1.

INTRODUCTION
Milk processing capacity increased by 200% to 200 million liters annually, will become the only company in Pakistan covering the entire milk catchments area. Already has the second largest chilled milk collection system in the country Distribution network. Forces in the external environment that affect companys performance are, political, economic, social and technological. Nestle being the leader with 40 % market share. Typical packed milk consumers are the children. Therefore, an Engro food has a large number of consumers throughout the country. Engro Foods Ltd, a private firm that keeps about 22 % of market share in the milk food industry Pakistan. Established in 2005, a 100% owned subsidiary First investment of dairy plant Processed milk market is growing at approx. 20% per annum Olpers achieved peak market shares of 12.3% within 6 months of launch. Other products launched Olpers Cream, OLwell, Omore, Tarang, Tarkka ghee, Olfrute, Owsum and Dairy Omang. Plans to expand product portfolio. Olfresh is a new yogurt brand of Engro that Eat fresh and be healthy or Worth yourself Basically our product Olfresh lies in FMCG product categories. So it used by every person in daily life. Olfresh is a Branded yogurt is a new product in the portfolio of Engro in Pakistan because at that time only Nestle is providing it so, this brand has a scope of expansion because in this busy life where health is very important for people so safe and fresh yogurt has a good market because it is a daily life necessity. It also increase the product choice for health conscious and brand conscious people it will make customers more loyal to company because in this way company will respond more quickly to the changing needs and preferences of people and consumer. BRANDS OF ENGRO FOODS

23

1.2 PRIORITIZATION
At Engro, we believe in garnering relationships with people of caliber and giving them diverse roles to prove themselves in. Our commitment to our people is long-term and sustainable as we continually do our bid by offering opportunities and rewards to those who excel. Career at Engro Fertilizers is a dynamic process of unending capacity building, learning and sharing fruits of companys success. Making Leaders Engro believes in the boundless capacity of the human spirit. We regard that each of our employees has a distinct value that should be maximized to its fullest potential. New employees that enter the Engro club are quickly absorbed into initial positions depending on their interests and strengths. We provide on-job development and strong incentive to learn by experience and hard work. Finally, we create new opportunities and job roles for our most motivated and talented employees. We share the ambitions of our people and give them the right tools to take their careers forward to more challenging roles. Careers never stop growing at Engro; rather, every step opens yet more opportunities for growth and ambition. Nurturing Environment Work and enthusiasm go hand in hand at Engro. We prioritize matters of employee wellbeing and health while ensuring that our working environment remains safe and friendly for everyone. Our employee-friendly policies ensure work culture free of discrimination and harassment that keeps balance with family life and community involvement. Employees at Engro can also personalize their terms and avail flexible work hours, off track policy or even work part time. As an equal opportunity employer, we encourage diversity and strive to provide convenient working conditions for women employees. Engro also has a very active Womens only intra-company network called WEAVE where our women employees can engage and build relationships across Engros many companies. Compensation and Benefits The Companys remuneration package is aligned to be the best in industry. We balance remuneration between month-end salaries and long-term benefits including proper 23

medical coverage and retirement plans for all employees. End-of-year performance bonuses add up to total benefits and incentives hard work, which gives Engro its strong performance driven culture. The people that make Engro Fertilizers are not just companys employees; they are its partners and shareholders Engro employees can avail the unique opportunity of acquiring ownership shares in the company via Employee Share Option Scheme. This commitment to our people goes beyond traditional employer-employee relationship to a distinct sense of sharing responsibilities and successes. Alumni People who join Engro find themselves part of a large community of diligent professionals who share common values and desire to succeed. This connection is sustained even when professionals leave Engro to work at other capacities. Our alumni form a wide network of motivated individuals within Pakistan and abroad who carry with them strong sense of work commitment in their respective industries. For us, true potential for personal growth is met when individuals are respected for their decisions. The informal alumni connection at Engro is meant to allow professional networking across many different industries that allows our alumni to avail new opportunities. Formal events at Engro further strengthen and structure alumni relationship with the Company.

2. EXTERNAL AND INTERNAL ANALYSIS

2.1 COMPETITIVE ANALYSIS

The strategic priorities of Nestle Pakistan are claimed to be focused on delivering shareholdervaluethrough t h e a c h i e v e m e n t o f s u s t a i n a b l e , c a p i t a l e f f i c i e n t a n d p r o f i t a b l e l o n g - t e r m g r o w t h . Improvements in profitability would be achieved with due respect to quality and safety standards at all times. In line with the above objective, Nestle Pakistan aims at growing into a number one food company in 23

Pakistan in the shortest possible time with the unique ability to meet the needs of consumers of every age group from infancy to old age, for nutrition and pleasure, through development of a large variety of food categories of products with highest quality. N e s t l e trained work force, which would drive growth through innovation and renovation. Special training programs have been designed for employees at each level to keep up with and develop this vision. The study concludes that Nestle has a significantly high growth rate (36%) and has grown and developed at a high pace in short span of time. On the other hand Haleeb has a market share of 28%. And Engro foods having 21% the major contributor toward this growth and development are human resource, marketing and sales departments. The major contributor is its appropriate strategy particularly its relationship with the social and environmental sectors. Perhaps this is the reason that it in spite of being a multi-national has been well accepted in Pakistani culture. There are ample chances of its survival in future. Keeping new players such as Olpers, and the old ones like Haleeb, Nestle focused more on advertising. Nestle have been experiencing a constant increase in cost with raw material contributing the larger part of this increase. Haleeb having their own suppliers so the raw material cost is bit low. Nestle maintained its value of gross profit margin around or above 30% to ensure that it has a s t r o n g c o n t r o l o v e r i t s c o s t s , a n d t h e e f f i c i e n c y o f p r o d u c t i o n . B u t o n t h e o t h e r h a n d , Haleeb faced a bit of down fall when Olpers introduced.

2.2 KEY SUCCESS FACTORS

Following are the key success factors that need more consideration from us to monitor in order to succeed in the market.

23

Quality Quality is a very important attribute in order to survive in the market. Our personal research about branded yogurt proves this fact. People give importance to quality. So, it is necessary to accomplish high standard of quality on continuous bases. Price Price is a very important factor for success almost in each industry and sector. Companies are very care-fully in selecting the price for the product by considering its target population. Our main concern is that to provide a quality product with reasonable price. Cost We want to provide a low price substitute of loose yogurt to market, so it is necessary that cost of production should be under control. Otherwise it is very difficult for me to provide a comparatively low price substitute. Hygienic Hygienic product is very important and critical success factor for our product because we try to differentiate my product from currently available yogurt on the bases of hygienic factors. Our research shows that people prefer to buy it on the bases of healthiness and quality. Taste Taste is also very important factor to be considered all the time of product life. According to research people gives importance to taste while they decide to by organic sugar. Because many people think the taste of organic sugar is not good so it is very necessary to improve it.

23

2.3 SWOT ANALYSIS Strengths

1. Engros back Olpers is a brand of ENGRO foods. This means that consumers can relate their former image of ENGRO foods to Olpers. ENGRO is a well established brand name in Fertilizer, IT and infrastructure business. The brand is well known so customers will automatically have a brand association with Olpers and its other products and see them as a premium quality product. ENGRO is world renowned so it can easily attract foreign investors in backing it against other competitors such as Nestle. ENGRO foods can easily afford research and development costs in order to introduce new products. It can also distribute the brand through better channels because of its long term relationship with distributors in the agriculture sector. 2. PR With farmer ENGRO has been interacting with the farmers for fertilizers and has gained quite a good reputation over the years. It has led to a strong bond and long term relationship with the farmers who are willing to supply milk to the company. This is an added advantage and strength for the company because it will never be short of milk production. The farmers also wont have to look elsewhere to sell their milk. 3. Strong Consumer & Product Research Olpers, Omore, and other products of Engro has done a strong consumer & product research before and after launching the product. This has provided them the perfect launching pad to eventually emerge as a global player in the food industry. To develop its future portfolios, EFL has hired various global research partners like AC Nielsen, Mindshare, JWT Asiatic and MARS marketing and advertising agencies. 4. Third generation Plant EFL only, has the third-generation UHT milk plant in the country. EFL plant is the only plant in Pakistan that uses Bactofuge technology to virtually eliminate bacteria and ensure premium quality and hygiene. Moreover, it has set up another milk processing plant in (Sahiwal) with an investment of Rs. 2 billion (US $ 33 million). 23

Weaknesses
1. Olwell TVC Olwell ad which is based on Western life style. In this ad they are creating associations with the brand through the stripes, which is a highlight of Olwell packaging. Half naked people have been shown with tattoos of the same stripes in order to show that they are loyal consumers of Olwell. Also, the talent, situations and locations connects well with the ad to give Olwell a premium positioning. The brilliant marketing people at ENGRO Foods failed to analyze is that the market they are targeted the ad on, is Pakistan, where practicing Muslims reside, who have strong religious beliefs. When making the ad, the brand managers were focused on, making an ad that should give the brand the most premium look and feel amongst the target consumers but on the other hand they were least bothered about the ethics, religious beliefs and cultural values. 2. Packaging EFL is dependent upon Tetra Pak for the packaging of its entire dairy products. Tetra Pak is the only option available to EFL for packaging because it is having monopoly in the packaging sector in Pakistan. Due to this reason, Tetra Pak can charge them higher and it would increase the production cost. 3. Moderate Milk Quality EFL is not having its own dairy farms; it largely collect loose milk from farmers and which sometimes is of low quality and impure because they add vegetable oil to milk to get higher prices. 4. Milk collection & distribution cost As EFL do not have its own dairy farms so collection and distribution of milk increases the cost and it also increase the chances of milk getting spoiled because of increased traveling time.

Opportunities
1. Increased funding by government Government has decided to increase farmers funding. This is an opportunity for ENGRO foods because previously due to weather conditions and other reasons there was lots of

23

wastage of milk but now that can be reduced as farmers will be better able to store milk for longer time periods. 2. Increased consumption of Processed Liquid Milk Competition may create opportunities for the company because each competitor in the milk industry wants to increase penetration of processed liquid milk and so they will create awareness for consumers through different advertising media. This will ensure the increase in the consumption of processed milk instead of lose milk and so will in turn lead to increase in sales for the company. Therefore there will be an opportunity for accelerated growth. 3. Awareness Growing dissatisfaction with loose milk and increasing awareness about health and hygiene issues have led to increased processed milk consumption. 4. Third largest producer of milk Pakistan is the Third largest producer of milk in the world with a total production of 32 billion liter of milk a year, whose value is more than that of the combined value of wheat and cotton, from a total herd size of 50 million animals (buffaloes and cows). Livestock accounts for 46.8 percent of agricultural value added and about10.8 percent of the GDP. Milk is the largest commodity from the livestock sector accounting for 51 percent of the total value of the sector. Due to the steps taken by the government and private sector, countrys annual milk production is expected to grow at an additional 3 billion liters in the next few years. This is quite an opportunity for ENGRO foods as there is lot of growth in this part of the sector. 5. Generating need in niche market Niche market is the major opportunity for Engro as it would be as a status symbol, while catering the upper middle and middle class as well. 6. Bottled water As per its major competitor Nestle bottled water is a major opportunity because now a day people are facing problem of unavailability of clean water. A big field of business is in it having vast consumer market.

23

Threats
1. Competition Competition may pose a threat because the company will have to maintain its leadership in an expanding market so that it doesnt lose its market share to its competitors. For EFL it might be difficult to penetrate in a market where the loyalties exist for such brands as Nestle and Haleeb. These brands have been in the milk industry far too long and have left a mark in the minds of consumers in terms of quality. Competition seems to be getting tougher as a result of new players entering the dairy market. 2. Economic conditions The uncertainty of economic conditions poses a great threat. Additional general sales taxes and tough economic conditions of the country are reducing the purchasing power of the people. So in case of food item, this fact is also applicable because GST is also imposed on food items 3. Type Of Competitors There is two type to competitors one is direct and the other is indirect. When we talk about our direct competitor we see there is one direct competitor who producing similar product as we are going to produce that is Nestle that have already a branded yogurt in its product portfolio so our head to head completion is with Nestle and also with other loose yogurt producers who are in very large amount all over the Pakistan.
Embracingopeninnovationand newbusinessmodels

2.4 INTERNAL CAPABILITIES

Engro clearly recognizes that to achieve its growth objective it must extend its internal capabilities to establish a large number of strategic partnering relationships. It has embraced open innovation and works aggressively with strategic partners to co create significant new market and product opportunities. Importance of Strategic Focus within Target Benefit Areas

23

Engro has a very clear framework to screen new opportunities. It has identified target benefit areas that relate to nutrition, compliance and quality, and taste. In order for any idea to be pursued it must be strategically aligned with one of the identified target benefit areas. Building partnerships based on trust and goodwill Engro has developed an internal culture based on a sharing is winning philosophy and recognizes that big growth opportunities can only be co created with partners if the relationship is based on a strong foundation of trust and goodwill. Importance of program management and discipline The number of discussions at various stages in the partnership life cycle to drive the growth Engro is trying to achieve is only possible with strong program management capabilities and rigorous discipline build into the decision making process.

3. Sales Management Practices

3.1 Strategic Planning and Marketing
Expansion In order to meet the requirement of product demand and also keeping in mind the restriction of government in Punjab region ENGRO management find way to solve this is in the capable way and they have stated a project of installation of a fertilizer plant in Sadiqabad Sindh. Unrelated Diversification At its start it was ENGRO CHEMICAL and after that they found opportunities in FMCG (fast moving consumer goods) industry. They started processing milk by offering an attractive brand Olpers. Engro have now planned to start rice plant in Pakistan. In industrial area outsideLahore near Mureed-kay Engro is also installing a rice plant. Related Diversification:

23

Engro was playing well in milk industry and they wanted to expand their business. For thisthey did related diversification and started an ice cream with a brand name of Omore.

Expansion Plan of Rs.8.7 Billion The expansion plan comprises investing Rs 2 billion in the powdered milk business, whereas the rest of Rs 6.7 billion will be invested to acquire more livestock, expand dairy capacity and cold chain infrastructure development. It will be financed by a mix of internal cash generation of Rs 3.7 billion and a loan of Rs 5 billion, analysts said adding the company was planning to introduce new products in the UHT and the ice cream segment where the emphasis would be on the products that would be new to the Pakistani market, the details of which were yet to be disclosed. Furthermore, the company is also planning to enhance its North American operation by launching paratha and rice products. Engro Foods Limited is a growth story at local bourse, which has outperformed the market by 93 percent year to date. The company is continuing with its aggressive growth strategy and plans to invest further Rs 8.7 billion for expansion in 2012. Dairy and juices segment reported hefty earnings of Rs 1.4 billion in 2011, a growth of 100 percent with net profit margins improving to 5 percent. Sales grew mainly because of higher sales of its tea whitener (Tarang) and a new variant Dairy Omung (catering to budget conscious society of the country). The ice cream business (Omore) witnessed an increase of 62 percent in its revenues to Rs 2.6 billion and gained market share to 24 percent from last year. However, the segment reported a loss of Rs 0.4 billion in 2011 as the segment is still in its growing stage and much is being spent on the marketing of the product so as to create the brand name. Quality Improvement Engro Foods Limited only has the third-generation UHT milk plant in the country. EngroFoods Limited plant is the only plant in Pakistan that uses Bactofuge technology to virtually eliminate bacteria and ensure premium quality and hygiene. Engro Foods are 23

using TETRA PAK for its milk packing. This is best way to deliver quality milk to the consumers.

Backward Integration Engro started their own collection centers in different town and villages around the country. At these collection centers they test raw milk from every small supplier to meet the quality standards. Market Penetration To capture consumers of unbranded product producers Engro Foods are creating awareness among customers through different marketing campaigns. For this they use print media and television ads. They promoted their products as a part of our culture. Penetration Pricing ENGRO FOODS had to compete with the giant player in UHT milk industry. They had to provide best quality milk at a competitive price. They use promotions and comparatively low price to capture high market share. Forward Integration In order to build confidence and provide the best quality products to the customer in time Engro Foods is not relying on third parties for sale and distribution and has its own sale and distributing network. Attractive Packing In order to attract the eyes of its customer, Engro Foods is using very attractive colors. For example in Olpers red and white, Olwell white and purple, in Tarang many attractive colors are being used.

Porters Five Forces Model

1. Threat of New Entrants The average entrepreneur can't come along and start a large food company. The threat of new entrants lies within the food industry itself. Some companies have carved out niche areas in which they underwrite dairy supply. These food companies are fearful of being 23

squeezed out by the big players. Another threat for many food companies is other food services companies entering the market. a. Capital Requirement: Competing in a new industry requires resources to invest. Production of packed products requires huge investment of financial, human, technical, and marketing resources. At the moment Engro Olpers have some threats like from new entrants Goodmilk product of Shakarganj food b. Economy of Scale: Economy of scale determines entry because they force potential competitors either to enter on large scale bases (a costly and perhaps risky move) or to accept a cost disadvantage. Moreover, new entrants in the pasteurized milk business may encounter scale related barriers not just in the production, but in the advertising marketing, distribution, financing, and raw milk purchasing as well, Engro foods achieved its breakeven in 2003. 2. Availability of Substitutes This one is pretty straight forward, for there are plenty of substitutes in the food industry. Most large food companies offer similar suites of services. Companies focusing on niche areas usually have a competitive advantage, but this advantage depends entirely on the size of the niche and on whether there are any barriers preventing other firms from entering. 3. Bargaining Power of Buyers The individual doesn't pose much of a threat to the food industry. Large clients have a lotmore bargaining power with food companies. Large corporate clients like airlines andretailers pay millions of dollars a year. There are large numbers of distributors, who are buying and distributing the product, so their bargaining power is low and company haveleverage to dictate implement its terms and conditions to distributors. Backward Integration: Another reason of low bargaining power is that no buyer/distributor has the resources to start involve in backward integration. 23

4. Bargaining Power of Suppliers The suppliers of food might not pose a big threat, because of the reasons; a. Number of Suppliers: Raw milk is standard commodity and is available in the open market from a large number of milkmen. If anyone refuses to sell its product then company can buy it from others who are already willing to sell to company. b. Importance of volume to Supplier: Suppliers also have less leverage to bargain over price because the company is purchasing the large volume of their milk and suppliers dont have much option to sell milk to others. 5. Competitive Rivalry The food industry is becoming highly competitive. The difference between one Food Company and another is usually not that great. As a result, food industry has become more like a commodity an area in which the food company with the low cost structure, greater efficiency and better customer service will beat out competitors. In the long run, we're likely to see more consolidation in the food industry. Larger companies prefer to take over or merge with other companies rather than spend the money to market and advertise to people. Not only local but attempts by cross border competitors or companies to gain stronger foot hold in each others domestic market boosts the intensity of rivalry, especially when the foreign rivals have lower cost or very attractive products. In case of Engro foods so far nestle and hale are the only diverse rival and another players that has just joined the UHT Milk sector is Goodmilk, no doubt the competition between Engro foods and Haleeb is quite intense both are engaged in consistent homework just to break and attract the customer towards each other but Goodmilk is adding to the competition between the sector.

3.2 Personal Selling in Engro Foods

23

Personal selling is face to face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions and purchase orders. This is the most effective form of promotion because it allows your approach to be tailored to the needs of an individual customer. Getting a sale is ultimately extremely important, but the process involves a lot more than this. It is about having a constructive dialogue with customers to listen to their needs, promote product & company benefits on an individual basis, answer any questions, resolve any problems and get their feedback before clinching a sale. Face-to-face, a sales person can build a relationship with the customerunderstanding their needs and feeding back this knowledge to the business to improve products, customer service standards, competitor knowledge etc. Employing a sales person is a costly exercise in the first instance, but it is one that will provide a pay back, usually within 1-2 years. As we know that mostly personal selling is used with business to business products and also for technical products. There is no need of a formal and costly personal selling team because it adds cost and decrease profits for FMCG manufacturers like Engro foods. The advertising media and promotional activities are sufficient for the sales of FMCG products. So being very wise Engro has its limited personal sales force and rely on other useful tools of selling their products.

3.3 Recruitment
The quality of organization human resources depends on the quality of its recruits. Recruitment is the process of finding and attracting of capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applicants form which new employees are selected. In companies like Engro foods the recruitment process is done by the HR department. Recruitment Policy of EFL EFL recruit employees through different ways like Internal movement

23

Online portal News paper Ads Walk ins & write ins Customize Hunting

1. Internal Movement HR department become involved when internal job opening are publicized to employees through Job posting programs, which inform employees about opening and required qualification and invite qualified employees to apply. The internal movement recruits includes Job posting programs Departing Employees

In departing employees, EFL uses two techniques either buybacks and through out bit. 2. Online Portal Now today no body thinks anything without internet. EFL advertise on internet. EFL use online portal for the recruitment. The EFL advertise their jobs on rozi.com. 3. Walk-ins and Write-ins Walk-ins are job seekers who arrive at the HR department in search of a job, Writs-ins are those who send a written inquiry. In EFL, Both groups normally are asked to complete an application blank to determine their interest and abilities. Usable application are kept in an active file until a suitable opening occurs or until and application is too old to be considered valid, usually six months. 4. Customize Hunting EFL prefer foreign qualifier and students of LUMS.

23

Selection Procedure in EFL

The selection procedure of EFL consists on 7 steps. Test (aptitude) Interview (3to 7) Medical Evaluation Reference and Background check Offer Placement

De-recruitment of EFL
EFL do not de-recruit because our business is started newly and it only recruits new employees for the expansion of our business.

Motivation Plan of EFL

For the motivation of our employees, EFL uses both the monetary and non-monetary motivational tools to motivate their employees. EFL recently conduct the annual prize award function at Karachi in which they give the achievement awards to their employees and motivate them to work hard. EFL also gave provident funds, yearly bonus and medical facilities.

23

CV acceptance

Qualification

Written Test

If Qualified

RJP

Demand generation by respective department

Experience

3rd Interview

2nd Interview

1st Interview

Paned interview with G.M

By Manager of Respective Department

By HR Manager

Final Selection

Joining

23

Rewards/ Remuneration
The compensation programme of EFL consists on two parts. Salary Incentives Salary The salary consists on following components. 1. Basic Salary 2. Home Rent Allowance (45% of Basic Pay) 3.Utilities (10% of B.P) 4. Conveyance Allowance (10% of B.P) 5. Supplementary Pay (23% of Basic Pay). The supplementary pay is special pay given by EFL to its employees. Incentives/Allowances EFL gives incentives to the employees of the field. Field based get incentive on the performance basis. Greater the performance greater the incentives for the employees. The second thing is the allowance, which are given to office based employees. The allowances are fixed from grade 11 to 19 it is Rs.3000 and fro grade 20 and up it is Rs.8000. Benefits of EFL EFL gives the following benefits to its employees. Provident Fund (10% of gross basic pay) Gratuity (10% of gross basic pay) VPP (variable pay plan) (10% of gross basic pay) paid on yearly basis. Compensation cars Field cars + bike OPD cover Medical Hospitalization cover (50% by employees + 50% by EFL) Life Insurance ( 50% premium by employees + 50% by company) Death Benefits (12% of basic salaries) House Rent(4 gross salaries) Out breaks 23

Employees Benefits after Retirement EFL is a private organization, so it not provides all benefits as provide by Govt. EFL provides following benefits after retirement to its employees. Final settlements Provident Fund (10% of basic pay) Gratuity Pension

Sales Territory Management

Sales territory is the configuration of current and potential accounts for which responsibility has been assigned to a particular sales representative. Territory management includes planning, implementation, and control of salespersons activities with the goal of realizing the sales and profit potential of their assigned territories. Sales Territory Design of EFL EFL has two dairy processing plants that are situated at Sukkur & Sahiwal. The head office of Engro Foods is located at Karachi. There regional head offices are Karachi Lahore Multan Rawalpindi Peshawar Gujranwala

23

Each region includes many cities. For example the Multan region includes Multan city, khanawal, Sahiwal, pakpattan, arifwala, bhawalngar etc. In each city they establish a distribution and retailer network. A territory sales officer is attached with a distribution center. An ASM (area sales manager) monitor the sales of each city. A DSM monitors the working of the three ASM. EFL establish its territories on the bases of geography and on the bases of the workload.

3.4 Forecasting in Engro Foods

In simple words forecasting is predicting future. It is the most important issue for every organization to predict the future demand and preferences of the customer to retain current customers and acquire potential ones. Engro foods also use many techniques of forecasting and some of them are discussed here Survey technique This technique is most appropriate for the launching of new product or entering in a new target market. When Engro foods want to launch a new product then a market survey is conducted and opinion of the potential customers is obtained. This sampling is then applied to the whole segment. If there is any need of change in the product then survey is very helpful tool for the making product better and forecast the customer response, preferences and demand. Time series forecasting This is also an important forecasting method used by Engro foods. This forecasting method is used for identifying demand of existing product in future. Engro food s uses this technique to forecast the demand of its FMCG products on the basis of past years sales. If there is gradual increase in the sales then the company has to use same marketing techniques and plan to product more than the previous year, but if there is gradual decrease in past years then the company has to make changing in marketing techniques to increase the sales of company.

Prediction market 23

Engro foods also use a method of predicting the market. Customer preferences are also predicted and planning is done according to changing trends of market. If there is downfall then the strategies are made to boost the sales of Engro products. Observational research: To observe the people in different settings, this helps them to identify in-store opportunities and shelf-space that can be used. They often employ the method of monitoring. Focus groups Where they interviewed a diverse set of people to explore ideas about the brand and what more they want in the food sector to be available to people. Once all the information has been collected, it is further analyzed to extract findings from the data. The researchers use different types of statistical methods such as frequency distribution, the number of people buying the brand, average and measures of dispersions for major variables. So these are main methods of forecasting used by Engro foods. Engro foods do not rely on a single forecasting method. A combination of two or more techniques is used to get better results.

3.5 Evaluation of Sales Performance

Performance Evaluation is the process by which organization evaluate individual job performance. When it is done correctly, employees, their supervisors, the HP department, and ultimately the organization benefit by ensuring that individual efforts contribute to the strategic focus of the organization. Performance evaluation is about the employees performance and accountability. Uses of Performance Evaluation: It is used for the performance improvements, compensation adjustments, placement decision, training and development, staffing process deficiencies, information inaccuracies, job-design errors, Equal employment opportunities, External challenges and for the feedback to human resource.

23

In companies, performance evaluation is frequently carried out for administration or development intentions. In administration, the performance evaluation is called for when the decision on work conditions of employees, promotion, rewards/layoffs are in. In the development intention, the performance evaluation is oriented to the improvement of the work performance of employees, as well as to the enhancement of their capabilities on the ground of the adequate training programme and advising employees regarding behavior in the work environment. PADP in EFL In EFL, the performance evaluation is done on the basis of Performance Appraisal Development Process. It has two parts. 1. In the first part at the start of the year, the employees himself define the objectives for the whole year and then lock these objectives to his/her supervisor and then start doing work on that. 2. In the second part at the end of the year, the employees firstly define objectives for the next year and secondly performance evaluation is done by him before it present in front of supervisors. In EFL, Performance evaluations are usually done yearly and use a standard evaluation form. In the sales department, the evaluation of sales personnel is based the target achievement. These targets are based on weekly, monthly, quarterly, semi-annually and on the annually basis. They make the evaluation by conducting different performance test and observation; they evaluate sales personnel performance by reviewing the field, and also evaluate their performance through comparative Evaluation Approaches. The comparative appraisals are conducted by the ASM. They are useful for deciding about merit pay increase, promotion, and organizational rewards because they can result in a ranking of employees from best to worst.

23

4. Diagnosis and Alternatives

Following are the diagnosis and alternatives for EFL. The activities like customer satisfaction day should be performed on regular basis so the company should know the feedback and satisfaction level of customers regarding the product and the image of the company. EFL is not having its own dairy farms; it largely collects loose milk from farmers & Milk men through its milk collection centers, which sometimes is of low quality and impure because they add vegetable oil to milk to get higher prices. EFL needs to have their own Dairy Farm so that they can meet the increasing demand as their market share is growing annually & to have more quality milk procurement as well. EFL should have check on the performance of the distributor, because sometimes this negligence has led to huge problems in the delivery of many products in some areas of the city. The company should explore the market potential in a way, so that it can utilize its full capacity in order to gain economies of scale in the production. The company should also develop an integrated awareness plan in order to aware the people about the quality of the UHT milk as compared to other pasteurized or loose/fresh milk. Import and Export policies are changing rapidly in Pakistan this also affects the working on company, because import raw material and export products in other countries.

23

Competition is also increasing with the entrance of new domestic players in the dairy and food sector and plans to increase investments by the already established companies.

High technology is the basic requirement of dairy and food industry. The companies that are using latest technology have some cost benefits over the companies which are not using high technology. The key to survival for companies in this industry is using high technology for quality and cost purposes.

There is a vast market of bottled water Engro should focus on that as well.

5. Recommended Sales Strategies

Sales strategies are there to implement all the ideas to the business, for this purpose an organization must have all sales, market, company and customer knowledge. Engro has a full fledge sales department which is responsible to make sales strategies, no doubt they are working in a very well manner that in last fiscal year Engro has captured 30% share of Nestle foods in packed milk product. But according points: Engro recently has decreased the prices of raw milk obtained from milkman which causes dissatisfaction in them and they would move towards others, so first step is to satisfy their vendors. To some extent they are lacking in planning phase, as a bulk quantity is spoiled because of over producing and 23 to our recommendations for increasing sales they must follow the following

management has to incur cost on wastage of that, so proper planning and forecasting must be there. No discount is offered on the products they must offer discounts on the products which has short expiry date to save the cost of reprocessing.

References www.engro.com http:// html/Imran-Ahmad-Engro-Foods.pdf http://www.scribd.com/doc/54873209/Engro-Foods-SC

23