INTRODUCTION OF SERVIS SHOES

Servis group is well known for its consumer products and its contribution to diversified

industrial growth of the country. The group has its headquarter at Lahore, factories are

located at Gujrat and Muridke, Shekhupura road. Services Sales Corporation (SSC) is a

sister concern of serivs industries limited having its head office at SERVIS House, 2

Main Gulberg Lahore. Services Sales Corporation was formally registered in July

1964.The major activity of SSC is to market the shoes in domestic market manufactured

by the factories of service industries limited located at Gujrat and Muridke. In the

recent past, they are also selling the products manufactured by local purchasers who are

able to meet their quality standards. Imports of the shoes from overseas market and its

selling in overseas market are a new feature of business.

The company brand “Servis” is a household name in Pakistan. The company is also the

largest exporter of footwear from Pakistan and has maintained its No.1 position in

exports and has won FPCCI trophy for best export performance six times. Servis

footwear are available throughout Pakistan at fixed prices through a chain of 260 retail

stores and 14 wholesale depots run by SERVICE Industries Ltd. Company staff

provides excellent services to the consumers at these stores. In addition to the

company’s own retail stores, thousands of shoe dealers are selling Servis shoes in the

country.

1
 The main business of SSC is to purchase the shoes from SIL and local purchasers

and take the ownership after adding up its margin. The ownership includes costs

marketing of the shoes, logistics arrangements to circulate the shoes, management and

fixed assets costs.

SSC has its own marketing network and distribution network in the country. Sales

are carried out through wholesale and retail outlets, which are located in famous trade

centers in various cities and towns all over the country.

To meet the rising needs and demands, they purchase shoes on orders from other

local vendors. Sometimes these purchases are made to minimize per unit cost in case of

small orders. To deal with local vendors, SSC has three local purchase offices in the

country situated at Lahore, Faisalabad and Karachi. SSC is also responsible for

marketing and sales promotion activities. For this purpose, SSC uses various platforms

for sales promotional activities like advertising, incentive to staff and gift schemes for

consumers etc, etc.

Servis has been a trendsetter in footwear fashion in Pakistan. It introduced

colorful Joggers for the first time in Pakistan in early eighties. Its CHEETAH brand

shoes are very popular for sports as well as for casual wear, DON CARLOS brand

shoes reflect latest fashion trend in formal and casual wear. Products innovation has

been an important part of the company’s marketing strategy. New products range in

offered twice a year, at the beginning of summer and winter seasons.

2
 SERVICE GROUP OF INDUSTIES

Service Group consists of nine companies of various kinds and sizes. Three companies

are public limited and six are private limited. In other words service industries limited is

the main concern and others are its associated companies. The word “Servis” is the

brand name of the SIL while the word “Service” is the registered name of the company.

SIL is one of the major shoe manufacturing companies in Pakistan and it is a profit

oriented and customers oriented organization. The associated companies are situated in

various parts of the country having distinct activities from each other. These companies

may or may not have a direct link with their parent company the detail of the companies

are;

Public Limited Companies:

1. Service industries limited.

2. Dar es Salaam Textile Mills limited.

3. Hilal Tanneries limited.

3
Private Limited Companies:

1. Service Sales Corporation (pvt.) limited.

2. Borjan (pvt.) limited.

3. Millat Hides and Skins Company (pvt.) limited.

4. Shahid Arif Investment (pvt.) Limited.

5. Service Pakistan (pvt.) Limited.

6. Exhibits (pvt.) Limited.

HISTORY OF THE ORGANIZATION

Service Industries limited is a public limited company. It was incorporated in 1969

under the companies ACT 1913. It was originally started as a partnership firm just

before independence. In 1960 it was made a private limited company and after enjoying

nine years in that status, converted into Public Limited Company.

The industry became into existence due to the initiatives and efforts of three

young friends graduated from the college. The young men names

1. CH: Nazar Mohammad

2. CH. Mohammad Hussain

3. CH. Muhammad Saeed.

4
 First two was from Gujrat and the last one was from the Gujranwala. They started

business in 1941 at a small scale in Lahore. At that time, they were only manufacturing

handbags and some other sports goods. Within years, their business flourished and they

were making supplies of their products in every corner of India at the time to partition.

Almost all the departmental stores at Bombay, Madras, Calcutta, Lahore and Karachi

were selling their products.

In the beginning of 1954 they installed a shoes manufacturing plant at Industrial

Area Gulberg Lahore, which started production in the same year. The industry started

manufacturing shoes of various designs and qualities and come into the market with a

rising demand. The firm also succeeded to get some contracts from Army and Police.

After a few years of its existence, the production of the company was boosted up to a

marketable level.

Gujrat factory

Due to certain reasons, management decided to shift the factory from Lahore to Gujrat.

A tannery unit named “Hilal Tanneries” had already been established in Gujrat to

provide export quality leather for shoes factory. The new modernized shoe factory at

Gujrat started production in 1964. The name “Servis” started winning trust of the

people very soon. New and modern machines were imported from time to time and

employment opportunities were also created for poor people of the Gujrat.

5
Muridke factory

To meet the increasing needs of domestic and international markets, SIL installed a new

well equipped plant at Muridke, which started production in 1989. The famous brand

“Don Carlos” shoes are also manufactured in this factory.

The two factories are producing the following products.

1. All categories of leather footwear and sports shoes.

2. Canvas shoes of men, women and children.

3. Rubber sandals and slippers.

4. Safety shoes and footwear for defense force.

5. Bicycle tyres and tubes.

6. Car tyres and tubes.

7. Motorcycle tyres and tubes.

Local markets

To cover domestic market, SSC has its own distribution channel. Within the country

SSC has 260 retail outlets (including 25 agencies) and 14 wholesale depots, which

supply the products to ultimate consumers. SSC also has the district managers to control

retail outlets and regional sales manager to control wholesale depots.

6
Export market

SIL started export of shoes in the year 1962. Due to excellent quality and largest

exporter of footwear, the company was awarded the Presidential Exports Trophy in

1968. SIL exports its products to different countries like United Kingdom, Germany,

Netherlands, Sweden and Italy etc. etc. Chamber of Commerce and Industry awarded

Pride of Performance Trophy in 1977 to acknowledge the services provided by SIL to

the nation.

Market share and present status

SIL has got the following % age of market share

COMPANY SHARE (%)

Servis 5%

Bata 6%

Cottage and Small Scale Industry 89%

7
Major competitors

1. Bata

2. Hush puppies

3. Root

4. MHH shoes

5. English shoes

6. Starlet

7. Nike.

8. Slazenger.

STRATEGIC DIRECTIONS OF THE COMPANY

Mission Statement

“Service Sales Corporation will

---- Be a dynamic, innovative and growth oriented company, with a focus on

delivering value to shareholders and business associates.

---- Nurture its relationship with suppliers and customers by being fair in its business

and by providing the best quality and service.

8
 -----Build brand for customers of all age groups and become the No.1 retailer in

Pakistan by 2005.

-----Train and motivate its employees and develop a culture where performance will be

measured and rewarded.

---- Strive to be a good corporate citizen and fulfill its social responsibilities.

Company’s objectives

Objective is needed in every area where performance and results directly and vitally

affect the survival and prosperity of the business. SSC being a performance and result

oriented company also has certain objectives, which are listed below

 -------- To have a good share in the market.

 -------- To satisfy the customers by providing latest styles and designs.

 -------- To give the customers better service and guarantee facilities.

 -------- To provide shoes of better quality suitable to all sizes and have lowest

prices than ever before.

 -------- To be ahead of its competitors.

 -------- To make optimum use of its physical and natural resources to increase

productivity.

9
 MARKETING STRATEGIES OF SERVIS

We begin our marketing journey of SSC with Product, the first and most basic marketing

consideration. Product is a key element in the market offering. Marketing-mix planning begins

with formulating an offering to meet target customer’s needs or wants.

According to kotler:

“The best way to hold customers is to constantly begins out how to

give them more for less”

Definition:

“Any thing that can be offered to market for attention, acquisition,

use, or consumption that might satisfy a want or need. It includes physical

goods, services, experiences, events, persons, places, properties,

organizations, information and ideas”

10
 PRODUCT STRATEGIES

OF

SSC (SERVICE SALES CORPORATION)

11
PRODUCT MIX

SSC has been trend setter in boot wear fashion in Pakistan. Diverse range of its boots is

well known for the latest styles and designs. The company is constantly introducing

fashionable boot wear to increase its customer base and to be head of competitors.

Shoe categories

1. Gents

2. Ladies

3. Youth

4. Boys

5. Girls

6. Children

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Brand family

These product range are offered with following brand names

13
Shoe types

Ssc offers following types of shoes for its product ranges.

1. Leather shoes

2. Leather moccasins

3. Leather sandals

4. Leather awami chapels

5. Canvas shoes

6. Joggers (rubber leather)

7. Foot ball shoes

14
8. Squash shoes& other sports shoes

9. Hawaii chapels

10. Pvc chapels

11. Eva

12. School shoes

13. Leather coat shoes

14. Leather pumpies

Product-mix-dimensions

Gents

Product mix - width

15
Sports Shoe Chappals Sandals Canvas Hawai

shoes moccasins
Cheetah- Safety boot Calza - inj Don carlos - Skooz - Servis

250 250 01 Rainbow - 175

Cheetah- Don Carlos- Calza - Servis flr -15 Servis - Servis Rani -

Air6 56 plus 03 65
Cheetah- Don Carlos Calza- Calza - 304 Servis - Servis Rani -

Air vent – 557 super 4 79

Cheetah- Don Carlos Calza- Lite walk Servis - Servis Rani

club – flayer 5 -78

1
Cheetah- Don Carlos Servis-rdr Don carlos - Servis - 6 Servis Sahal -

201 -552 260 75

Cheetah- Duke - 8 Aerosoft-2 Don Carlos-

28 102
Cheetah- Safety boot - Aero soft- Don Carlos-

202 975 3 104

Cheetah- Duke- 9 Calza - Don Carlos-

32 102 150
Cheetah- 45 Duke -7 Calza-106 Don Carlos-

151
Cricket - Duke -6 Calza- 108 Don Carlos-

01 152
Football Duke -55 Calza- 151 Don Carlos-

star2 602

16
 Ladies

Product mix - width

Sports Shoe Chappals Canvas Eva Hawai

shoes moccasins
Steffe-20 Crystal Nina- 3 BS – 4 Servis Phool-65

lites
School malt Servis - spr Dsg – 7 Servis -

lites
Court shoes Servis spr Servis 101

-2
Lady opkan Servis spr - Servis 102

3
Liza

Youth

Product mix - width

17
Sports Shoe Chappals Sandals Canvas Hawai

shoes moccasins
Champ - 7 Skooz - 302 Servis flr Servis flr – Skooz_ 1 Star

16
Champ – 8 Claza -26 Don carlos

Champ – 14 Calza - 27
Cheetah -

05

Boys

Product mix - width

Sports Shoe Chappals Sandals Canvas Hawai

shoes moccasins
Champ - 7 Skooz - 302 Safari - 02 Servis flr – Skooz_ 1 Star

16
Champ – 8 Toz Act - 1 Toz Bsg

Champ – 14 School Mate Calza - 27 Ysg

Cheetah - Skooz Act

05

Girls

Product mix - width

18
Sports Shoe Chappals Sandals Canvas Hawai

shoes moccasins
Steffe Skooz - 302 Lindy Servis flr – Skooz_ 1 Star

16
Servis Nina

combo Servis

Children

Product mix - width

Sports Shoe Chappals Sandals Canvas Hawai

shoes moccasins
Champ Skooz - 302 Safari Toz- tel Skooz_ 1 Star

Hammel Toz Toz –z

Mate Servis

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 PRODUCT MIX ANALYSIS

Target market

Servis is basically a mass marketer, its products caters needs of every

consumer. However they claim to be specialist in gents foot wear with Don Carlos; and

duke and most powerful brand cheetah.

Functional level strategy

In production Department Company is using strategy of “ experience

curve” so it’s providing good quality at reasonable prices.

Product variations

Servis introduces two collections every year, introducing new design

every time.

 Summer sensation (march -august)

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 Winter range( September- February)

Winter is hot season for sale; average price is high in this season.

Avg. price = Total sales value/Number of Unit sold

PRODUCT QUALITY

SSC executive claims “We satisfy customers by providing quality and reasonable

priced foot wear through out the country”.

They believe in giving maximum value to customers. They say that

their prices justify quality .SSC is an ISO-9000 certified company. It is a clear proof

that company follow international standards of quality control.

Servis follows “high value price Quality strategy” with the aim of providing high

quality in medium price not in high price.

21
 Due to superior quality of its shoes SSC is the largest exporter

of foot wear from Pakistan and has maintained its no.1 position in Pakistan in exports

and has won FPCCIt trophy for best export performance 6 times.

All the machinery use at Gujarat and murid ke factory has been imported from China

and Koria.More over they also import soles, mould and plastic from China and

Korea .Local suppliers of raw material are ICI and angero. They get pure leather and

synthetic leather from ternaries of Lahore and Sialkot.

So in short there is no compromise over quality. They made

complete screening of shoes once they come factory and then these are certified to be

sold. So due to these control measures product return rate is very little (it is less than

1%).

PRODUCT DESIGN

One of the hall marks of SSc foot wear is the individuality and uniqueness in the

designs offer. In today’s competitive environment, innovation in product design is very

crucial to stay in market.

SSc has realized this fact and has a very dynamic design development

department. It is due to the efforts of this department, that SSc offers unique items

thrice a year. SSc keeps a close eye on competitors design. They follow reverse

engineering technique to offer better design than their competitors.

22
 SSc follows competitive strategy of product development. The

company is introducing new designs and styles in the market to increase its customer

base and to be ahead of competitors .Over past few months the company has introduce

four new design in the cheetah brand.

PRODUCT FEATURES

Durability

SSc’s shoes are recognized as most durable. They always complete their expected

operating life. That’s why servis have won loyal customers.

Reliability

SSc maintains quality of the shoes in every case because he realizes that now the

customers go for the quality products.

Conformance Quality

SSc shoes have high conformance quality. Buyers get the identical design ,quality and

price at all outlets of SSc . It plays a very important role in gaining confidence of

buyers.

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Performance Quality

All the servis brands are made to provide primary shoe features in full as well as

something extra. They are comfortable, stylish, and smooth and adds to one’s

personality.

PRODUCT POSITIONING

Product positioning means developing the image that a product projects in relation to

competitive products. Managements ability to bring attention to a product and to

differentiate it in a favorable way from similar products goes a long a way toward

determining that’s products revenue

Positioning in relation to competitors

The competitors of the Servis in Pakistan are following.

1. Bata

2. Hush puppies

3. Root

4. Mhh shoes

5. English shoes

6. Starlet

7. Nike

24
8. Slazenger

The Servis main competitors are Bata and starlet. however Bata, starlet

and Servis all have to face tough competition from the local manufacturers like Ehsan,

Milli, and Stylo. Bata, starlet and Servis are the only three merchandise unit in Pakistan

so they have give sales tax 15%.On the other hand cottage industry is exempted from

the this tax in spite of the fact that cottage industry has huge market share. So due to

this wide spread evasion in organized sector, the product of Bata starlet and Servis are

costly as compare to local product.

Positioning relation to market share

Company Market Share

Bata 10%

Servis 8%

Cottage industry 82%

Positioning in relation to product class

25
 Servis is market leader in leather shoes as well as in joggers with its most famous

brands cheetah and don Carlos. Servis cheetah has highest market share in the joggers

segment and it is winning comfortably over its competitors.

They claim that they are ahead of Bata in this shoe type. However they

consider Bata is head of school shoe and ladies footwear with its brands Toufees &

Sandak. On the other hand in this shoe type servis brand Skooz , Toz & Liza are in

introduction stage ,however they hope to attract market within 2 or 3 years. Bata have

more variety, they have more imported brands like hush puppies King Streets & Wein

Brenner. Bata has an other edge over servis ,they have more variety in ladies shoes

.Now servis has also changed its strategy . Now NIKE shoes will be available at

selected outlets.

Competition for servis cheetah

As far as the competition for servis cheetah is concerned there are many local

as well as foreign rivals of this brand. The major competitor for ser vice cheetah is.

 Power (Bata)

 Slazenger

 Starlet

 Nike

26
 Dunlop

 Puma

 Adidas

 Reebok

 Local shoe manufacturers

 Fake imported brands etc.

Competitive advantages of Servis

The competitive advantage of cheetah is its brand name, low cost and its

quality .All these characteristics seem to give this brand a very sustainable competitive

advantage but when we analyzed its competitive advantages carefully we found that it

is at risk. The reason for this is that cost of manufacturing is very high.

Umbrella

Low High

High

Barriers
At risk

27
 Low

BRANDING STRATEGIES

Branding is major issue in product strategy. The most distinctive skill of professional

marketers is their ability to create, maintain product and enhance brands. Marketers say

that branding is “the art and corner stone of marketing”

28
29
Brand name strategy:

SSc holds the image of “Home of Best Brands”. It follows the brand strategy of

separate family name complied with company product name.

Servis is umbrella brand under this brand there are certain other brands.

30
Brand Persona

Every brand has its own positioning strategy .Ssc builds up brand persona strategy for

each brand. Pricing, promotion, distribution and future product development follow

brand persona.

NAME MESSAGE PERSONA

It represents relatively

Liza Express yourself. young, active, and

educated women. Its also

for the use of middle class

family.
It conveys feeling of

Calza Full time aram. relaxation.

Cheetah No Parallel It represents young sports

men.
It represents men who act

Don Carlos The Don Carlos as opinion leader in foot

Experience wear fashion.

31
 Its designs and promotion

Skooz policies focuses on school

going children.
This represents stylish and

Toz comfortable range of

children shoes.

Brand strategy decision

An organization has to choose one of following strategies for branding the products.

Product category

Existing New

Line Brand

Extension Extension Existing

Multi New

Brands Brands
Brand name

New

32
Branding strategy of ssc has undergone a drastic change in the last year. Line extension

is now followed by Servis .Infect SSc executives say, “We have rationalized our

branding strategy with aim of having more recall rate and also enjoy certain cost

advantages in advertising and in positioning. So we have decided not to introduce new

brands for next 5 years for 6 years rather introduce new products in the existing brand

name.”

Process of choosing brand name

SSc has an advertising agency which performs this task. SSc conveys product features,

price & market segment of particular brand to agency and then that agency test these

names with target consumers. They use association tests and memory tests to research

more suitable names. Agency reports names to SSc and then final selection is made by

SSc marketing executives .SO SSc is fully conscious about brand name because they

say “it is the alone representative of product in market to attract consumers”

Brand equity

Brand equity refers to value of a brand, based on the extent to wide awareness,

perceived quality, strong brand associations, and other assets such as patient, trade

marks and channel relationships.

33
Brands vary in the amount of power and value they have in the market place. A brand

with strong brand equity is a very valuable asset .Ssc executives have realized this and

they do following things to build and maintain brand equity .

1: Superior customer servis at shop

2: Free giveaways with each shoe pair.

3: Mark down (up to 50%) on price at end of season

4: Socially responsible activities

5: Sponsor events.

6: Conduct heavily advertising in news TV, internet.

Ssc says that among their existing brands cheetah has highest brand equity. They argue

that stages in product life cycle also influence brand equity of a brand very strongly. So

the reason that the skooz & toz have low brand equity in comparison with Bata’s

Touffies is that they are in introductory stages. They hope that their equity will improve

as they jump from introductory to growing stage within 4 to 7 years.

34
 NEW PRODUCT DEVELOPMENT

Given the special changes in consumer tastes, technology and competitive advantage,

companies must develop a steady stream of new products. By new product we mean

original products, product improvements, product modifications, and new brands that

the firm develops that the firm develops through its own research and development.

Importance

SSc executives say “innovation is very necessary for growth so every year 30% - 4o%

new addition is made in our product profile and about 30% of sales come from new

products (introduced 2 years ago).”

35
 They say that no doubt innovation gets reward it also adds to uncertainty

and the job of marketers become tougher.

Average age of their product is 3years. After 3years, that product is replaced by new

item .however certain items are also maintained as classics keeping in mind their

demand.

SSc introduce new product twice a year; in summer and winter.

New product development strategy

A new product strategy is a statement identifying the role a new product is expected to

play in achieving corporate and marketing goals.

SSc New Product Strategy

Type of new product Name of item SSc goal

Service is king in ; To strengthen reputation

1: poly urethane (pu) as innovator.

Innovation Injected sole. it was firstly

introduced by SSc in

36
 Pakistan.

2: sports sandal

they bring in first to

market.

3:colorful joggers

They introduced them

first time in Pakistan in

early 80s.
30-40% product profile is To defend market share.

Replacement replaced each year with

new colors, designs.

Organizing for new products

For new product program to be success full, new products efforts are soundly

organized at SSc. there are two organizing bodies.

New product department

This department performs the whole process of new product development. This

department is equipped with young and skilled people who have constant eye on market

trends.

Selection committee

37
 New product department prepares a feasibility report of new item and present it to

selection committee. Selection committee includes executives from sales.Product

planning department. This committee either accepts or rejects proposal of department

after a critical market oriented screening of proposal.

Product development process

Guided by SSC’s new procedure strategy, a new product is developed through series

of six stages. So due to this structured development, SSC enjoys higher success rates

and shorter development periods.

38
Idea Generation

Ideas for new product are developed keeping in mind the needs of customers. SSC

introduced PU shoes considering customer’s strong desires for light weight shoes. SSC

conducts surety to explore unsatisfied wishes of customers regarding shoe type envy

need.

Idea Screening

SSC considers only Those ideas which pass screening stage.

Business Analysis

In this stage SSC new product committee estimates profitability, market

demand and costs and a product’s feasibility report is prepared.

39
Market Tests

Test marketing of new product is done on focus group.

Commercialization

SSC conducts proper launching of product assisted with heavy

advertising.

PRODUCT RETURNS AND WARRANTIES

SSC has a proper claim policy. Genuine complaints are happily invited. SSC offers free

repair of its shoes if fault is not on part of customer .The Shoe can be returned within

two month period if found defective.

PRICING STRATEGIES

OF

SSC (SERVICE SALES CORPORATION)

We continue our marketing journey with a look at a second major marketing - mix tool

pricing. According to one pricing expert “if effective product development, promotion

and distribution sow the seeds of business success, effective pricing is the harvest.

40
 Firms successful at the other marketing – mix activities, he continues can still fail

unless they can estimate some of the value they create in the prices they earn”.

Kotler comment on pricing as

“You don’t sell through price, you sell the price”

Definition:

“The amount of money charged for a product or a service, or the sum

of values that consumers exchange for benefits of having or using the

product or service.”

Price Setting

Price is the only element that produces revenue, all other channels represent cost.

A company’s pricing decision is effective by both internal & external factors

41
Price is a very critical marketing tool. Yet many companies don’t handle pricing very

well. SSc realizes the importance of this marketing tool and has devised a planned

procedure to determine price. It is handled by senior executive of marketing and sales

department.

42
 Price Quality Strategy

The firm must decide where to position its product on quality and price. There are nine

price qualities strategies.

SSc follows high-value price strategy with the aim of providing high quality in medium

price not in high price.

High Medium Low

Premium strategy High value strategy super value

strategy

Recharging Medium value strategy Good value

strategy strategy

Rip off strategy False Economy Economy strategy

strategy

High

Medium

43
Low

Pricing Objective

The company first decides where it wants to position its market offering the company

can pursue any one of following objective.

44
 Pricing objective of SSC is maximum market share. They say market for their

low price products is price sensitive; a small reduction in price stimulates market

growth

Pricing Method

Companies set a price by selecting a general pricing approach. There are three

approaches.

45
SSC follows mark up pricing but for recent years their price is market oriented. So we

can say they follow mark up pricing method, keeping in mind perceived value pricing

They claim

“Costing is price driven, price is not cost driven”

Cost Technique

SSC use Japanese technique of costing called “target costing”. They use market

research to establish a new product’s desired functions. Then they determine the price at

which the product will sell given its appeal and competitor’s price. They deduct desired

46
profit margin and this leaves target costing they must advise. Then they examine each

cost element design, engineering, manufacturing, sales. The objective is to being the

final cost projections into target cost range. If they can’t succeed, they may decide

against developing product. They sat that 80% of cost is stuck up in design and

development.

Elasticity of Demand

For products within rang of 500-600 & 250-300 demand is highly elastic .for high price

products demand is inelastic.

Price List:
Gents
Product mix - width

47
 Sports Price Shoe Pric Chapp Pri Sandals Pric Canv Price Hawai Price
shoes (RS.) mocc e als ce e as (RS.) (RS.)
asins (RS. (RS (RS.
) .) )
Cheetah 625/- Safet 820/ Calza 435 Don 950/ Skoo 150/- Servis 175
- 250 y - - inj /- carlos - z Rainbo
boot w
Cheetah 795/ Don 1299 Calza 475 Servis 299/ Servi 250/- Servis 75/-
- Air6 Carlo /- - plus /- flr - s Rani
s
- 556
Cheetah 1599 Don 1350 Calza- 299 Calza 550/ Servis 65/-
airvent / Carlo /- super /- - Sahal
s
- 557
Cheetah 950/- Don 1150 Calza 275 Lite 850/
- club Carlo /- - flayer /-/ walk -
s
-1
Cricket 625/- Duke 1250 Servis- 225 Docarlo 1099
- 01 -7 /- rdr /- s /-
- 260
Football 575/- Duke 1350 Aeroso 399 DonCarl 999/
star2 -8 /- ft /- os -
-2 - 102

Sports Price Shoe Price Chappal Pric Sandals Price Canva Pric Hawai
shoes (RS.) moccasin (RS.) s e (RS.) s e
s (RS. (RS.
) )
Cheetah 625/- Safety 820/- Calza 435/- Don 950/- Skooz 150/- Servis
- 250 boot - inj carlos Rainbow
Cheetah 795/ Don 1299/- Calza 475/- Servis flr 299/- Servis 250/- Servis
- Air6 Carlos - plus Rani
- 556
Cheetah 1599/ Don 1350/- Calza- 299/- Calza 550/- Servis
airvent Carlos super Sahal
- 557
Cheetah 950/- Don 1150/- Calza 275/- Lite walk 850/-
- club Carlos - flayer /
-1
Cricket 625/- Duke 1250/- Servis- 225/- Docarlos 1099/-

48
 - 01 -7 rdr - 260
Footbal 575/- Duke 1350/- Aerosoft 399/- DonCarlos 999/-
l -8 -2 - 102
star2

Price List

Product mix - width

Ladies

Sport Pric Shoe Pric Chappal Pric Ev Pric Canva Pric Hawa Pric

s e moccasin e s e a e s e i e

shoes (RS. s (RS. (RS. (RS. (RS. (RS.

) ) ) ) ) )
Steffe 450/- Crystal 350/- Nina 175/- LIt 199/- Bs- 4 250/- phool 65/-

e
School 275/- Servis 225/- Dsg 250/-

malt spr
Court 550/- Liza 199/- Servis 150/-

shoes
Lady 299/- Servis- 199/-

opken 1
Liza 350/-

49
 Price List

Youth

Product mix - width

Sports Pric Shoe Pric Chappal Pric Sandal Pric Canva Pric Haw Pric

shoes e moccasi e s e s e s e ai e

(RS. ns (RS. (RS. (RS. (RS. (RS.

) ) ) ) ) )
Champ 399/ Skooz 275/ Servis 235/ Don 399/ Skooz 135/ star 45/-

- - flr - carlos - -
Cheeta 775/ Duke 499/ Calza 375/ Flr 265/ servis 225/ Sahal 75/-

h - - - - -

50
 Children

Product mix - width

Sports Pric Shoe Pric Chappal Pric Sandal Pric Canva Pric

shoes e moccasin e s e s e s e

(RS. s (RS. (RS. (RS. (RS.

) ) ) ) )
Champ 399/- Skooz 275/- Servis flr 235/- Toz 199/- Csg 199/-

Cheetah 775/- Hammel 499/- Hp 250/- Flr 165/- servis 225/-

Hp 299/- Toz 150/- Toz 175

Malt 225/- Safari 180/-

Price discounts and allowance

Most companies adjust their basic price to reward customers for certain responses,

such as early payments of bills, volume purchases and off season buying.

Discount

A discount is a straight reduction in price on purchases during a stated period of time.

Cash Discount

A cash discount is a price reduction on to buyers who pay their bills promptly.

51
Quantity Discount

A quantity discount is a price reduction who buys large volume.

Functional Discount

These are offered by manufactures to trade channel members.

Seasonal Discounts

It is offered to buyers who buy off the season.

SSC’s Discount Policy

There is no cash discount since most payments are on the counter at time of purchase

in cash. However other discounts are offered.

Mark Down

52
 There is “Mark down” in prices on buying at end of seasons. This is

usually up to 50%. Recently for there summer sensation, they offered Mark down of

50%. This campaign was named “traffic jam sale”.

Functional Discounts

A discount of 16% is being offered to whole sellers and retailers.

Price Variation

There is stability in price. There is change once a year, they follow same price in all

outlets ignoring their geographical locations. No doubt a higher transportation cost is

involved in far of outlets but they believe in providing uniform price image.

Promotional Pricing

It is a technique of temporarily pricing products below its price and some time even

below cost, to increase short run sales. Some techniques are as follows.

• Loss leader pricing

• Special even pricing

• Cash rebates

53
 • Low interest financing

• Longer payment terms

In case of special events “Back to school” & “Eid” SSc don’t touch price. They add

value through new designs & gifts.

Psychological Pricing

A pricing approach that considers the psychology of customers & not simply the

economics; the price is used to say some thing about product.

They follow odd ending tactics. They believe it communicates low price image instead

of high pricing image. More over it coveys the notion of discount or bargain .So in end

it increase customer satisfaction at seller’s no additional cost.

Reaction on competitor price change

SSC believe in providing quality products to its customers. They never compromise on

quality. In case of competitors low price they maintain price and add value to attract

customers.

Reaction on high cost

54
In case of high cost they raise price because they think it is better to raise price instead

of using less expensive material.

Price Comparison

SSC are neither low nor high in comparison with competitors price rather they are in

line with the price of competitors like Bata ,starlet etc.

PLACE STRATEGIES

OF

SSC (SERVICE SALES CORPORATION)

55
We arrive at third marketing mix tool distribution involving the placement efforts of the

organization “place stands for the various activities the company undertakes to make the

product accessible & available to target customers”.

Firms rarely work alone in bringing value to customers. Instead, most are only a single

link in a larger supply claim. As such a single firm’s success depends not on just how

well it performs but also on how well its entire distribution channel competes with

competitors’ channel.

NATURE OF DISTRIBUTION CHANNELS

“A distribution channel is a set of independent organizations involved in the

process of making a product or service available for use or consumption by the

consumer or business user.”

Why do producers give some of their selling job to intermediaries? The use of

intermediaries results from their greater efficiency in making goods available to target

market. Following figure shows how using intermediaries can provide economies.

Part A shows three manufactures each using direct marketing to reach three customers.

This system requires three different contacts. Part B shows the three manufacturers

working through one-distributor who contacts the three customers. This system requires

only six contacts.

56
 NO. OF CHANNEL LEVELS

The distribution channel used by the Servis Sales Corporation to reach its target customers and

wide diffusion of its products can be well described by the no of channels involved. Each layer of

57
marketing intermediaries that perform some work in bringing the product and its owner ship closer

to the final buyer is a channel level. The following two channel levels are used by SSC.

Direct marketing channel

Under direct marketing channel there is no intermediary involved. It consists of a

company selling direct to the customers. This channel level is used but SSC only for the

sale of shoes to specific organizations like army etc. It does not sell directly to the

customers.

Indirect marketing channel

A marketing channel having one or more intermediaries is called indirect marketing

channel. SSC sells shoes to its customers by using by the following indirect channel.

Producer ------ Retailer--------- Customers

There is no mark up pricing by the wholesaler and retailer. Trade discount offered is

16%.

DISTRIBUTION OF OUTLETS

For retailing purposes the country has been divided into three regions.

 North

58
 Central

 South

Presently there are about 260 shops in these three regions. There are also agencies for

retailing purposes and dealership is provided in retailing. There are 11 districts in 3

regions.

Region Districts No of outlets

Peshawar 15

NORTH Rawalpindi 26

Gujranwala 32

Sergodha 23

Lahore- 1 18

Lahore-2 23

WEST Faisalabad 26

Sahiwal 23

Multan 25

Sukker 19

SOUTH Karachi 27

59
 SHOP TYPES & TARGETS

T
he retail shops are opened in 12 categories. The standard of shops is examined

according to the annual sales by these shops. The ST standard is given according

to following criterion:

Shops Annual sales (in RS)

ST-4 12 - million

ST-5 20 million

ST-6 20-30 million

ST-7 30-40 million

ST-8 40-55 million

ST-9 55-85 million

ST-10 85-150 million

ST-11 150-250 million

ST-12 250 & above million

SHOP PROMOTION

60
Standards of shops are changed because of change in sales of shops, for example of business

of .ST- 6 increased and value of its sales is between 30-40 millions. Then its standard is also

changed and it becomes ST-7 shop. So the shops are promoted to a big type on achievement of

sales volume. Target means the sales volume of the shops on the yearly basis.

OPENING A NEW OUTLET

The main consideration in opening any out let is to make sure that its easily accessible

by the target customers and sales potential is also available. Survey is done to find the

sales potential in a particular area. Every effort is made to make the shops attractive and

the customers comfortable for their selves.

CO-ORDINATION AMONG THE OUTLETS

There is complete co-ordination among outlets. Same prices are prevailing at each out

let. Inter transfer of stocks also take place among different shops.

REGIONAL OFFICE

Servis has three regions in Pakistan. Main office of Servis is in Lahore, which is Servis

Sales Corporation (SSC).

61
But in every region Servis Sales Corporation has regional office and regional manager.

We have visited central regional office Lahore. Then every region is further divided

into districts. This regional office covers five districts.

1- Lahore-1

2- Lahore-2

3- Faisalabad

4- Sahiwal

5- Multan

Reports from these districts are sent to regional office. Regional manager receives

following types of reports.

 Marketing reports

 Sales reports

 Shop feasibility report

 Monthly report

 Bills

 Reduction

62
In this monthly report, reports from all districts are included. District manager sends

sales of every district to regional office. In these reports last year sales of pairs,

estimated pairs and achievement pairs are written. Remarks of district manager are also

written in this report.

FUNCTIONS OF REGIONAL OFFICE

♦Regional office controls the function of officers, districts , and motivate the

employees

♦Opening a new shop is also the responsibility of regional office.

♦Evaluating market share of company.

♦Head office makes plans for shop and regional manager has to implement those plans

and reports to head office about the feed back of the plans

♦Regional office is bridge between head office and retail shops. Regional manager

does all functions related to retail.

♦In one region, there is only one regional manager. District managers are equal to the

districts in one region, then in one region 20 to 22 shops are there so 20 to 22 shops

managers are in one region.

♦In every shop 2 to 5 salesmen are there. No of salesmen depends upon the standard of

shop.

63
 ANALYSIS OF DISTRIBUTION STRATEGY

Servis Sales Corporation uses the following 2 strategies for distribution of products.

1- In distribution the company is using “exclusive distribution strategy”. In this

strategy the company has granted the sole rights to one retailer to serve a given area.

2- The company is using “competitive channel strategy” as a multiple channel strategy.

Two different channels distribute the same product. First channel is the direct channel &

second channel is indirect channel

PLANNING & DISTRIBUTION DEPARTMENT

Introduction

The planning & distribution department at the Servis Sales Corporation as the name suggests is

responsible from the initial preparation to the final positioning of the product of Servis

industries of shoes factories. The duties of P&D officer are listed below.

♦The P&D officer has to be well aware of diverse geographical layout especially the

type of articles of footwear preferred by the people off each region.

64
♦He should also be aware of the articles being produced by each factory, there exact

stock at various godowns as well as the different retail stores. He should know what

articles sell best or worst and what are the seasonal variations in the sale of specific

articles.

♦Further some, a certain amount of region is required to be able to predict the

salability or lack of various new articles being offered at various times, for it is the

planning officer who has to decide where to send a certain article and in what amounts.

Main functions

Planning and distribution department serves as a link between the factories and the

market

Planning functions

The first major phase in the working of P&D department is the planning phase. In this

stage it has to be decided how much articles and how many pairs of each article the

factory will be asked to produce. These proposals take into account the following

factors:

1- Every region is asked to submit there purposed sales for the coming month, this

data is taken into consideration in the decision of what articles to be produced. and how

many are to be produced.

65
2- Sales of each article for the current year and the previous year are considered.

3- Stock of all articles for the previous year and the current year is another important

consideration in the planning phase.

4- Next the department collects data so that it can know precisely what amount of

inventories of each article is present in the godowns and at retail stores.

5- After this the planning officer takes into account the proposed budget for the

month in question. The budget is prepared in advance for one whole year and is made

keeping in view all the respective categories of shoes.

6- The planning officer must also consider the capacity of the factory in question

because there is a limit to the amount of pairs that can be produced in factory in a

month.

7- The controller supplies sitting at the respective factories have incoming field

demands, which is an important factor in the planning stage.

8- Finally the planning officer must take into account any previous demands already

given to the factory for a particular article.

Once all this data has been collected the planning officer must evaluate it and reach the

decision regarding which article to produce for the coming months.

Distribution function

66
Once the planning phase is over, the production of all articles demanded starts at the SIL factories

located at Muridkay & Gujrat.

As soon as article production starts the planning and distribution department again comes into the

play. This time the responsibilities are the distribution of the articles to all the retail outlets in the

country.

The stock standards are the most important base upon which the planning officer makes his

distribution decisions. The stock standards for all shops are levels set by the management for each

shop keeping in view their historical sales figures, and are the yardstick by which article distribution

takes place.

The shop standards vary from 4 to 12 and are indicated as ST 4 to ST 12. The ST 4 shops have the

least sales and the ST 12 shops have the highest. The method of distribution adopted by the planning

officer is to first feed all shops in falling in ST 8 previews and above, after this the smaller shop

demands are met.

The 18 B pair shops are also sent regular supplies by these are not based on any demand sent by the B

pair shop managers. Instead it is based on how much actual material has to be relocated to B pair status

once production of an article has commenced.

SHOP VISITS

During my project I also visited main shops of Servis. The shops we visited were

1- Servis shoe store mall road Lahore.

2- Servis shoe store Anarkali Lahore.

67
3- Servis shoe store Liberty market, Gulberg Lahore.

Objectives Of Shop Visits:

The main objectives of the shop visit were to see

1- Average daily sale of the shop.

2- How the shop manager and sales man actually work.

3- How the sales persons deals with the customers.

4- What are the hot selling brands of Servis.

5- What difficulties do the shops face?

6- What advantages the shops have over their competitors.

7- Strong and weak points of the shop.

Servis Shoe Store The Mall Road Lahore

The Mall Road Shop is one of the oldest shops of the company. From the sales point of view it

has always contributed a large amount to the company. It falls under category ST-9.

Almost all the categories of shoe are sold at Mall Road Shop. Hot selling products are Calza,

Servis Cheetah, Liza and Don Carlos. Imported shoes from ENGLAND namely Clarks are also

displayed at shop.

Servis Shoe Store Anarkali

68
Anarkali is the busy and beautiful market of Lahore City. It has great potential of customers.

Anarkali shop is also a great contributor as far as sale is concerned. It’s situated in the center of

Anarkali bazaar. The shop is not very big. It falls under the category of ST 11. Average daily

sale is about Rs. 50,000 to 60,000. Its annual sales are 20-30 million.

Servis Shoes Store Liberty Market, Lahore

Liberty market in Gulberg is another beautiful market in Lahore City. Liberty market shop is

one of the beautiful shops of the SSS. This shop has been renovated recently and now it has

become the biggest sale outlet of Servis products. Its ST level is 11. Its average daily sales are

RS 60,000-65,000.

PROMOTIONAL STRATEGIES

OF

SSC (SERVICE SALES CORPORATION)

69
The fourth “P” of the marketing strategy of an organization is known as “Promotion”.

Promotion in whatever form it takes is an attempt to influence. More specifically,

promotion is the element in an organization’s marketing mix that serves to inform,

persuade and remind the market of a product and/or the organization selling it, in hopes

of influencing the recipient’s feelings, beliefs or behaviors.

PROMOTION MIX

P romotion mix consists of a specific blend of advertising, personal selling, sales

promotion, public relations and publicity tools that the company uses to pursue

it’s advertising and marketing objectives. So the promotional mix of an organization is

the head of following tools:

1)-Advertising

2)-Personal selling

3)-Sales Promotion

4)-Public Relations

5)-Publicity

THE MARKETING COMMUNITION MIX

70
The promotional mix of a company is also known as a company’s total marketing

communication mix. A modern company manages a complex marketing communication

system as shown in the figure, the company communicates with its intermediaries (retailers and

wholesalers), consumers of various publics. In turn the intermediaries communicate with their

consumers and publics. Consumers have word of mouth communication with each other and

with other publics. Meanwhile each group provides feedback to every other group.

PROMOTION MIX OF SERVICE SALES CORPORATION

(SSC)

Product planning, pricing and distribution are those marketing activities which are performed

mainly within the company. But in promotion activities the firm gets a chance to communicate

71
with its potential customers. SSC is responsible for marketing and promotional activities. For

the purpose, company uses different promotional tools.

ADVERTISING

“The best advertising is done by satisfied customers”

(Philip Kotler)

Advertising is defined as follows

“Advertising is any paid form of non-personal presentation and promotion of

ideas, goods or services by an identified sponsor”

Thus, all advertisements have four features:

1)-A verbal and/or visual message.

2)-A sponsor who is identified.

3)-Delivery through one or more media.

72
4)-Payment by the sponsor to the media carrying the message.

Advertising in one or other form is used by all organizations. Advertisers include

not only business firms but also museums, charitable organizations and government

agencies that direct messages to target public. SSC being a dynamic organization and

looking forward to be the no.1 retailer by the year 2005 is fully aware of the

indispensable role of advertising in the promotional mix of the organization.

Types of advertising

Following are the two types of advertising:

1)-Product Advertising

2)-Institutional Advertising

Product advertising

In product advertising, advertisers are informing or stimulating the market about

their products and services. This type of advertising is often adopted by service Sales

Corporation on various occasions. For instance when SSC introduces a new article in

the market, information is given to customers and prospects through magazines and

newspapers.

73
Institutional advertising

Institutional advertising presents information about the advertiser’s business or

tries to create a favorable attitude, build goodwill towards the organization. SSC also

adopts this type of advertising when it conveys through its messages congratulations to

the Pakistani people on various special events. For example on Eid Days,

Independence Day etc. which creates a good organizational attitude and builds

goodwill?

Developing an advertising programme

In developing a programme, marketing managers must always start by identifying

the target market and buyer motives then they can make five major decisions in

developing an advertising programme known as 5Ms.

 Mission

 Money

 Message

 Media

 Measurement

74
These decisions are summarized in the following figure:

75
 Message Decision

Message Strategy

Message Execution

Object setting Budget Decision Campaign Evaluation

Communication Objective Affordable Approach
Communication Impact
Sales Objective Percent of Sales
Sales Impact
Competitive Party

Objective and Task

Media Decision

Reach, Frequency, impact

Major Media Types

Media Timing

76
Setting advertising objectives

The first step is to set advertising objectives. These objectives should be based on past

decisions about the target market, positioning and marketing mix which defines the job

that advertising must do in the total marketing program.

“An advertising objective is a specific communication task to be accomplished

with a specific target audience during a specified period of time”.

Advertising objective can be classified according to whether their aim is to

inform, persuade or remind.

Informative advertising

Informative advertising is used heavily when introducing a new product category. In

this case the objective is to build primary demand. It also focuses on suggesting new

uses for a product.

Persuasive advertising

77
Persuasive advertising becomes more important as competition increases. Here the

company’s objective is to build selective demand.

Reminder advertising

Reminder advertising is important for mature products. It keeps consumers thinking

about the product.

Service follows all these three objectives at different times for different types of

products.

Setting the advertising budget

After determining its advertising objective the company next sets it’s advertising budget

for each product. Deciding how much to spend on advertising is one of the hardest

marketing decisions facing a company. Four methods are used to set the total budget

for advertising:

1) Affordable Method

2) Percentage of sales method

3) Competitive parity method

4) Objective and task method

78
Affordable method

Some companies use the affordable method. They set the promotion budget at the level

they think the company can afford. Small businesses often use this method reasoning

that the company cannot spend more on advertising than it has.

Percentage of sales method

Other companies use %age of current or forecasted sales or they budget a %age of the

unit sale price.

Competitive parity method

Still other companies use competitive parity method setting their promotion budgets to

match competitor’s outlays. They monitor competitors advertising or get industry

promotion spending estimates from publication or trade association and then set there

budgets based on the industry average.

Objective and task method

The most logical budget setting method is the objective and task method whereby the

company sets its promotion budget based on what is wants to accomplish with

promotion. This budgeting method entails:

79
1) Defining specific promotion objectives

2) Determining the tasks needed to achieve those objectives

3) Estimating the cost of performing these tasks.

Out of the above mentioned four methods, the one being followed by SSC is %age

of sales method. The amount spent on promotional budget is 3% of sales revenue.

Creating a message

Whatever the objective of an advertising campaign, the individual ads must accomplish

two things:

1)-Get and hold the attention of the intended audience.

2)-Influence that audience in a desired way.

Attention can be achieved in many ways. Television makes possible special effects.

Radio can use listener’s imagination to create mental images that would be impossible

to actually produce.

Execution is combining in a convincing, compatible way the feature or device that gets

attention with the appeal.

Selecting media

80
The media planner has to know the capacity of the major media types to deliver the

message. The major media types along with their costs, advantages and limitations

should be considered in selection of media.

Advertising media used by SSC radio

Advertising basically is a form of communication which involves giving messages to

customers to get the desired response from them. This is the era of information

technology and there is a host of mediums available to advertise a product. These

mediums include T.V., radio, newspapers, magazines, brochures, cable, internet etc.

Radio

With the rapid development of the country, people are diverting their attention more

towards T.V. as compared to radio. Even then a large no. of people especially of lower

and middle class, listen to radio regularly. SSC however spend a small amount on radio

advertisements.

Television

Television is the major source of entertainment in our country. As T.V represents both

audio and video impressions it provides a complete physical awareness of a product

81
during advertising. The main source of advertising for SSC is television. T.V. is the

most expensive medium and a major part of advertising budget is allocated to T.V.

Daily newspapers

Life has become so fast that no one can spare time to watch T.V or listen to radio

regularly. For such type of people daily newspaper is an important media which servis

has adopted. Advertising messages of SSC appear in a newspaper more frequently

because it’s much cheaper than T.V.

Magazines

Servis presents beautiful ads of its shoes in well reputed weekly or monthly magazines.

These magazines include both general and special types. Special types mean fashion

magazines, business magazines etc.

Brochures

SSC has published numerous brochures of different styles and with different models

these brochures are pasted at servis shops and are also given to dealers; non-dealers and

agents etc.

82
Newsletters

Quarterly newsletter is issued giving detail of the activities of the organization during

the given period.

Evaluating advertising effectiveness

Good planning and control of advertising depend on measures of advertising effectiveness.

Companies are generally interested in finding out whether they are overspending. In SSC

recall level of the customers is used as a tool to evaluate the effectiveness of the advertising

messages.

PERSONAL SELLING

The goal of all marketing efforts is to increase profitable sales by offering want

satisfaction to customers over long run. Personal selling, the personal communication

of information to persuade somebody to buy something, is by far the major promotional

method used to reach this goal.

“Personal presentation by the firm’s sales force for the purpose of making sales

and building customer relationship”

83
Merits of personal selling

Personal selling in the individual personal communication of information in

contrast to the mass, impersonal communication of advertising and other promotional

tools this means that personal selling is more flexible than these tools.

Also personal selling usually can be focused on individuals or firms that are

known to be prospective customers, thus minimizing wasted effort.

Scope of personal selling

In business situations there are two kinds of personal selling.

1)-Inside selling

2)-Outside selling

Inside selling primarily involves retail stores sales. In outside selling sales people

go to the customers.

SALES PROMOTION

S ales promotion is a key ingredient in marketing campaigns. It is one of the most

loosely used terms in the marketing vocabulary. It is defined as:

84
 “Sales Promotion consists of a diverse collection of incentive tools, mostly short

term, designed to stimulate quicker or greater purchase of particular products or

services by consumers or the trade”

Sales promotion tools

The tools available to stimulate a greater purchase of a product can be

 Consumer promotion tools

 Trade promotion tools

 Business and sales force promotion tools

SSC uses a successful blend of these promotional tools to boost up its sales volume

and maximization of profits.

85
Consumer promotion tools

A brief description of these tools follows

Coupons

Coupons are the certificates entitling the bearers to a stated saving on the purchase of a

specific product mailed, enclosed in other product or attached to them or inserted in

magazines and newspaper ads. Silver cards and star cards are schemes used by SSC

giving special price reductions to customers.

Service star card

The company launched the “Service Star Card Scheme” in May 2002 for its loyal

customers. Any customer becomes eligible for the membership of this card by

purchasing product(s) worth Rs. 1500 or more. The silent feature of the membership

was:

1)-10% discount on two purchases

2)-Lucky draw for four return air tickets for Dubai with fine star hotel stay.

86
 The lucky draw was arranged in a local hotel in Lahore on January 16, 2003 where

cricket star Abdur Razaq was chief guest and the name of the lucky winner was

announced.

Silver Star card

After the success of the star card scheme and upon the insistence of the star card

members an upgraded version of Star Card—Silver Star Card was launched. Only the

previous star card members can convert their ownership into Silver Star Card by

purchasing any products worth Rs. 1500 and get the following benefits:

1)-10% discount on three purchases

2)-Raffle draw with enhanced range of prices link 29 color T.V, CD player,

walkmans, scoot etc

This scheme was effective up to December 31, 2003 and raffle conducted on Jan 15,

2004.

However new customers will enroll in Star Card scheme after purchasing any products

worth Rs.1500 and enjoy the benefit as mentioned above.

87
 Product warranties

Product warranties are the explicit or implicit promises by sellers that the product will

perform as specified or that the seller will fix or refund the customer money during specified

periods.

Warranties to the service customers are offered in form of claims of shoes or repairs etc.

Free give aways

This involves free distribution of certain commodities with every purchase by the

consumers. The purchase of servis shoes by the customers is often accompanied by

stickers to schools children, tennis balls, key chins, lunch boxes, sweats and toffees,

geometry boxes, posters of cricketer’s etc.

Point of purchase displays and demonstrations

Point of purchase displays and demonstrations take place at the point of purchase or

sale. Servis is creating better POP material trying them with television or print

messages and setting them at their shops.

Trade promotion tools

Manufacturers use a number of trade promotion tools. Surprisingly a higher proportion

of the promotion pie is devoted to trade promotion tools than to consumer promotion

with media advertising capturing the remaining.

88
Price-off

A straight discount off the list price on each case purchased during a stated time

period. The offer encourages dealers to buy a quantity or carry a new item. Special

price offs are offered by servis offering up to 50% of discount.

Business and sales force promotion tools

These tools are used to gather business loads, impress and reward customers and

motivate the sales force to greater effort. Companies typically develop budgets for

early business promotion too that remain fairly constant from year to year.

Sales conference

Annual sales conferences are arranged by SSC in which important issues like stocks,

economical and profiling / brand management are highlighted. All district managers

give presentations regarding their performance, achievement and suggestions for their

respective districts.

Sales contests

A sales contest aims at inducing the sales force or dealers to increase their sales results

over a stated period with prizes going to those who succeed. The SSC has

89
institutionalized various awards in order to motivate and reward best performers and to

inculcate a competitive environment. These awards include:

 Annual Achievement Award.

 Employee or Salesman of the Quarter Award.

PUBLIC RELATIONS

Public relations is a management tool designed to favorably influence attitudes toward

an organization, it’s product and it’s policies. Not only must the company relate

constructively to customers, suppliers but it must also relate to a large number of

interested publics. A public is defined as follows:

“A public is any group that has an actual or potential interest in or impact on

a company’s ability to achieve its objectives. Public relations (PR) involve a

variety of programmes designed to promote or protect a co’s image or its

individual products.”

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 A public can facilitate or impede a company’s ability to achieve its objectives.

SSC is well aware of the important role of the publicity in its success matrix. It has

over time; build a favorable repute and a good name which is trusted by everyone in the

community.

PUBLICITY

Pblicity is a special form of public relations that involves news stories about an

organization or it’s products like advertising, it involves an impersonal message that

reduces mass audience through the media.

There are three means of gaining good publicity:

------Prepare a Story & Circulate it to Media

The intention is for selected newspapers, television station or other media to

report the information as news.

------Personal Communication with a Group

A press conference will draw media representatives if they feel the subject or

speaker has news value

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 ------One-to-One Personal Communication

Companies lobby legislators or other powerful people in an attempt to influence

there opinions and subsequently their decisions.

SOCIAL RESPONSIBILITY REVIEW

There are various actions of SSC which reflect on it’s social responsibility. In a

developing country like Pakistan, tax evasion is very common. But SSC pays full tax

(15%) and does not evade a single penny of taxes.

They give donations to “Milestone” for the care and treatment of physically

disable people. They sponsor the sports events like cricket cups, SAF games. Service

Sales Corporation Cricket Tournament is held every year.

Participation in international civil defense day

To promote awareness among the students regarding civil defense, the Federal

Defense Training School, Karachi arranged an event on 1st March as “International

Civil Defense Day 2007” Since it is a tradition of SSC to contribute towards social

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event and educational project, the company participated in the event wholeheartedly by

contributing for the arrangement of the event.

Sponsorship of school function

As part of the advertising campaign to inform the youth about new products, the

company sponsored 8th Annual Gala of Glory held on March 23, 2007 at siddique

Model School, Gulshan-e-Millet Korangi Karachi.

PROMOTION MIX STRATEGIES

Marketers can choose from two basic promotion mix strategies-push promotion or pull

promotion the relative emphases on the specific promotion tools differs from push and

pull strategies.

Push strategy

A push strategy involves “Pushing” the product through distribution channel to final

consumers. The producers direct its marketing activities toward channel members to

induce them to carry the product and to promote it to final consumers.

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Pull strategy

Using a pull strategy the producer directs its marketing activities towards final

consumers to induce them to buy the product. If the pull strategy is effective,

consumers will then demand the product from channel members, who will in turn

demand it from producers.

At SSC the mix of these two promotional strategies is as follows:

Pull Strategy------------65%

Push Strategy-----------35%.

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 PACKAGING

AT

SSC (SERVICE SALES CORPORATION)

Even after a product is developed and branded, strategies must be devised for other product

related aspects of marketing mix. One such product features, and critical on for physical

product is packaging many marketers have called the packaging is a fifth “p” along with the

price, product, place and promotion.

Definition

“Packaging consist of all the activities of designing and producing the

container or wrapper for a product”

Levels of packaging

The container is called the package and it includes three levels of material

1: Primary packaging.

2: Secondary packaging

3: Shipping packaging.

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e.g., blue lady perfume is in the bottle (primary packaging) that is in card box

(secondary packaging) that is in the container (shipping packaging) containing 6 dozen

bottles of blue lady perfume.

PACKAGING STRATEGIES OF SSC

Importance of packaging

SSc says, “Packaging is Mobile advertising of our shoes”. They use it as “Styling

Weapon”. They have made the boxes very colorful .There is separate shoe Bose for

each brand, with separate color scheme.

Packaging material

Primary packing: Decision about packaging

Secondary packaging: shoe box: (hard paper)

Shipping packaging: shopping bags (poly thin)

Source or material

For packaging purpose they don’t have their own plant .They have contract with packages for all levels

packaging material.

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Cost of packaging

Each shoe box costs from Rs.7 to Rs.15 depending upon size. This is 1% percentage of price. Each poly

thin bag costs Rs.1. SSc have also used paper bag in past which cost Rs.8.higher than the price of shoe

box. So due to such high cost they had to come back to poly thin bags.

Quality of packaging

SSC says “we are very conscious of quality and we don’t compromise it even in case of shoe box.

We conduct visual tests and engineering tests to ensure high quality.

In recent years we have improved printing and made our boxes more attractive

we has decided to change shoe box design, color scheme after every 3 years to give customers more

attraction.

Text of packaging

Each shoe box contains item number, shoe color &shoe size.

. More over brands name and brand message is also printed in very color full manner.

Each brand shoe box has its own color scheme.

Skooz: bright blue and yellow coloR

Cheetah: white and sharp red color.

Don carols: its shoe box is really very attractive its front side has a very beautiful design in different

shades of red color other sides of box are in colors of black and red.

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Liza: green, yellow& light green.

Labeling is another product feature

which requires managerial attention. “A label is the part of a product that carries information about the

product and the seller”

Types of labels:

Brand label: is simply the brand name applied to product

Descriptive label: gives information about the product’s use.

Grade label: identifies product graded quality.

Service shoe have all these types of labeling. Each shoes carry brand name, size, and price. More over

there is also a tag attached with each those carrying information about its use

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 SWOT ANALYSIS

OF

SSC (SERVICE SALES CORPORATION)

Strengths

♦Servis Cheetah has a very broad product line as compared to its competitors like

Power and Starlet.

♦The Cheetah brand is not very costly as compared to its quality. This is the major

reason for having highest market share in the industries. The products offered by

competitor like Nike and Slazenger are not only very costly but also they have no

guarantee facility. The products offered by Bata and star let is of low quality as

compare to Servis cheetah.

♦The cheetah brand has a very good name in the market and this is one of the major

strengths of the company.

♦The company is using latest technology of direct injected soles. In this technology, a

chemical is directly injected in soles to provide more durability.

♦The company is exporting majority of its products in UK and Germany.

♦Easy availability of its products all over the Pakistan.

♦Over 1200 employees.

♦SSC has its own retail outlets throughout the country.

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Weaknesses

♦The company is financially not very strong as compared to Bata and other foreign

competitors.

♦The company has only 2 factories in Pakistan. The company has to rely on local shoe

manufacturers to meet the demand because of which the quality is not consistent.

♦The distribution cost in some areas of Pakistan is very high because both the factories

are located in Punjab province and because of which the cost distribution is less and in

other provinces is high.

♦Employees are not motivated enough.

Opportunities

♦The company can increase the no of factories in Pakistan to meet the demand whole

by it self.

♦The company can also sell its expensive brands in Pakistan, which it exports.

♦The company can target new market segments in sports shoes like ladies, children,

and body builders.

♦86% of total shoe market is left.

♦Increase in exports to different countries.

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Threats

♦Foreign companies like Nike and Slazenger are doing aggressive marketing in

Pakistan and are increasing their market share.

♦The additional taxes by government are also threats for the company.

♦Smuggling of shoe from abroad.

♦Local manufacturers don’t have to pay taxes because of which their cost is low.

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 ANALYSIS THROUGH PORTER MODEL

OF

SSC (SERVICE SALES CORPORATION)

We have done the industry analysis by using Porter model. The shoe industry was

examined on the basis of following five forces in the environment.

1. Rivalry Among The Existing Firms

The strongest of the five competitive forces is usually the jockeying for position and

buyers favor that goes among rival firms. In case of cheetah there is intense rivalry

among the competing sellers due to the following factors:

Diverse Competitors

Attempts by cross border competitors to gain stronger footholds in each other’s

domestic market boost the intensity of rivalry, especially when foreign rivals have

lower costs or very attractive products. In case of Cheetah, so far Power by Bata is the

only close rival; no doubt that competition between both the companies is quite intense.

Both are engaged in consistent homework, just to break and attract each other

customers toward themselves.

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Customers Switching Cost

The lower the cost of switching, the easier it is for rival sellers to raid one another’s

customer. In case of Cheetah , customers switching cost is low due to availability of

different brands in the market and other fake brands of popular brands. If the brand that

they like to consume was not available at the spot, they would definitely ask for other

rival brands.

High Exit Barriers

Huge investment of financial, human and marketing resources is required to enter in

this business because of need for plants which can produce quality with consistency and

need for procurement at high level. After obtaining such plants it task years to recover

the fixed costs and to breakeven so rivalry tends to be more vigorous when it costs more

to get out of a business then to stay in and compete. Since Servis Cheetah is in the

market for years, so it’s not quite feasible for Servis to close its business or this brand

and jump into any other business. Thus, rivalry is strong, as the firm has to stay and

compete with existing rivals.

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Competitors Using Saving Schemes

Some times during special occasions, rivalry increase due to certain price cuts and

saving schemes to boost up their sales volume, which results in intense competition.

2. Potential entry of new competitors

New entrants to market bring new production capacity. Jogger is the commodity that is

used through the year. Moreover, the industry is attractive, so there are threats of

potential new entrants. But on the other side these threats are not intense due to high

entry barriers and existing conditions of economy.

Huge investment is required

The larger the total rupees investment and other resources needed to enter the market

successful, the more limited the pool of potential entrants production of branded joggers

required huge investment of financial, humane technical and marketing resources at the

moment servis has no threat of new entrants but in the future any foreign firm can be a

threat

Economy of scale

Scale economies deter entry because they force potential competitors either to enter on

a large scale basis (a costly and perhaps risky move) or to accept a cost disadvantage

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(and lower profitability) with out achieving the economy of scale its difficult to

compete in the market more over new entrants in the joggers business may encounter

scale related barrier not just in the production but also in advertising marketing

distribution financing and raw material availability

Cost disadvantages

Existing firms may have cost advantages not available to potential entrants in the

industry of branded shoes these advantages include access to good supply sources and

the benefits of learning and experience curves etc. since servis is in the market for a

long time servis would definitely have an advantage of such huge experience and

knowledge aspects

Brand preference

Once the brand image is formed then its difficult for any other firm to introduce new

brand into the market so unless and until it has low price and superior quality as in

branded shoes only few quality brands are available (servis, Bata, Nike etc). So people

will prefer these brands on the other newly introduced brands.

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Government regulatory policies

It’s an entry barrier because different licenses and permits are required from those

registered companies which want to deal in manufacturing business and especially on

national level.

3. Competitive pressure of substitute products

If we consider cheetah’s positioning than fake brands are the major threat even though

currently fake brands have been positioned for people from low income groups by in

the future some low priced brands for popular brands will be a definite threat.

4. Bargaining power of suppliers

This power of supplier is low because of following reasons.

Number of suppliers

There are large numbers of suppliers who supply shoes to company if any supplier

refuses to sell joggers to the company the company can find a new supplier very easily.

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Importance of volume to supplier

Supplier also has less leverage to bargain over price because the company is purchasing

in bulk and the suppliers don’t have much option either.

5. Bargaining power of buyer

No of buyers

As there is large number of distributors who are buying and distribution the products so

there bargaining power is low and company has leverage to dictate or implement its

terms and conditions on distributors.

Threats or back ward integration

An other reason of low bargaining power of buyers is that no buyer or distributor has

the resources to start or involve in back ward integration so company is enjoying the

bargaining leverage.

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 PEST ANALYSIS

OF

SSC (SERVICE SALES CORPORATION)

Political conditions

The political conditions are not very stable in the country but this does not directly

influence the trends and spending patterns of the customers there are no restrictions or

barriers on the growth of this industry so the political conditions are favor able for this

market.

Economical conditions

The economical conditions are not very favorable and the economy is facing problems

but its not directly influencing buying power of SSC‘s target market if the country is

out of its current problems it will further boast up the growth of this industry as people

will feel more secure economically and it will further increase the attractiveness of the

market.

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 Social conditions

These social patterns are changing in the country as the world is becoming a global

village and mutually share and accepted patterns people are becoming more attractive

towards the latest designed shoes its becoming fashion and young generation as well as

the children are getting more attractive towards this industry due to globalization the

competition for SSC has increased and a lot of foreign companies have entered the

market. These things will result in intense competition in the shoe industry in the near

future.

Technological Conditions

The technology patterns are changing day by day in the country as well as in the world

so therefore peoples are becoming more aware of every new and attractive thing very

soon and same is the case with the shoe industry because technology has also helped to

change the style of footwear. So SSC is also effected by the technological conditions

because of tough competition of new shoe industries with latest technologies. These

things will result in intense competition in the shoe industry in the near future.

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 RECOMMENDATIONS FOR SSC

 The company should focus on ladies variety. The company is not offering any

special joggers targeted towards females, in this way the company is missing a huge

segment of Pakistani population.

 The company should give special attention to children because if they make

children their brand loyal customers then this will have long term impact on the profits

of the company.

 The company is facing problem of supplying goods according to demand. Most of

the times there is shortage of products in shops. This problem should be solved

immediately because this can result in loosing customers to competitors.

 The staff of retail outlets should be trained properly and they should have

thorough knowledge about the product features.

 The company should not rely on the local shoe manufacturers to meet the demand

because the quality will not be consistent and company can loose customers by doing

this.

 The defect claims from customers should be settled earlier. Right now the

procedure of a replacement is lengthy. The shop manager should have authority to

change the defected pair on spot.

 The company should control the length of its distribution channel. The length of

distribution channel in Punjab is small and in other provinces is low because of which

the price is difficult to maintain throughout the country.

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 All the shops should be connected with computers.

 The company should try to get shelf spaces in big plazas and shops.

 SSC is concentrating on limited areas and not trying to explore new market for

their product.

 It’s a natural phenomenon of every trend to saturate after a while, so the company

should explore new ways and means to increase the customer’s base in different areas.

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