NATIONAL FOODS MARKET SHARE

National foods still relishes the leading market share in the countrys spice and
condiment business. A name recognized in over 30 countries across the globe, National
Foods products are exported to the far-flung corners of the globe and over the years it
has become one of the countrys prominent multi-category food companies, with over
250 products in 12 different product groups including recipe masalas, ketchup, jams and
condiments, powdered drinks, plain spices and desserts.National Foods Company is
the largest producer and manufacturer of Masala in Pakistan with an estimated 55% of
market share.

Raw Material Analysis

The switching costs for NATF are low as raw materials are mostly commodities. 90% of
raw materials used are procured locally and this factor also allows the company to enjoy
a better position when dealing with suppliers.
Best chilly and other high quality Raw Materials are grown locally.As around 90% of raw
materials are procured locally, National Foods benefits a great deal in its International
operations.
There may be a threat that their market share gets reduced as new entrants would want
to enter this industry with potential for growth. As mentioned before, 90% of raw
materials are procured locally and almost all of them are agricultural products. So new
entrants would also want to capitalize on this benefit of greater margins
National Foods in order to mitigate this threat purchases most of the raw materials
during the season and then stores them. Spices are stored in powdered form and are
mixed with other ingredients when orders are placed.
Over 90% of raw material for NATF products are purchased within Pakistan. NATF
imports Garam Masala from India and Vietnam whereas itsChinese Salt from China
The company directly buys the raw material from the suppliers and growers. The cost raw
material is very low because no added transportation costs in handling products due to the
proximity of the plants. The company purchases in bulk quantity and company maintains long
term relationship with their suppliers and growers. However in case of low yield of crops, as has
been seen recently, it affects supply and cost.

Company procures 90% of raw material for its Spice Products and Recipe Masala
locally. However markets for agricultural products in Pakistan are not efficient. Supply
shortages often occur and prices fluctuate causing increase in Cost of Goods. If
National Foods integrate backward it can give competition to vendors who sell spices in
lose packing and it will be able to control costs of raw material.

Brand Awareness and Visibility

During the first quarter of 2013, National Foods performed exceptionally well. Moreover, its high
quality standards in the convenience food segment resulted in the expansion of its customer
base. National Foods product categories have given a beyond par performance during the
quarter includes pickles, desserts, recipe mix, and sauces. In addition, the companies marketing
efforts increased its sales by 17 percent whereas their brand strategy helped the company to
accentuate its brand image and awareness in local and international markets.
Furthermore, National Foods is continuously monitoring its advertising, marketing, and
promotional activities. In-store displays, television commercials, outdoor activities and the
HamarayKhanay, HamarayTehwar campaign to create a bond between the company and its
customers.
In addition, National Foods traveling cooking show, National Ka Pakistan helped the company
gain access to untapped markets in Pakistan and the televise shows unique feature of
highlighting Pakistani cuisine did support the companys brand building process.

NATFs local and export sales are growing with good speed; companyreported 5% sales
growth to Rs 2,475mn in 2014 against Rs2,349mn. The brands preference among
localcustomers is empowered by creating new marketing strategies undernew
campaign to promote the localization in their products, in tagline of HamareKhane
,HamaraPiyar. As a market leader in pickles segments, companys products are
performing well in all segments including Ketchup, Recipe Mix, Fruitily,Salt and others.
The marketing strategy of National Foods to attractthe consumer to buy products is very
admirable; they target the customers with emotional attachment, which makes long term
relationship with loyal customers.
Success in Brand Elections 2010
Brand elections 2010 were conducted across an electorate of 10000 voters in 50 cities
of Pakistan and National Foods Limited emerged as the firm favorite in 5 food
categories; Recipies; Jams, Jellies, and Marmalades; Pickles; Spices and Ketchup.
Overall, National Foods Limited won 1sr place in Food/Household brands and were 1 st
runner up in the general elections competing against a total of 3500 brands. An
evaluation of voter profiles found that most of the voters were women which meant that
National is the brand women trust the most

National Foods
Trade-in-value
Trade-in-value is a used article given in part payment for the purchase of a new
payment. This kind of transaction is only possible when a particular commodity,
product or service has a longer life than perishable items and has value even after it
is partly consumed. Such facility may be available in cars, electronics, consumer
durables but in the case of National foods where they offer food articles it is not
possible to have a trade-in-value. This is because firstly it is a perishable item and
has a very short shelf life. Secondly as due to the generic feature of food
commodities it cannot be used in any kind of trade-in or monetary barter with any
other food item or commodity. Such kind of facility is also not possibly provided
by one of its closest rival that is Shan foods. They also follow a similar kind of
restriction on trade-in-value of their food articles due to the very nature of food
articles.

Price
Price is an important determinant and variable in this industry as
companies with established brands are competing on prices and
is attracting substantial portion of the market. Furthermore,
competition between National Foods and Shan Foods is very
intense and they offer products at comparable prices. Any move
to change prices is aggressively answered. There are slight
changes in the prices due to changes in the market for input
prices which is clearly passed on to the consumers keeping in
mind the competition in the market. Prices of all SKUs are kept in
view of competition and market shares both in the local and
export market.

Production facilities
The role of technology and innovation in the production facilities
is very crucial in the fiercely competitive Masala market.
Technology is another factor that helps companies differentiate
themselves from their competition. National Foods takes this
factor very seriously and keeps on introducing new technology.
They have employed ERP and SAP system to improve efficiency
and too achieve their vision.
The technological breakthrough in agricultural and food sciences
has provided new ways to increase crop yields, crop quality and
environmental preservation. Such advancements have also
introduced efficiency and quality in the production process.

Life Expectancy
Life expectancy is hard to determine in such a competitive
industry. As compared to the unpackaged Masala compared with
the packaged and branded Masala sold by Shan and National
Foods it is in its Growth stage. It is expected that National
Foods would grow nationally and internally due to high demand
from the local market for hygienic and healthy packaged Masala
and high growth in demand for packaged Masala in the foreign
market.

COMPETITIVE ADVANTAGE
NATIONAL FOODS
One of the Largest and Oldest Food Companies
National Foods is one of the largest and oldest foods companies in Pakistan. It enjoys a good
reputation among customers and is one of the leading Brands of Pakistan. Its reputation for
quality and innovation are two assets that can enable them to penetrate into the domestic market
specially in developing urban areas. National Foods Limited is a Pakistani company founded in
1970, which started out as a spice company. In 1988, National Foods became the certified vendor
of McCormick, USA. In the same year, National Foods, then a Private Limited company was
converted into a Public Limited, listed in all the three stock exchanges of Pakistan.
Diversfied Product Categories
Over the years National Foods has expanded its product offerings and has been exporting
products to foreign countries as well. It is not wholly dependent on the Branded Spice and
Recipe Masala Mix sales.
National Foods Is a Public Limited Company
National Foods is a public limited company where is Shan Foods is a private company. This
factor is very important in deciding any strategy. National Foods can raise capital easily as it is
traded on Karachi Stock Exchange and is one of the KSE 100 INDEX companies.
Strong Nationwide Distribution Network
National Foods has the strong nationwide distribution network. As it is one of the oldest food
companies and has large assortment of products it enjoys good relationship with its Distributors.
This factor can ease the things for National Foods if it is to follow Cost Leadership strategy.

Preferred In Northern Areas

National being the market leader is popular in the upper parts of the country because people there
have a higher preference for slightly mild food. Punjab is the most populous province of the
country and the people there are fond of eating. Now since it is the largest market with mild
preference for spice, it makes it easier for National to have its success story in that part of the
country.

SHAN FOODS

First Mover Advantage

Shan is the largest exporter of packaged spices. This is because of the fact that they were the first
ones to enter the market and together with this because internationally there does not exist a
specific market rather they are activating consumer needs that might exist with Pakistanis and
Indians living abroad, the concept of mild taste (National) being preferred over slightly spicier
(Shan) does not exist there. As a result of this with the first ones to break through Shan has
successfully established a market for itself and a taste that consumers now prefer.

Cryogenic Technology

Shan Foods is the only spice company in Southeast Asia with cryogenic technology that
preserves the taste of 1600-1700 tons of spices when it is ground, by maintaining freezing (0
degree Celsius) temperature and killing heat produced from friction.

Preferred In Southern Areas

Shan has a spicier touch which makes it popular in the southern part of the country.

Targeting Both Genders

Females aging from 18 to 45 years compose the main target market of Shan Foods. This is
because of the reason that in this part of the world, women are mostly related to the food and
cooking. Hence, Shan Foods develops products that are according the needs and wants.
However, lately with the concept of Nuclear families becoming increasingly popular, the
company caters to the needs of males as well making sure that their product is convenient to use
and satisfies their needs too.
Pakistan Standards and Quality Control Authority (PSQCA) requires companies like Shan to
obtain license to operate in Pakistan. In 2010, PSQCA raided a budget bazaar in Karachi and
sealed various non-licensed products including merchandise manufactured by Shan Foods.
After the raids on budget bazaar, Shan Foods applied for the license according to the PSQCA
Act of 1996.

MEHRAN FOODS
Global Presence
Mehran Spice & Food Industries started its journey in 1975 and within a few years of its
inception, the company grew to become one of the leading spice & food industries globally. It
has a greater market share in exports than National or Shan.
Leader in Quality Rice
Mehran is a world leader in quality rice, equipped with the most advanced rice plant from
Germany. The plant, which is one of the few in Pakistan, has enabled Mehran Super Kernel
Basmati Rice to become one of the top selling basmati rice in the world.

MITCHELL'S
Growing and Processing at One Place
Mitchells is the only major food company in Pakistan today with fully integrated operations
having its own growing and processing facilities at one location. Modern high-volume industrial
equipment, professional management and a trained workforce all combine to ensure that
Mitchells continues its dominance as the innovator, market leader and trend setter.
Institutional Clients
Mitchells sucessfully caters to the demands of its clients such as the Pakistan International
Airlines (PIA), leading five star hotels and clubs, Utility Stores Corporation, Canteen Stores
Department, main stores and reputed restaurants in major city
Haleeb Foods (Indirect)
Competitive Advantage
Haleeb claims to be the best milk for making tea, as it is the thickest milk. Haleeb has its own
plants and dairy farms so it is incurring low cost. HFL has a strict and rigorous quality policy
regarding intake of raw material.
Mitchells sucessfully caters to the demands of its clients such as the Pakistan International
Airlines (PIA), leading five star hotels and clubs, Utility Stores Corporation, Canteen Stores
Department, main stores and reputed restaurants in major city