hazard Analysis & Critical Control Points) — pronounced ‘hassap’— is an international food-safety system for preventing microbiological, chemical and physical contamination along the food supply chain. •Quality Management System at K&N’s is ISO 9001:2008 certified. Through this internationally recognized quality management system, K&N’s is able to control and monitor quality specific factors, which ensure consistency in its products and services while assuring customer satisfaction. •Chickens are HALAL slaughtered by hand (Islamic Zabeeha) strictly according to The Shariah. K&N’s slaughtering procedure has been assessed by Darul-Ifta ofJamia Ashrafia and Jamia Naeemia, both authentic institutions for granting Halal certification.
Corporate Social Responsibility K&N’s Advisory Service, a division of K&N’s, provides invaluable service to customers and the industry through the Nation’s widest network of sales, technical and extension service centers’. This division employs the nation’s largest team of veterinarians, nutritionist and highly experienced technical staff, and publishes technical bulletins, brochures, management guides and other advisory literature for customers, and also provides them with practical on-spot technical know-how.
Seminars are organized in all major cities and rural poultry centers where local and foreign experts are invited to address poultry farmers on latest poultry developments. Free of charge vaccination and de-betaking service is extended to customers, and least-cost feed formulations are also provided to farmers. Technical training programmes for poultry farmers are regularly organized and training is also imparted for carrying out vaccination and de-betaking. Through the training process, K&N’s has made a significant contribution to Pakistan’s rural development.
Tens of thousands of skilled and semi-skilled workers have been trained to provide service to industry, and to earn a livelihood for themselves and their families. Marketing Mix These are actually the 4 P’s of marketing. Marketing decisions generally falls into the following four controllable categories. Product Product is the actually offering by the company to its targeted customers which also includes value added stuff. Product may be tangible (goods) or intangible (services). While formulating the marketing strategy, product decisions include: •What to offer? •Brand name Packaging •Quality •Appearance •Functionality •Accessories •Installation •After sale services •Warranty Price Price includes the pricing strategy of the company for its products. How much customer should pay for a product? Pricing strategy not only related to the profit margins but also helps in finding target customers. Pricing decision also influence the choice of marketing channels. Price decisions include: •Pricing Strategy (Penetration, Skim, etc) •List Price •payment period •Discounts •Financing •Credit terms Using price as a weapon for rivals is as old as mankind.
But it’s risky too. Consumers are often sensitive for price, discounts and additional offers. Another aspect of pricing is that expensive products are considered of good quality. Place (Placement) It not only includes the place where the product is placed, all those activities performed by the company to ensure the availability of the product to the targeted customers. Availability of the product at the right place, at the right time and in the right quantity is crucial in placement decisions. Placement decisions include: •Placement •Distribution channels •Logistics Inventory •Order processing •Market coverage •selection of channel members Promotion Promotion includes all communication and selling activities to persuade future prospects to buy the product. Promotion decisions include: •Advertising •Media Types •Message •Budgets •Sales promotion •Personal selling •Public relations •Direct marketing As these costs are huge as compared to product price, so it’s good to perform a break-even analysis before allocating the budget. It helps in determining whether the new customers are worth of promotion cost or not. Product Features
For customers psychological benefits represent certain benefits they perceive to receive when using the product though these may be difficult to measure and may vary by customer. These benefits address needs such as status within a group, risk reduction, sense of independence, and happiness. Such benefits are developed through promotional efforts that target customer’s internal makeup. Four basic objectives of absolute integrity, enthusiastic diligence, continuous improvement and high quality maintenance are at the core of all operations which provide an impelling urge for attaining perfection.
Driven by its basic objectives in pursuit of perfection, K&N’s is committed to have superior product and unmatched service through devoted people and consistent development K products K have different product lines, but we will discuss only a single product line which is Ready to Cook meal. This category includes: •Nuggets •Chappli kabab •Burger patties •Chicken tempura •Kofta •Combo wings •Croquettes •Haray bharay nuggets •Hot tenders •Fun nuggets K from the very beginning has focused on providing better nutrition for the health and happiness of the nation.
Quality is very first priority that will make them build strong and profitable customer relationships. They are managing and controlling all stages of production in order to ensure 100% safe and healthy production of our product. Our product offers consumptions, attention to satisfy desire or need in the market. Level of Product • Core Benefit: providing the good taste. • Actual Product: our product includes all ingredients in packaging according to the core benefit. • Augmented Product: our product provide some benefits which are related to product just as recipe.
Branding Branding involves decisions that establish an identity for a product with the goal of distinguishing it from competitors’ offerings. In markets where competition is fierce and where customers may select from among many competitive products, creating an identity through branding is essential. It is particularly important in helping position the product (see discussion of product position) in the minds of the product’s target market Brand Names and Brand Marks At a very basic level branding is achieved through the use of unique brand names and brand marks.
The brand name, which may be either the individual product name or a name applied to a group or family of products, is important for many reasons including suggesting what the product is or does (e. g. , Mop-and-Glow). The name is also what we utter when we discuss the product (i. e. , word-of-mouth marketing). The brand mark is a design element, such as a symbol (e. g. , Nike swoosh ), logo (e. g. , Yahoo! graphic), a character (e. g. , Keebler elves) or even a sound (e. g. , Intel inside sound), that provides visual or auditory recognition for the product.
K brand Along with the developed brand identity and trust reposed by customers, K has established its name in international market as well. It is a well-developed and promoted brand. It is a strong brand which is leading to financial advantages through the concept of Brand Equity in which the brand itself becomes valuable. Packaging Nearly all tangible products (i. e. , goods) are sold to customers within a container or package that, as we will discuss, serves many purposes including protecting the product during shipment.
In a few cases, such as with certain produce items, the final customer may purchase the product without a package but the produce marketer still faces packaging decisions when it comes to shipping to the store. Factors in Packaging Decisions Packaging decisions are important for several reasons including •Protection – Packaging is used to protect the product from damage during shipping and handling, and to lessen spoilage if the project is exposed to air or other elements. •Added Value – Packaging design and structure can add value to a product.
For instance, benefits can be obtained from package structures that make the product easier to use while stylistic designs can make the product more attractive to display in the customer’s home •Visibility – Packaging design is used to capture customers’ attention as they are shopping or glancing through a catalog or website. •Distributor Acceptance – Packaging decisions must not only be accepted by the final customer, they may also have to be accepted by distributors who sell the product for the supplier. •Cost – Packaging can represent a significant portion of a product’s elling price. •Long Term Decision – When companies create a new package it is most often with the intention of having the design on the market for an extended period of time. In fact, changing a product’s packaging too frequently can have negative effects K packaging Each product is wrapped in butter paper, and then packed in sealed plastic bags that are safe for health, and then finally packed in the box. Some chickens are prepared to ship whole; others are packed as bone-in cuts or boneless products.
Products for retail are packed in K’s branded packaging and individually weighed, adding another step to K&N’s quality control. Products are then blast frozen at a very low temperature of –30? C to ensure product freshness, taste and food-safety. Labeling Most packages, whether final customer packaging or distribution packaging, are imprinted with information intended to assist the customer. For consumer products, labeling decisions are extremely important for the following reasons. •Labels serve to capture the attention of shoppers.
The use of catchy words may cause strolling customers to stop and evaluate the product. •The label is likely to be the first thing a new customer sees and thus offers their first impression of the product. •The label provides customers with product information to aid their purchase decision or help improve the customer’s experience when using the product (e. g. , recipes). •In some countries many products, including food and pharmaceuticals, are required by law to contain certain labels such as listing ingredients, providing nutritional information or including usage warning information.
K&N’s labeling ?K&N’s label is to attract the attention of the customers. ?COLOUR is attractive sharp red which is eye catching. These are the things which are listed on the wrappers ?Ingredients ?Nutrition Facts ?Procedure Nuggets Nutrition Facts Serving Size: 5 pieces (110g) Amount per serving Calories 263 Calories from Fat 147 % Daily Value* Total Fat 16. 30g Total Carbohydrate 14. 2g Fibers 1. 98g Protein 14. 90g Salt 1. 6g25% 5% 8% 30% * % Daily Value based on 2000 Calorie diet. Your daily value may be higher or lower depending on your calorie needs.
Procedure Appliances and utensils vary; adjust heating times accordingly. Do not defrost Karahi (Wok): Preheat oil to frying temperature (180°C). Deep fry frozen Nuggets for 3 minutes, or until golden brown. Oven: Preheat oven to 230°C. Bake frozen Nuggets on a baking sheet (turning halfway through baking) for 5 minutes, or until golden brown PRICING STRATEGIES Pricing is the monetary value of the benefit that a customer is paying to get that particular benefit. So a company is very careful in setting its prices. As we know that there are two types of new product pricing strategies Market skimming pricing •Market penetration pricing For its product K&Ns have selected the market penetration pricing strategy. They apply this strategy to keep their product prices lower so that by doing this we attract a large numbers of buyers and also to gain large market shares. The reason for not using market skimming strategy is that as its product is an eatable product and there is no sense of keeping high prices for an eatable product, because as K&Ns knows that skimming strategies are for luxury products. PRICE ADJUSTMENT STRATEGIES
After penetrating into the market, K&Ns will adopt adjustment strategies in order to increase its sales and attract more customers. Basically these adjustment strategies are according to the taste, culture and the changing situation of the market. Following are the price adjustment strategies. Segmented pricing. Psychological pricing. Promotional pricing. Geographical pricing. International pricing. DISCOUNT AND ALLOWANCE PRICING K&Ns applies this strategy by giving quantity discount to its customers. Quantity Discount: K&Ns gives quantity discount by offering “buy one get one free” offers.
Besides this K&Ns also gives discount to those customers who will buy in bulk or in large quantity. Segmented pricing: K&Ns launched its product in almost all the parts of the country with almost the same prices. They segmented their product price in the following ways. Time pricing strategy: In time pricing K&Ns lowers its prices according to different seasons. It reduces prices in Ramadan season, as its demand is more in that season. Promotional pricing: This strategy involves temporary lowering of the prices of the product below the cost to increase the short run sales.
K&Ns applies this strategy when any one of its competitor lower its product price in order to grab market shares. To compete with them it also lowers its product price so that it can retain its market shares. Geographic pricing: In Geographic pricing K&Ns adopts freight absorption strategy. Freight absorption strategy: K&Ns do not add freight charges to its product price in order to keep its product price lower, as its focus is to capture more customers. International pricing: As K&Ns is not yet internationally recognized so K&Ns do not set international prices for its products.
K&Ns is only serving nationwide so it sets prices of its product nationally. PRICE CHANGES: Some time companies have to initiate price change after developing pricing strategies Because of different reasons, Price change could be a price cut or price increase. Initiating a Price Cut: K&Ns already set a low price for its product but it cuts price of its product if its sales will not increase accordingly, in that situation K&Ns will cut the price in order to increase sales and to capture market shares. Initiating a Price increase:
Once K&Ns product achieved a position in a market and it sets a good image in the consumers mind and has a large number of potential buyers then K&Ns might increase its product price. But its aim is to give good quality product in an affordable price. K&Ns can initiate its product price when its product demand increases and K&Ns cannot supply according to the demand but INSHALLAH this situation will never come because K&N’s has its own poultry and breeding farms. Buyer’s Reaction to Price Changes: Changing in price has a great effect on the consumers mind.
They think that there should be some problem with the product so the company is decreasing its product price or the customers may interpret it as the company is closing its business and they will not offer this product in future. On the other hand price increase also affects the buyers in a way that they think that this product is unobtainable unless they buy it soon. They also think that the company is greedy and they are charging more prices for their product. Competitor’s Reaction to Price Changes: K&Ns is aggressive while changing its product price and has to change its product price according to the competitor’s product price.
So K&Ns keeps its competitors into consideration before lowering or increasing its product prices. Responding to Price Change: If any of the competitors of K&Ns changes the prices it affects its sales. So K&Ns analyzes the change and react to it accordingly. Like if they low their price it will decrease its sales so K&Ns then adopts strategies to increase its sale by lowering its prices, giving discounts or improving quality of its products. PLACE Place include company activities that make the product available to the target customers.
For customers, product and service should be as conveniently available as possible. This includes the strategies, how the organization is going to distribute the product or service to the end users. Distributing the right product at right time is the rule of thumb. Efficient and effective distribution is important to meet all the desired marketing objectives of the firm. If the firm is not understanding or underestimating the demand of the customers and customers are not getting the product due this negligence then it is going to affect the overall profitability of the firm in the long run.
PLACE MIX DECISIONS: Place mix decisions include designing the strategies for the better availability of the product at the right time to the target customers to achieve organizational objectives. It comprises decisions about: •Channels •Coverage •Assortments •Locations •Inventory •Transportation •Logistics CHANNEL OF DISTRIBUTION: Channel of Distribution involves the routes of getting the product from the manufacturer to the ultimate consumer. These channels of distribution are also called intermediaries.
There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others. Types of channel of distribution: There are two types of channel of distribution of the products or services available. •Indirect distribution: it involves the distribution of the product by the use of an intermediary for example selling the product to the wholesaler and then on the way to the retailers. Direct distribution: it involves the direct distribution of the product from the manufacturing concern to the consumer, without involvement of any third party or middle men. There is an advantage of direct distribution over indirect distribution that the manufacturer gains complete control over the consumer. The following figures depict the two types of channel distribution. INDIRECT CHANNEL OF DISTRIBUTION DIRECT CHANNEL OF DISTRIBUTION Distribution strategies: Depending on the types of the product, there are three major types of channel of distribution strategies available. . Extensive distribution: It is commonly used to distribute low priced or impulse purchase products e. g. chocolates and sweets etc. 2. Selective distribution: Here a small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread. 3. Exclusive distribution: It involves limiting distribution to a single outlet.
The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers. If the manufacturer decides to choose selective or exclusive distribution, then it must select an experienced, creditable and renowned intermediary. COVERAGE: Number of active retail and/or wholesale outlets (relative to a saturation level) that sell a specific firm’s brands in a given market. Required market coverage is achieved by following concentrated marketing, differentiated marketing, or undifferentiated marketing strategy.
Concentrated marketing: Concentrated marketing or niche marketing is market-coverage strategy in which a firm goes after a large share of one or a few segments niches. It appeals to the marketers when company resources are limited. Through niche marketing, the firm achieves a strong market position because of its greater knowledge of consumer needs in the niches it serves and a special reputation it acquires. It can market more effectively by fine tuning its products prices and programs to the needs of carefully defined segment.
It can also market efficiently, targeting its products or services, channels and communications programs toward only consumers that it can serve best and most profitably. It is highly profitable but at same time provides with greater than normal risks as companies solely depend on fewer segments for their business and large competitors can enter the same segment with greater resources. Differentiated marketing: Differentiated or segmented marketing is market -coverage strategy in which a firm decides to target several market segments and designs separate offers for each.
By offering product and marketing variations, companies hope to get higher sales and strong position in each market segment. But there is a drawback that differentiated marketing for each segment bears a lot of cost to satisfy each target segment’s customers. Developing separate marketing plans for the separate segments requires extra marketing research, forecasting, sales analysis, promotion planning, and channel management. Mass marketing: The marketing strategy that provides an opportunity to the organizations to appeal to a wide variety of potential customer is mass marketing or undifferentiated marketing.
Here a firm ignores the market differences and go after the whole market with another. The idea is to broadcast the message to the largest number of people possible. Mass marketing creates the largest potential market that yields to lower cost as it focuses on high sales and low prices. Typically, things which are perceived to necessary or essential to the consumer are subject to mass marketing. On the contrary, mass marketing fails to satisfy all consumer needs and face trouble to compete other firms following better marketing approaches.
ASSORTMENTS: Assortment means the group or collection of products and services offered in the market for sale. It refers to the variety of the offering being available in the market according to the customer’s demand. Role of channel members: Channel members play a vital role in assorting the quantity and variety of the products according to the market and consumer’s needs. Producers use these intermediaries because they create greater efficiency in making goods available to the target markets.
Through their contacts, market insight and scale of operation, they transform the assortments of the products made by the producers into assortments wanted by consumers. Producers make narrow assortments of the products in large quantities, but consumers want broad assortments of the products in small quantities. Marketing channel members buy larger quantities of the products from the producers and break them into smaller quantities and broader assortments wanted by consumers. So, intermediaries play an important role in matching the supply and demand in the market. LOCATIONS:
The location for the sale of the product is analogous to distribution center. A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products (goods) to be re-distributed to retailers, to wholesalers or directly to consumers… A distribution center can also be called a warehouse, a DC, a fulfillment center, a cross-dock facility, a bulk break center, and a package handling center. The name by which the distribution center is known is commonly based on the purpose of the operation.
Distribution centers are the foundation of a “supply network” as they allow a single location to stock a vast number of products. Some organizations operate both retail distribution and direct-to-consumer out of a single facility, sharing space, equipment, labor resources and inventory as applicable. How a distribution center operates? The way a typical retail distribution network operates is to have centers set up throughout a commercial market. Suppliers will ship truckloads of products to the distribution center. The distribution center will then store the product until needed by the retail location and ship the proper quantity.
Many retailers own and run their own distribution networks, while smaller retailers may outsource this function to dedicated logistics firms that coordinate the distribution of products for a number of companies. A distribution center can be co-located at a logistics center. Storage at distribution center: Another important secondary role of distribution center is storage. Many retailers have prioritized having as many items in stock at one time as possible. To conserve space, minimize inventory costs, and maximize the variety they offer the retail might only stock one or a few items of a particular product.
This requires the ability to ship a replacement quickly once an item is sold. By keeping product on hand in the distribution center, the retailer can ship a replacement almost immediately after a product is sold. Storage location and storage containers: Goods (products) arrive and are stored in a distribution center in varying types of storage locations and containers suited to the product characteristics and the amount of product to be transported or stored. These types of locations and containers have specific industry accepted names. There are specialized and various types of containers.
The following is a list of some of the names and characteristics of common storage containers: •Intermodal containers (shipping containers) – are used for the efficient transportation of goods. There are standards that specify the volume and dimensions of containers to facilitate efficient handling. •Pallets- are one of the most commonly used means to store and move product in a distribution center. Pallets are stored on the floor, may be stacked, and may be stored in pallet rack. •Gaylord’s- are large single boxes usually connected or attached to a pallet. Cases and Cartons- are boxes usually containing many items. In distribution centers there is a generally accepted distinction made between the terms carton and case although both are boxes. Goods are received and stored in cartons. Goods are shipped in cases. A stored carton is called a case once it has been picked or pulled for shipment. •Totes- are reusable containers used to hold and transport goods. INVENTORY: Inventory or stock means a list compiled for some formal purpose, a list of goods and materials to the goods and materials themselves, especially those held available in stock by a business.
Manufacturers’, distributors’, and wholesalers’ inventory tends to cluster in warehouses. Retailers’ inventory may exist in a warehouse or in a shop or store accessible to customers. Reasons for keeping stock: There are three basic reasons for keeping an inventory: 1. Time – The time lags present in the supply chain, from supplier to user at every stage, requires that you maintain certain amounts of inventory to use in this “lead time. ” 2. Uncertainty – Inventories are maintained as buffers to meet uncertainties in demand, supply and movements of goods. 3.
Economies of scale – Ideal condition of “one unit at a time at a place where a user needs it, when he needs it” principle tends to incur lots of costs in terms of logistics. So bulk buying, movement and storing brings in economies of scale, thus inventory. While the reasons for holding stock were covered earlier, most manufacturing organizations usually divide their “goods for sale” inventory into: •Raw materials- materials and components scheduled for use in making a product. •Work in process, WIP- materials and components that have begun their transformation to finished goods. Finished goods- goods ready for sale to customers. •Goods for resale – returned goods that are salable. Inventory management: Inventory management involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check. Systems and processes that identify inventory requirements, set targets, provide replenishment techniques and report actual and projected inventory status. The improvement of inventory management has two parts: the capability of the organization to manage inventory, and the way in which it chooses to do so.
For example, a company may wish to install a complex inventory system, but unless there is a good understanding of the role of inventory and its parameters, and an effective business process to support that, the system cannot bring the necessary benefits to the organization in isolation. Management of the inventories, with the primary objective of determining/controlling stock levels within the physical distribution function to balance the need for product availability against the need for minimizing stock holding and handling costs. TRANSPORTATION:
Transport or transportation is the movement of people and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations. Transportation infrastructure: Transport infrastructure consists of the fixed installations necessary for transport, and may be roads, railways, airways, waterways, canals and pipelines, and terminals such as airports, railway stations, bus stations, warehouses, trucking terminals, refueling depots (including fueling docks and fuel stations), and seaports.
Terminals may be used both for interchange of passengers and cargo and for maintenance. Vehicles traveling on these networks may include automobiles, bicycles, buses, trains, trucks, people, helicopters, and aircraft. Operations deal with the way the vehicles are operated, and the procedures set for this purpose including financing, legalities and policies. In the transport industry, operations and ownership of infrastructure can be either public or private, depending on the country and mode. LOGISTICS:
Logistics can be classified as an enterprise planning framework for material management, information, service and capital flows. In the words, logistics can be defined as having the right type of product or service at the right place, at the right time, for a right price and in the right condition. The primary goal of the logistics is to effectively manage the product life cycles and resultant efficiency. Logistics does not mean a single work activity but refers to a group of activities performed to attain the goal of a business enterprise that is maximizing the Profits.
This may involve steps like purchasing, planning, coordination, transportation, warehousing, distribution and customer service. Logistics management: Logistics management is that part of the supply chain which plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer and legal requirements. A professional working in the field of logistics management is called a logistician.
Logistics management is known by many names, the most common are as follows: •Materials Management •Channel Management •Distribution (or Physical Distribution) •Business or Logistics Management or •Supply Chain Management PLACE MIX_K: K chicken products are available at K Chicken Stores and leading retailers and also delivered to quality and food-safety conscious institutions such as hotels, restaurants, airlines, clubs and international restaurant chains. It has a strong supply chain through its distribution channels. In Pakistan K is operating in more than 35 cities.
There is very diversity in its distribution. We take the example of Islamabad city . In Islamabad there are many stores as well as retailers in every sector, and only in I-8 there is one K store and 17 retailer’s shops. DISTRIBUTION OF PRODUCT: After the development of product, product should be distributed into the market for the satisfaction and attraction of our consumers. The products play a vital role in the availability of their services to attract the customers. How to Distribute Product to Retailers: K follows the following ways to distribute product to retailers: •Sell Directly to Retailers Sell through distributors, which sell a broad range of products to many retailers •Sell through captive distributors, which sell a broad range of products to one chain of retailers. •Sell through distributors, which sell to targeted customers. Distribution Channel of Product: The distribution channel of our product is indirect marketing channel because this channel contains one or more intermediary levels. Cities in which products are available: In Pakistan, K chicken is available in the following cities. Abbottabad, Bahawalpur, Chakwal, Chiniot, Daska, D. G. han, Dharki, Dina, Faisalabad, Farooqabad, Gujar Khan, Gujranwala, Gujrat, Hyderabad, Islamabad, Jaranwala, Jhelum, Kabirwala, Kamra, Karachi, Khanewal, Kharian, Lahore, Lalamusa, Larkana, Machi ghot , Mangla, Mansehra, Mardan, MirpurAJK, Mirpur Methelo, Mirpurkhas, Multan, Murree, Noshehroferoz, Nawabshah, Noshehra, Okara, Panu Aqil, Peshawar, Pitaro, Quetta, Raiwind, Rawalpindi, Rahimyarkhan, Risalpur, Sadiqabad, Sahiwal, Sargodha, Shorkot, Sialkot, Sukkar, Tandoadam and Wah cant. Promotion Strategies: Promotion is the activity in which the company has a chance to interact with its customers.
To Promote K uses different promotional tools. These tools include advertisements, sale promotions, public relations, personal selling and direct marketing. Advertisements: It uses informative advertising because it is mostly used when introducing a new product. The objective of it is to build primary demand. It will use the persuasive advertising when it has a competition in the market. Sales Promotions: In sales promotions it uses different discount strategies, giving short term incentives in order to increase its sales.
It also introduces sponsorships, memberships and discount coupons. Memberships: K also offers memberships to its customers. The K’s Way Club membership is free. One can enroll by just filling the form, click submit and simply print the Temporary Card. Temporary card: Having enrolled as a new club member, you can use your Temporary card to earn points with immediate effect. Please remember to always present this Temporary Card while shopping at K&N’s Chicken Store for point’s credit into your club account. Club card and pin:
Along with your club Member card, you will also receive a 5-digit PIN (Personal Identification Number). You will need this PIN (along with your club card number) to enquire about your account balance; update your individual club profile online, and for all other club online services. As a new member, it is important to know you cannot use our online services, nor redeem your points, until you have received your PIN. One can also enroll oneself by filling out the Enrolment Form available at all K&N’s Chicken Stores and send it to the company.
One has to detach The K’s Way Club Temporary Card and retain it. After becoming the member, K&N’s offers different discounts, exclusive privileges and other benefits to its members when they collect points. The more they collect, the more they benefit. As a member every time you shop at any K&N’s Chicken Store in Pakistan, you earn valuable points which can be redeemed for free K&N’s products. Number of points: Number of points earned is directly related to purchase amount, K product category and your status within The K’s Way Club. You earn 2. 50 status and award points for every Rs. 0/- spent on Whole Chicken, Designer Cuts and By-Parts. For Boneless products you earn 3. 50 points, while for Ready-to-Cook, Fully Cooked and Deli Line Products you earn 5 points for the same amount spent. Your club status determines whether you will be able to enjoy additional benefits and privileges associated with Silver, Gold or Circle status within The K&N’s Way Club Program. Award points: Award points are earned every time you shop at a K&N’s Chicken Store. As the name suggests, award points can be exchanged for awards, such as free K&N’s products and special discounts.
Award points can also be earned against special K’s product offers and promotions from time to time. Award points do not count towards determining club status. Status points: Status points are earned simultaneously with award points every time you shop at a K&N’s Chicken Store. As the name suggests, status points determine club status and enable you to move towards and/or retain the higher Silver, Gold or Circle status. Certain limited time promotions or special offers may be excluded from status points’ accrual. Executive bonus:
A higher status of Silver, Gold or Circle within the Club also entitles you to an Executive Bonus on award points earned, even for the same purchase amount. If you have Silver status, you earn 25%. Gold status entitles you to 50%, while Circle status gives you 100% Executive Bonus. Executive Bonus is not applicable on Status Points. Member: Once you have reached 50 status points K&N’s welcomes you as a permanent Member of The K&N’s Way Club where a world of privileges, attractive awards and benefits are offered to the customers on their future shopping.
Silver: Attaining Silver status is easy and within reach. To start with, a customer has to earn 25% Executive Bonus award points on every purchase he makes, and enjoy a host of other privileges designed for the Silver members. Gold: A customer has to earn required number of status points and he gets the Gold status The K’s Way Gold members get as much as 50% Executive Bonus award points on purchases, 6 discount eVouchers in a calendar year for attaining or extending the status each time, and other privileges designed only for the Gold members.
Circle: The K&N’s Way Circle status recognizes the loyalty of the exceptional customers. It offers these privileges as an expression of their utmost appreciation for the loyalty of their exclusive ‘circle’ of such customers. For instance, if a customer treats himself to 100% Executive Bonus award points on his purchases, 12 discount eVouchers in a calendar year for attaining or maintaining the status each time and other privileges designed exclusively for their Circle members. Personal Selling It also promotes its product through personal selling.
Personal selling is more effective than any other promotion strategy. Through personal communication, it is easy to persuade someone to buy your product, because in personal selling there is a direct contact with the buyers. Public Relations: To increase its sales it also ties good public relations. K&N’s develops its public relation by doing the work of social responsibility, like wishing happy Eid or wishing any other special event to the customers. Through Public relations it also creates a good word of mouth for the product which is the most efficient way of promoting a product.
Direct Marketing: In direct marketing K&N’s targets its customers through internet, telephone, print media and electronic media (television and radio). Print Media: It promotes its product through print media by advertising its product in newspapers and in different magazines. K&N’s adopts this type of advertising when it wants to introduce some new discount packages or sales offers. Other then advertising in newspapers and in magazines it also advertises its product on bill boards and banners. Electronic Media:
To promote its product through electronic media K&N’s advertises its product on different television channels and on radio stations. To make its product information more convenient and easy it provides its website and 24 hours toll free numbers, through which the customers can contact and also give feedback about the product. The website of K&N’s is http://www. kandns. com Promotion for kids: To make its products favorite among kids, K&N’s introduced a product called “Fun Nuggets”. It has designed special advertisements for children.
As kids are more attracted by cartoons, K&N’s has used cartoon characters like dinosaurs, dolphins and ducks and have given them special names like Din Din, Dolf and Ducky to make their products familiar with kids. K&N’s Cooking show: To promote its product, K&N’s has now brought a dedicated cooking show for quick recipes with answers to all viewers’ ‘how do you do that’ questions, and helpful tips – all at Smart Cooking with K’s! Chef Mehboob Khan is the name consumers trust and count on for reliable and tasteful recipes.
People can now watch him use a wide range of K&N’s chicken products for easy-to-prepare recipes like Lahori Karahi, Chicken Ala Kiev, or Fajita Wraps. Smart Cooking with K&N’s is aired on every Saturday 6:30pm, Sunday 4:00pm and Wednesday 2:00pm, on ARY Zauq. In this winter, to promote its products, K has now offered discounts on its products like Croquettes and chapli kabab. Similarly, in Ramazan, K offered its members to get 50% bonus award points on all of its products. In the same way, it had offered its members price discounts on Haray Bharay Nuggets and Tender Pops in Ramazan.
Other then the print and electronic media the cheapest way to promote the product is through Short messaging service: They have a contract with different cellular companies where they will send K promotional messages to their special numbers. K face book page: K has also created face book page. Now-a-days, many companies, designers and artists are making their fan pages on face book for the advertisements of their products. People go on these pages, learn about the products, give their comments, resolve their queries and recommend these pages to their friends.
In the same way, K has made its face book page to advertise its products. Its face book link is: http://www. facebook. com/pages/KNs-Chicken/120891524596651 Promotion Budget: To allocate budget for the promotion strategies K uses objective and task method. According to this method first it defines its promotion objectives, that why are they promoting their product? After that they determine different tasks to accomplish those objectives and at the end they estimate the cost utilized in performing these tasks. PRODUCT POSITIONING
It is the evaluation of a company’s product’s position that what place it occupies in the market and how customers differentiate it from other products. Choosing positioning strategy To position the product different companies use different positioning strategies. Major competitors: Major competitors of K and N are •Kitchen confidence. •Mano Salva, • seasons canola`s menu •Locally available chicken Kitchen Confidence basically produces frozen products like Chicken Nuggets. Burger Patties, Meat balls, Samosa,Rolls etc. Recently co. has started non frozen item i. e. Bread Crumbs.
Salwa Foods offers an assortment of deep frozen food products for both retailers and food service. The assortment ranges from basic standard products to highly refined ready-made products. Salwa foods have launched its ready to cook items under the name of Mano Salwa. Season’s canola has launched its range of ready to cook food items with the name of menu. But the largest of the competitors that was a challenge to K and N was the locally available chicken in the market. It had the stereotypic advantage of being truly Halal and cheap than any kind of chicken available in packets in frozen form.
Competitive Advantages Following are the competitive advantages that make it different K & N from rest of its competitors. Product Differentiation: We offer a pack of four. Each separately wrapped in butter paper, combined packed in sealed plastic bags that are safe for health, and then finally packed in the box. Service Differentiation: Our product will be accessible and will be available at every outlet of K. Channel differentiation: In Pakistan K is operating in more than 35 cities. There is very diversity in its distribution. We take the example of Islamabad city .
In Islamabad there are many stores as well as retailers in every sector, and only in I-8 there is one K store and 17retailer’s shops. People differentiation: Technology is highly involved in the production so we will hire trained staff, those who knows how to operate the machines. We also hire qualified staff in order to guarantee healthy relationship between customers and retailers. Image differentiation: Since our product comes under K brand name hence a good image will be casted over the consumers. Also K is a symbol of quality; hence will automatically be recognized as a quality product.
Product Chain K are enjoying their own product chain. They have their own breading and poultry forms, from where they get there raw material for their product. Choosing the right competitive advantage •Important: We deliver highly valued benefits to our target customers in our products. •Distinctive: we have no strong competitor and enjoy distinctiveness in the market. •Superior: we are providing pure hygienic food in at comparable prices. •Communicable: the consumers can feel the difference in our quality, taste, hygiene and prices that are communicable. Preemptive: competitor needs a lot and lot of hard work to match our standard else it is not possible. •Affordable: Buyer can afford to pay for the difference. •Profitable: the difference is profitable both for the company and the customers. Selecting an overall positioning strategy Our overall positioning strategy will be focused on More for Less winning value proposition i. e. will offer more quality at less price range and we will focus on the needs and wants of target customers in order to give high customer value and satisfaction POSITIONING STATEMENT
To target the teenagers, working women, hostilities and bachelors, we offer, a ready to eat hot and spicy paratha, with high quality, affordability and accessibility. Conclusion We have come to a conclusion that K is the most superior and famous quality delivering company. Its Promotion through advertising is highly frequent on different TV channels. It has differentiated itself from its competitors by having highly trained sales person with different discount allowances and coupons. It has developed strong bonds with its customers. It