ABSTRACT:

Candyland is a business unit of Ismail Industries, which has been operating since 1989 in confectionery. Our report analyses how Candyland is currently operating in the market, with a primary focus on its international business and its marketing strategies. Moreover, this report also suggests a new product for the company so that it can further increase its market share globally. Key words: Candyland, strategies, confectionary

Confectionary Industry of Pakistan (Overview):

The Islamic Republic of Pakistan is a medium size, densely populated country with over 170 million people living there. It is located at Southern Asia, bordering the Arabian Sea, between India on the east and Iran and Afghanistan on the west and China in the north. Chocolate and Confectionery industry has shown a satisfactory progress in recent years. The industry flourished under tariff protection and it has not only saved foreign exchange which would otherwise have been spent on the imports of such products but has also started earning the much needed exchange to the country. The vast Middle East market is open for the sale of chocolate and confectionery and Pakistan has all the potentials to capture this market. Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low levels of foreign investment, and declining exports of manufactures. Faced with untenable budgetary deficits, high inflation, and hemorrhaging foreign exchange reserves. This has also negatively impacted the countrys image. International buyers get skeptic due to the mentioned reasons. Inflation remains one of the top concerns in the country, jumping from 7.7% in 2007 to 20.8% in 2008, primarily because of rising world fuel and commodity prices. Despite Pakistans confectionery industry has enjoyed an emerging and growing trend in the recent past yet its size and growth pattern has been far inconsequential compared to other countries of Asia-pacific region. The industry has grown with an average annual rate of 6.5 to 7.5 % during 2002-2008. Domestic brands dominate the market accounting for more than 85% of total value sales of the industry. The industry as a whole has been divided into two broader sectors namely branded segment and the generic segment. The branded segment is more of monopolistic in nature which has nine players competing in the industry, out of which Hilal has the biggest market share of 26%. A brief overview of major companies estimated annual sales in PKR (1 US$= 83 PKR). The branded confectionary market is very much price elastic and growing with the bulk sales concentrated in mid- price range products.

In Sugar Confectionery major running confectionery items fall into the retail price segment of Rs. 0.50-1.00. However Rs. 2 and 3 are popular price points for lolly pops and chocolates range. The industry has faced coin-barrier issue in sugar confectionery products at least three times during last three decades when all key players unanimously agreed to increase their products price due to escalating prices of raw materials (first from 25 paisa to 50 paisa- in mid 80s, than 50 paisa to Rs. 1 in mid 90s and lastly from Rs.1 to Rs.2-in late 2008) whereby the active players of the industry were compelled to raise their prices not less than any thing but 100% because next jump to coin / price denomination was such that they had no way out. In order to overcome the problems stated above, the pro= active companies like Candyland implement the following three kinds of strategies: Reduce the no. of units per pack, unit size, and packaging. Compromising in product quality by reducing qty and/or quality of expensive raw material By using close substitute that is available relatively at cheaper price as a replacement of expensive raw materials.

Candyland- Introduction
Ismail Industries Ltd, The Company manufactures high quality confectionery products under the brand name CANDYLAND. In 2002, it acquired a biscuit company from IBL (Meiji) and expanded its portfolio into biscuits under the brand name BISCONNI. With increasing competition from small-scale manufacturers, in 2003 it launched FIRST, another confectionery company, to cater to lower priced segment. Recently, Ismail Industries Limited has pursued a strategy of backward integration and portfolio diversification with the establishment of ASTRO PACK, a unit for manufacturing of Cast Polypropylene. They are the largest confectionery company in Pakistan manufacturing a wide range of confectionary, biscuits and snacks under the names of CANDYLAND, BISCONNI and SNACKCITY respectively.

It has state-of-the-art factories and the most sophisticated process technology in Pakistan. it recognizes the importance of efficiency and creativity to achieve growth in a competitive environment.

Ismail Industries believe that their people are the reason for its success. They therefore continue to recruit, train and retain the best professionals in the field. It employs more food technologists than any other confectionery company in Pakistan and has an extremely modern laboratory capable of developing innovative products and testing products and ingredients for quality and consistency. Candyland realizes its responsibility towards society and contributes to the environment as good corporate citizens. It ha also achieved ISO 9001-2000 certification benchmark. Vision Statement We aim to offer high quality products to our customers by remaining the most technologically advanced company in our field. We strive to be brand leaders in all the categories that we compete in. we wish to have substantial presence outside of Pakistan, through export and local manufacturing.

Mission Statement We strive to deliver to our customers products, which maximize value and customer satisfaction. We are extensively catering to the domestic markets and strengthening our roots in international ones.

Products Offered By Candyland:

Candies: The company offers hard boiled, Deposited, Filled and laminated toffees for its customers Toffees: .Candyland manufactures two main types of toffees; filled and plain. Chew Toffees Dewy Chewy, Twin Chews, Wicked Chew are a few products that the company makes under the Chew Toffees product line. Jellies There are two types of jellies produced; coated and uncoated in the company.

 Chocolates Enrobed and deposited are the two kinds of chocolates manufactured in the company. Lollipops Gum filled, plain and whistle lollipop are produced for the Candyland customers. Bubblegums Candyland proficiently produces liquied filled gums, mint gums and stick/ chewing gums. Candyland is currently exporting all B class bubble gums as they are low priced. The Export Manager of the company believes that lesser the price charged, the company can gain more orders. On an average, 3-4 containers are exported on a monthly basis. Each container has 1300 packs which are worth US$ 30000/ container. Marshmallows The company has done a good job while producing Twister, Strawberry filled and cone marshmallows. The company has a lot of potential to export Marshmallows as people living within the national borders are still not so much aware of the product. The kids are still unable to recognize the product in the country.

Candyland- Internationally
Candyland is exporting products under the brand name. However, it does not make great efforts to market the products in the international market(s). The company is currently exporting the following products: Biscuits Chips Bubble gums Marshmallows Lollipops Candyland exports to countries like, Afghanistan, Australia, Zimbabwe, South Africa, Middle East countries, USA, Canada, and many more.

As mentioned earlier, the company exports to various buyers. So, it is only concerned is promoting its products to the buyers. There are three modes to exporting products to various countries that Candyland uses. They are as following: FOB CNF CIF It is decided by the company which one is used after analyzing which country to export. There is a Clearing agent whose job is to clear the customs, check all the documents once when he receives the details of the exporting containers. The other party is known as the Nomination agent. The container is arranged by the buyer, and then the clearing agent gives the clearance of the exported product. The duties imposed vary from country to country, so the duty is paid. And then the containers are transported to its destination. The responsibilities and duties of the buyers and the exporter varies in each of the modes; CNF, CIF AND FOB. 2=3% is the clearance cost on an average.

Sales & the Production Process

Candylands annual sales are worth around Rs. 4.69 billion, which is around a 5% of the total sales of the company. The company has around 300 distributers internationally. The company does not market itself as marketing internationally requires huge investments. A separate distribution channel has to be setup in the international market, human resource personnel is required and a lot of other matters involve huge costs and the volume that is to be sent is limited. So, the company directly contacts various buyers and exports the product to them. Then, it is the buyers way to sell the products. The company is currently just concerned with the money they make by exporting to the buyers, rather than properly market themselves and selling their products through an adequate distribution channel.

Sales Orders
The sales orders are taken from the B2B portals and trade shows in which Candyland participate. The buyers give orders to the company. The export manager analyses the demand and send it to the factory, where the product is made. Raw material prices and costs have increased drastically during the past few years so the cost has surely risen drastically. The company has faced problems to this reason. The company keeps a lead time of 15 days at least and a maximum of a month. This buffer time helps them tackle unexpected situations in the country due to which an order might get late.

Means of Exports
The mean of export depends on the country to which the product is being exported. For example, products are also exported to Afghanistan through road. Afghanistan contributes about 40-45% of the export sales of the company.

Pricing Across National Borders

The company believes that the products prices, if kept low, it will lead to an increased no. of orders. As a result, prices for countries like Africa are kept low to gain maximum profits. Whereas, Europe undergoes a premium pricing strategy and Middle Eastern countries undergo competitive pricing strategies. One problem in the Middle East countries is that cartoon characters are banned, so it gets difficult to target kids. However, the print media is then used to promote the product.

Distribution Channel
There are mainly three kinds of distribution channels that the company is currently using/ or is planning to use. The choice of the network depends again on the country the company is exporting to. The kinds are as following: Shop to shop Cash n carry in a wholesale shop. Here, the retailer will purchase the product and take the product to the shops. Product might be taken into a hyper market where no distributer acts in between.

Reference:
Ismail Industries Annual Report 2009

Wordpress Saif Dewan Blog, Muller & Phipps, Business Development Manager Retrieved: February 12, 2010 http://saifdewan.wordpress.com/2010/02/05/global-top-10-chocolate-confectionery-brands-and-theirpresence-in-pakistan/