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DEVELOPING AND IMPLEMENTING PROMOTION STRATEGIES

Of

Pak Electron Limited

Submitted By:
NABEEL AHMED
AD513710
MBA (A)

Submitted To:

ALLAMA IQBAL OPEN UNIVERSITY


Pak Electron Limited Change your Life

Dedication:

I dedicate my report to AIOU


and all the students of the university.

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ACKNOWLEDGEMENT:

A million thanks to the Almighty, without whose support, there can


be no work. I would also like to take this opportunity to extend my
appreciation and gratitude to Madam Aisha Saba, without their
counseling and parallel skills I would have never been able to
prepare this report. We owe special thanks to PEL Company for
assistance, Development Work and data collecting.

Finally we owe many thanks for the participation of all group


members and their coordination to accomplish the task.

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TABLE OF CONTENTS:

EXECUTIVE SUMMARY
05

VISION
06

MISSION STATEMENT
07

HISTORY OF PEL
08

PEL COMPANY STRUCTURE:


09

SWOT ANALYSIS:
11

TARGET MARKET
16

PROMOTION 17

PROMOTIONAL STRATEGIES OF PEL


17

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METHODS OF PROMOTION AND THEIR


IMPLEMENTATION 17

ADVERTISING
18

CONCLUSION 21

REFERENCES 21

Executive Summary:

PEL and PEL appliances fall under the Saigol Group of Companies.
PEL has long been known in Pakistan as a company that produces
quality products. PEL has created a brand loyalty among its users
and the company credits that to its high quality and vast product
range. PEL has been continuously adding new products to its range.
As a result, PEL has registered a significant increase in its sales
volume, during the last ten years.

One sector in Pakistan that has grown considerably in the past is the
Home Appliances Division. There is great competition in this sector
and PEL has survived this competition with great flair. PEL enjoys
good reputation in the market for its home appliances.

PEL is in a growth phase in this sector. This sector carries a lot of


potential and PEL can capitalize on this fact.

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My stay at PEL was very beneficial due to the fact that I got the
opportunity to learn the trends in the market in this sector. The
company takes it as a liability to take care of its employees. The
corporate culture at PEL was very healthy and induced work habits.
This atmosphere helped me in building self-confidence and belief. At
PEL I had an opportunity to deal directly with the customers and find
out their demands and problems associated with PEL. I got to know
about the trend in the industry and also conducted a research
through which I got a better understanding of the consumer buying
behavior.
I also got a chance to improve my decision-making skills. Further
more, working at PEL also helped me in becoming a better time-
managed person. I got to know the importance of teamwork at the
work place.

In the end, all the experience that I have gained during my stay at
PEL has helped me a lot in becoming a better organized person and
will definitely help me in becoming an even better person in the
future. I can say this with out doubt that the values that I have
gained while working at PEL will be applied to wherever I go to work
in the future.

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“To excel in providing


engineering goods and services
through continuous improvement”

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 To provide quality products & services to the


complete satisfaction of our customers and maximize returns
for all stakeholders through optimal use of resources.

 To focus on personal development of our


employees to meet future challenges.

 To promote good governance, corporate values


and a safe working environment with a strong sense of social
responsibility

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Pak Electron Ltd. (PEL) was established in 1956 with the technical
collaboration of M/S AEG Germany and is the oldest composite
electrical equipment manufacturing unit in Pakistan.
IN OCTOBER 1978 the company was taken over by the SAIGOL GROUP,
which is one of the leading industrial and commercial groups of
Pakistan. The products manufactured by PEL have always been of a
high standard and the name “PEL is synonymous with quality all over
Pakistan.” PEL, since its inception, has been acting as an institution
working for the advancement and development of engineering and
modern technology in Pakistan
IN 1981, PEL window type air conditioners were introduced in technical
collaboration with General Corporation of Japan.
IN 1986-87, the company started manufacturing of refrigerators in
technical collaboration with M/s IAR-SILTAL of Italy.
IN 1987, PEL deep freezers were also introduced in technical
collaboration with M/s Ariston of Italy.

IN 2006, the Company has started manufacturing of split type air


conditioners of various capacities as the customer choice has shifted
from window type to split type.
The product has been well received in the market. This encourages
the company to multiply its production in the coming year.
Today, PEL has become a household name. Its products are not
only in great demand in the local market but the Company has
started exporting its appliances division products.

Pak Electron Limited (PAEL or PEL) is the pioneer manufacturer of


electrical goods in Pakistan. The company is listed on all the three
stock exchanges of Pakistan. Its principal activity is manufacturing

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and sale of electrical capital goods and domestic appliances.But


now, PEL is operating a single business entity without any
division.

LAHORE FACTORY:

In Lahore Factory, Refrigerators, Transformers, Energy Meters,


and Switchgears are produced. Previously, Window AC and Deep
freezers were also produced in Lahore Factory but PEL quit these
operations. However, PEL has restarted the production of Deep
freezers once again at Lahore factory.

There are following departments in the Factory of PEL:

• Production department.
• Research and development.
• Quality control department.
• Human resources department.
• Marketing department.
• Finance department.

The company comprises two divisions:

 Appliances Division.
 Power Division.

APPLIANCES DIVISION:
PEL’s Appliances Division is the flag carrier of the Saigol Group
involved in home appliances manufacturing.

 Air conditioners.
 Refrigerator.
 Deep freezers.

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 Microwave oven.
 Washing machine.
 Generators.
POWER DIVISION:
PEL Power Division manufactures energy meters,
 Transformers
 Switchgears
 Kiosks
 Compact stations
 Shunt capacitor banks
 Energy meters
 Generators
All these electrical goods are manufactured under strict quality
control and in accordance with international standards.PEL is one of
the major electrical equipment suppliers to Water and Power
Development Authority (WAPDA) and Karachi Electrical Supply
Corporation (KESC), which are the largest power utilities in
Pakistan.Over the years, PEL electrical equipment has had been used
in numerous power projects of national importance within Pakistan.
In spite of stiff competition from emerging local and multinational
brands, PEL Group's appliances and electrical equipments have
remained in the spotlight due to constant innovation. Strategic
partnership with multinationals of repute have enabled the PEL
Group to incorporate new technologies into existing product ranges,
thus giving the Pakistani market access to innovative, affordable and
quality products.

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The strengths, weaknesses, opportunities and threats of PEL


are discussed below:

• STRENGTHS:

PEL has the following strengths.


 Brand Name
 Strong Dealer Network
 Quality Products
 Best Sales Services
 Market leader in WRAC
 Number 2 in Refrigerators in Pakistan
 Strong Management Team
 Distribution of Authority
 Research and Development Department
 Free Customer Service
BRAND NAME:
PEL has created a strong brand image in the mind of the
customers through higher quality and low prices. The customers
of PEL always prefer its home appliances like Window AC, split AC
and refrigerators, during the time of purchase. PEL is a popular
company in Pakistan and every one knows about the PEL products
and its brand name. That’s why PEL is a market leader when it
comes to Window AC.
STRONG DEALER NETWORK:
It is also the plus point for PEL that it has developed a
strong dealer network in the market. The dealers always try to
sell the PEL products to the customers because, the company for
its products, gives them a high margin. The management of PEL
also provides more incentives to their dealers than their
competitors. Dealers are very conscious about the PEL products
and always guide the customer in buying the PEL products.

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QUALITY PRODUCTS:
PEL is also in a strong position because it provides superior
quality products to customers. So it gives an edge to company
over its competitors. Due to best quality, guarantee of products of
PEL is more than its competitors.
BEST SALES SERVICES:
PEL provides the after sale service to customers which
increases the customers satisfaction. The biggest strength of
services department is that it handles a complaint within 24 hours
in any part of the country, that helps in increasing the satisfaction
level of customers.
MARKET LEADER IN WRAC (WINDOW ROOM AIR CONDITIONER):
It is also strength of PEL that it is a market leader in WRAC.
Costumer always gives preference to PEL in window AC market
because of low price, high quality and durability.
NUMBER TWO IN REFRIGERATORS IN PAKISTAN:
After the Dawlance refrigerators, PEL has the second
position in the refrigerators market. PEL is gradually coming up in
refrigerator market and increasing its market share. Due to
improved quality, innovative features and good sales services PEL
is becoming the first choice for customers.
STRONG MANAGEMENT TEAM:
It is another plus point that PEL has a strong management.
Its employees are competent, efficient, skilled and knowledge.
They always cooperate with the top management in achieving of
goals that are assigned to them. Employees are well aware about
the company objectives and are committed to the development of
company.
DISTRIBUTION OF AUTHORITY:
Top management of PEL delegates the power to the
subordinates for achieving the marketing objectives in a specified
time period. So every manager has an authority to take decisions

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to achieve the goals of company. In this way they save the time
and react quickly.
RESEARCH AND DEVELOPMENT DEPARTMENT:
PEL has a strong research and development department
that is continuously trying to develop new features for the
products. R&D department spends huge amount of money for the
development of new products.
FREE CUSTOMER SERVICE:
PEL provides free customer service for one year to its
customers. The customers who buy the PEL products become
brand loyal due to this facility.

• WEAKNESSES OF PEL:

Like other companies PEL has some weaknesses. If PEL


overcomes these weaknesses then it can become a market leader
in home appliances. PEL looses some competitive edge in the
following areas:
 Financial Problems
 Lack of advertisement
 System variations
 Lack of Product range
 Less Utilization of capacity
FINANCIAL PROBLEMS:
Sometimes PEL faces the financial problems because its
stocks are so much piled up in the stores that creates problem of
cash flow because when the stocks are not sold and the
production is in process for 24 hours a day then the company
faces such problems.
LACK OF ADVERTISEMENT:
It is a second major weakness of PEL that it is not a vigorous
advertiser. Only recently has PEL invested a considerable amount
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in advertisement, but when we look at its competitors, PEL still


has to do a lot in this sector.
SYSTEM VARIATIONS:
It is also the main weakness of PEL that there is a rapid
change in polices of selling the products. That creates problems
for the selling team to sell the products to the dealers because
the top management requires urgent amount of money. Thus the
products are sometimes sold on hard cash that reduces the prices
of products that creates problems for the management.
LACK OF PRODUCT RANGE:
PEL has introduced more products of consumer items but
there are more needs to develop new consumer items like PEL
washing Machines, Vacuum cleaner and other items.
LESS UTILIZATION OF CAPACITY:
Due to lack of finance a company cannot utilize all its
resources on its full capacity. It increases the cost of products per
unit that decreases the profit margin of each consumer item.
Sometimes, the company cannot allocate the resources according
to the requirements of the production department, which later on
becomes a problem for the complete utilization of resources.
OPPORTUNITIES FOR PEL:
For PEL, there are more opportunities for expansion in business.
Following are the opportunities for the PEL.
 Exploration of market in Pakistan
 Increase in product range
 Export opportunity

 Increase in production capacity

EXPLORATION OF MARKET IN PAKISTAN:


PEL has the opportunity to explore the market in all over the
Pakistan. Even though PEL has introduced its products in many

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cities of Pakistan but there are so many places that are yet to be
exploited.
INCREASE IN PRODUCT RANGE:
PEL can increase its product range that will be more
profitable for the company. There are more needs to develop new
consumer items like PEL washing Machines, Vacuum cleaner and
other items.
EXPORT OPPORTUNITY :PEL has also the opportunity to export
their products in other international countries like UAE, SAUDI
ARABIA, and other Arabic and African countries.

INCREASE IN PRODUCTION LINE:


Company can also increase its production line at the
maximum level that will increase the efficiency of the employees
and will also reduce the total cost.

• THREATS FOR PEL:

Following are the main threats for the PEL:


Strong competition
China’s product introduction in the market
Price war
Slow growth rate in Pakistan
Instability of government
Tax department
World Trade Organization
STRONG COMPETITION:
There is very strong competition in the home appliance
division. Every company adopts different strategies for selling of
the products. It reduces the profit margin of each company and
increases the bargaining power of the buyers who will demand
higher quality of products at lower cost.

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CHINA’S PRODUCT:
China’s products are another threat for the Pakistani
companies because these products are cheaper than the Pakistani
products. China products stress the indigenous companies to
lower the quality and prices that will not be profitable in the long
run.
PRICE WAR:
As there is stiff competition in the home appliance market
that will cause the price war.
SLOW GROWTH RATE IN PAKISTAN:
There is also slow growth rate of home appliance in Pakistan
that will increase the stocks of the company. Although, this
industry is in the growth phase, but the speed of the growth is
very slow.

INSTABILITY OF GOVERNMENT:
The rapid changes in governments will become a threat for
the companies because every government adopts new policies for
the industries. So it increasesthe uncertainty for the investors
who want to invest heavy amounts in their new projects.
TAX DEPARTMENT:
Tax department is another major threat for the company
that will restrain the business expansion. There is a most
complicated tax procedure operating in the country that creates
hurdle in the production and smooth functioning of different
companies in Pakistan.
WORLD TRADE ORGANIZATION:
World trade organization will give the permission in 2005 to
each company of home appliance to export their products after
paying less duties or duty free products. That will increase the
pressures for the indigenous companies to reduce the prices and

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increase the quality. It will increase the competition among the


foreign companies and indigenous companies.

It is
the segment for which the seller designs particular marketing mix.
Target market Strategies:
Following are the target market strategies:

 Aggregation strategy
 Single segment strategy
 Multiple segment strategies
Aggregation strategies:
In this strategy total market is treated as a single segment and single
market mix is developed to reach the customers in the entire
Market.The company offers a single marketing mix.

Promotion is an essential for increasing the demand of the product.


Promotion includes advertising, personal selling and sales promotion.
The seller informs the customers through news papers, television and
posters about the product available in the market.
PRMOTIONAL STRATEGIES OF PEL:
PUSH STRATEGY:

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It is promotion program primarily aimed at dealers in which company


focuses to sell the product. In past PEL used this strategy to increase
their sales volume by giving more and more incentive to the dealers
PULL STRATEGY:
It is another promotional program primarily aimed at final consumer.
Now days, PEL is using PULL strategy by improving product quality
For example: PEL is using the imported DANFOSS compressors in its
appliances.
METHODS OF PROMOTION:
An organization adopts one or more of the following methods
which are very common now a day in uplifting its performance:
 Advertising
 Personal selling
 Sales promotion
 Public relations
PRMOTONAL BUDGET:
 PEL spends 3% of sales on promotion.

• ADVERTISING:
Advertising is non personal communication paid for by a clearly
identified sponsor promoting ideas, organizations or products. The
most familiar outlets for ads are the broadcast and print media.
The company highly believed in advertising. The company is
expanding a lot of money on different advertising media which are:
- Television
- Hording
- Neon Sign
- Stickers
- Banners
- Point Of Sale
- Calendars
- Wall

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- Clocks
- Brochures
- Key Chain
- Billboards

Organizing advertisement:
A firm can manage its advertising program through following ways:

 By developing an internal advertising department


 By using an
outside agency
 By using a
combination of above both
ADVERTISING THROUGH
PRINT MEDIA:
PEL is conducting its
advertising through internal
advertising department. It is
performed by publishing ads
in hot selling magazines.

ADVERTISING THROUGH ELECTRONIC MEDIA:

PEL is conducting its advertising campaigns through advertisement


several outside agencies. PEL sister concern “Red
Communication” is the main advertising agency used for the
purpose of making ads according to changing trends of market and
considering ethical issues. Latest ad of PEL is designed by this
agency by focusing on a college girl and its requirements from

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technology and PEL is providing the appliances which is fulfilling


theses requirement.
Advertising duration:
For refrigerators and air conditioners:
From March to June
For oven and washing machine:
From November to March

SALES PROMOTION:
Sales promotions sponsor-founded, demand-stimulation activity
designed to supplement
advertising and facilitate
personal selling.
PEL uses out door
activities:
 Exhibitions
 Road shows
 Promotion
schemes etc.

PUBLIC RELATIONS:
Public relations encompass
an wide verity of
communication effort to contribute to generally favorable attitude
and opinions towards an organizations and its products.
PEL also engaged in public relations activities just to create a soft
image in the hearts people.
SOCIETAL MARKETING:
Firm that sufficiently extents the breadth and commitment
dimensions of its marketing goals to fulfill its social responsibility are
practicing what has become known as the societal marketing.

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In these days PEL is giving donations for rehabilitation of earthquake


affected areas. The company has donated several necessities for the
help of earthquake affected people.
PEL uses to collect zakat funds on the behalf of several charity
institution as Shokat Khanam hospital

Installment Facility:

PEL gives installment faculty to all government employees, all of the


account holders of Banks Alflah Limited and bank of Punjab.

Conclusions and Recommendations:-


It is concluded that for the promotion
of any organization or product line, use of feasible marketing
strategies is the best way to promote that organization or product.
Earning maximum outcome or profit using minimum input or
resources is an ideal way of promotion and all promotion strategies
depends on this theory for implementation.

References:

Site references:
www.pel.com.pk
www.scribd.com
Men references:

M. Asif Butt (Faisalabad PEL Agency Manager)

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Personal discussion with other managers of different PEL


oputlets were conducted.

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