Professional Documents
Culture Documents
Report
Based on
Submitted By:
• Muhammad Arslan Malik
• Syed Iqbal Haider
• Syed Ahmer Komail
• Syed Zohair Hashmi
• Rehan Hassan Khan
22
Table of Contents
Table of Contents..................................................................................................................2
INDUSTRY OVERVIEW:...............................................................................................4
CURRENT SITUATION:................................................................................................5
History..............................................................................................................................9
BRANDS........................................................................................................................10
BAT WORLD-WIDE.....................................................................................................10
Manufacturing................................................................................................................11
Manufacturing................................................................................................................11
TERRITORIES...........................................................................................................11
KEY ACCOUNTS.....................................................................................................12
Market Share...............................................................................................................14
Illicit Trade.....................................................................................................................16
Evasion & Impact on our business.................................................................................16
Evasion & Impact on Our Business................................................................................16
REGIONAL CONTRIBUTION:................................................................................17
SALES STRATEGIES:..............................................................................................18
sales organizational structure......................................................................................23
development of sales team..........................................................................................25
IMPLEMENTATION................................................................................................26
SURVEY ...................................................................................................................27
FLAWS IN THE SALES DEPARTMENT...............................................................28
SOLUTIONS..............................................................................................................29
RECOMMENDATIONS............................................................................................30
22
ACKNOWLEDGEMENTS
22
INDUSTRY OVERVIEW:
OVERVIEW
Nations are considered developed if they abound in producing quality goods and selling
their produce, not only in their own but also in the global markets. While, Pakistan has
been able to make a reasonable niche in international markets for certain products such as
textile and clothing, purely on the basis of competitiveness, there are many worrying
signals as well.
A lot of counterfeit products are produced and traded in Pakistani market quite openly.
Number two versions of almost every product from confectionary and biscuits to
machines, parts and electronics are available in every nook and corner of the country,
making a mockery of market economy.
According to a report of an international watch group released a few years back, Pakistan
was placed among selected 13 countries of the world where manufacturing of counterfeit
medicines, goods of daily use and cigarettes is on the rise. Pakistan has been put on top
priority list by the watch groups, which are worried over the disturbing trend of
manufacturing of counterfeit cigarettes in particular and other goods of daily use in
general.
Now see how much revenue the illegitimate sector, holding almost one fourth share in the
total market is paying. A meager 0.2 billion rupees as compared to rupees 29.6 billion of
the legitimate sector. Tax losses to the government in tobacco industry alone are
estimated at Rs.6 billion annually and showing persistent increase.
22
industry is one of the most productive industrial sectors. This sector generates thousands
of direct and hundreds of thousands indirect jobs. These counterfeiters and evaders not
only are economic parasites but also harm the consumers’ right to genuine products.
Smoking is a matter of adult choice and the legitimate cigarette manufacturers have
always realized their responsibility to discourage the underage sale. The consumer must
not be left defenseless against the exploitation and wrongdoing of the counterfeiters and
tax evaders.
As mentioned earlier, tobacco and its value added products, according to the industry
sources, together contributed Rs.29.6 billion to the national exchequer in direct taxes
during the year 2005 alone. This was an increase of Rs.4.7 billion or some 18.86 per cent
over Rs.24.9 billion paid by the tobacco industry in taxes during 2004. The industry, up-
stream and down-stream, provides some 50,000 direct and around a million in-direct
employments. This factor alone is enough to gauge the importance of the sector.
The cigarette industry has been one of the major contributors of growth and investment.
However, over the last few years the industry has experienced a serious threat from the
illegitimate products, which have encroached upon the market share quite substantially.
The Central Board of Revenue (CBR), while enhancing the Central Excise Duty on
cigarettes last year, also promised that it was introducing a new provision of outright
confiscation and subsequent destruction of confiscated counterfeit cigarettes. While
provision might have been introduced, the ever prevalent problem of effective
implementation, it seems is playing its part in this case as well. And difference-making
results are yet to be seen, at least at public level.
Counterfeiting is not simply a matter of what industry are we talking about. It is an issue
of upholding legitimate business practices and safeguarding the interests of genuine
production industries. Curbing counterfeiting effectively is necessary to make
environment attractive for investment that country needs the most.
CURRENT SITUATION:
SITUATION
In near future, 28 million smokers in Pakistan may not get a cigarette to smoke as the
country has singed UN’s FCTC (Framework Convention on Tobacco Control)
committing itself to impose complete restrictions on tobacco advertising, sponsorship and
promotion; establish new packaging and labeling of tobacco products; establish clean
indoor air controls; and strengthen legislation to clamp down on rampant tobacco
smuggling and raise taxes.
The singing on the FCTC took place at the UN headquarters in New York by a Pakistan’s
foreign office representative on May 18 2004, making Pakistan the 115th country to do
so.
Of the 1.1 billion smokers in the world today the vast majority, that is 800 million, are in
22
developing countries. In Pakistan, a huge 36% of male population is smokers. However
the fact is that whereas in developed countries per capita consumption of tobacco fell by
about 10 percent during 1970-1990, it increased by about 64 percent in developing
countries. In Pakistan, tobacco consumption in males has increased from 27 percent in
1980 to 36 percent in 2000 and if current trends continue is projected to reach 41 percent
by year 2010.
In Pakistan, legislation is already in place which bans smoking at all public places and
new health warnings covering 30% of cigarette pack surfaces have been introduced.
Interestingly, in the country the tobacco is grown in surplus then is actually consumed by
the smokers. As during current season of 2006, the area covered by the tobacco crop is
51600 hectares producing total a total of 95,600 metric tonnes. The requirement as
announced by the tobacco companies is 38,906 metric tonnes. The difference in
production and that required by the regulated sector is almost three times. Over 50 percent
of tobacco is grown in three districts i.e. Swabi, Chrsada and Mardan. In this scenario the
farmers do not get the adequate profit to their crop and would be more than ready to go
for some other crop under FCTC.
The implementation of the different clauses of the treaty would mean that there would be
a gradual phasing out of tobacco promotion and rising of prices of tobacco products.
Tobacco products are advertised through sports events, music events, films, fashion - in
fact, any place where the tobacco industry can target potential new smokers. The treaty
obliges states to undertake a comprehensive ban on tobacco advertising, promotion and
sponsorship, as far as their constitutions permit. Countries whose constitution or
constitutional principles do not allow them to undertake a comprehensive ban must apply
a series of restrictions on all advertising, promotion and sponsorship.
In the world, Tobacco kills almost five million people each year. If current trends
continue, it is projected to kill 10 million people a year by 2020, with 70% of those deaths
occurring in developing countries. Tobacco also takes an enormous toll in health care
costs, lost productivity, and of course the intangible costs of the pain and suffering
inflicted upon smokers, passive smokers and their families.
In Pakistan the major player is Pakistan Tobacco Company (PTC), a subsidiary of British
American Tobacco (BAT) and Lakson Tobacco, a subsidiary of Philip Morris, holding
35% of the market share in Pakistan. Producing 65 billion sticks annually, they deposited
Rs.32.36 billion as taxes and excise duties in the year 2003 to the government of Pakistan.
According to a report published by Global Agriculture Information Network (GAIN),
currently 24 manufacturers are known to operate in Pakistan.
The amount of profit earned by selling hazardous tobacco could be gauged from the fact
that in 2003 the total global revenues of these two companies were assessed at US$126.7
billion was almost double the GDP of Pakistan for the same year which was US$ 68.8
billion. According to Pakistan Pediatric Association, 1,000 to 1,200 children between the
ages of 6 and 16 years take up smoking every day.
22
Twenty-nine percent of men and 3.4% of women smoke cigarettes regularly, concluded
the National Health Survey, and while the Pakistan Society of Cancer Prevention says
37% of men and 4% of women over 15 years of age are smokers.
Cigarette consumption in Pakistan is five times higher than in India with 620 cigarettes
per adult per annum against 119 for India. This in itself poses a long-term threat to the
health of Pakistan's population, and imposes greater burden on our derelict health
services.
Pakistan Tobacco Company Limited is part of British American Tobacco, the world's
most international tobacco group, with brands sold in 180 markets around the world.
We produce high quality tobacco products to meet the diverse preferences of millions of
consumers, and we work in all areas of the business - ‘from seed to smoke’.
Our operations in Pakistan began in 1947, making us one of Pakistan's first foreign
investments.
22
THE COMPANY
We are part of the trans-national British American Tobacco Group, which employs some
90,000 people worldwide and which has a presence in 180 countries. British American
Tobacco has a position of market leader in more than 50 countries selling over 300 brands
there. In 2004, the Group sold and produced a nearly 16% share of the global market of
cigarettes.
22
PTC is the largest excise tax generator in the private sector in the country. In 2004 alone,
PTC paid the government close to Rs.16 Billion in excise and sales taxes. This amounts
to over Rs. 50 million per working day. Over one million people are economically
dependent on the industry in Pakistan.
History
From being the first multinational to set up its business in Pakistan in 1947 and beginning
operations out of a warehouse near Karachi Port, we have come a long way.
From being just a single factory operation to a company which is involved in every
aspect of cigarette production, from tobacco cultivation to packaging we have evolved
and grown with Pakistan. However, what is significant about these fifty-seven years is
the effort that PTC has demonstrated in the development of the country. By being
instrumental in the campaign for modern agricultural and industrial practices, we have
helped in the development and progress of the agricultural & industrial sector in the
country.
We have been supporting & contributing to various causes of national interest. Educating
22
growers in the latest techniques and technology in agriculture, afforestation and free
health care in designated areas are but a few examples.
BRANDS
In this section, you will find the story of our brands and their origins, as well as an
overview of British American Tobacco's brands worldwide.
22
Manufacturing
Manufacturing
At the factory, the matured tobacco is checked for quality and then carefully blended with
other ingredients which the brand recipe may call for, such as flavourings or pre-
processed tobacco. Keeping track of the various types of tobacco and blend components is
key and computers are increasingly used to track production runs.
Moisture content is crucial. Too dry and the tobacco leaf will crumble; too moist and it
may spoil during storage. The blended tobacco is treated with just the right amount of
steam and water to make it supple and then cut into the form in which it appears in the
cigarette. Excess moisture is then removed so the cut tobacco can be given a final
blending and quality check.
Cigarette making, once done entirely by hand, is today almost fully automated, with the
cut tobacco, cigarette paper and filters continuously fed into the cigarette-making
machines. The technology has advanced dramatically over the years, but quality is not
forgotten; each cigarette is automatically quality controlled to ensure that it meets every
aspect of its specification.
As packing machines put them into the familiar brand packs, wrap the packs in protective
film, and group them into cartons and cases, further testing takes place at each stage to
make sure the cigarettes are properly protected. The completed cases, time-dated to
ensure the freshest product possible, are then ready for distribution. Our two
manufacturing sites are located at Jhelum, Punjab and Akora Khattak, NWFP.
Pakistan Tobacco Company has divided Pakistan into 4 territories. They are:
1. Sindh and Balochistan
2. North Punjab
3. South Punjab
4. Central Punjab
22
It operates in five cities in Sindh and Balochistan territory. They are:
1. Karachi,
2. Hyderabad
3. Nawabshah
4. Sukkur
5. Quetta
KEY ACCOUNTS
Pakistan Tobacco Company has a market share of 55% and is the market leader in the
tobacco industry. There are a total of 1300 key accounts, out of which 507 are in Karachi.
The key accounts are divided into 3 categories or tiers.
1. Top and Groceries
2. Petro-marts
3. High selling convenience and Groceries
Our aim is to build an excellent Trade Marketing & Distribution capability which bears
the hallmark of a world class field force for effective retailer and consumer contact.
The retail universe is classified into Supermarkets, Groceries, Convenience stores and
recreation or leisure outlets such as hotels, cafes and restaurants. The company's Trade
marketing field force provides value added services in complimenting the distribution
effort, in select stores of the universe to enable mutually beneficial partnerships.
We make substantial investment in Retail, through quality in-store and on-store furniture
and fittings to stock and display our products for the convenience of our conumers.
PRODUCTS PRICES
22
1. Dunhill Rs.64
4. Capstan Rs.35
6. Embassy Rs.17
22
PRODUCTS COMPETITORS
1. Dunhill 1. Marlboro
4. Capstan 4. Royals
5. Embassy 5. K2
7. Premier Classic
Market Share
COMPETITORS
Mardan companies 8%
Illicit or smuggled 2%
Market Share
60%
50%
40%
30%
20%
10%
0%
PTC Lakson Mardan Illicit
22
Market Share
PTC
Lakson
Mardan
Illicit
Illicit Trade
The presence of a large and unorganised tobacco sector is impeding the delivery of
the Government's (and the legitimate sector's) revenue targets. This undermines the
viability of the legitimate players in the industry and is one of the major factors in
discouraging foreign investment.
Pakistan Tobacco Company has always worked closely with the Government to improve
the laws and regulation (legislation) to ensure a 'Level Playing Field' for all the companies
in the tobacco sector.
The continued availability of the tax-evaded products restricts legitimate price increases
and is detrimental to what we term the ‘Level Playing Field’. The absence of a Level
Playing Field makes it extremely difficult for the legitimate sector to market their brands
against the tax-evaded consignments. Evaders are therefore harvesting bumper returns by
commercially impairing the ethical manufacturers and fissuring government’s revenue
generating capabilities.
Through the active participation of the tobacco industry, the Central Board of Revenue
(CBR) made some changes in the Excise law to control evasion in the cigarette industry.
The changes are based on the proposal submitted to the CBR by the Cigarette
Manufacturers Association, of which PTC is one of the members.
22
The industry suggested to CBR that they should fix the minimum price for cigarettes in
the market during the last budget; the proposal was accepted and the required changes
were made in the law. The main reason for suggesting this proposal was that currently
there are many companies that are selling cigarettes packs for Rs 5 and less whereas
minimum duties on a pack of cigarette are around Rs. 5.66. This will not only help control
the tax evaded products in the market but also price these out of the reach of most youth.
The adverse impact of counterfeit & smuggled goods affects not only the tobacco
industry, but pervades all sectors of consumer goods. The easy and pervasive availability
of counterfeit cheats consumers and robs brand owners of the investment in building
brand image.
Counterfeiting is a cause of major concern due to serious damage caused to the brand
image. Customer dissatisfaction has a knock-on effect on Company market share and
profitability. Apart from the detrimental effect on the industry and loss to the government
revenues, this also deters new foreign investment particularly in view of continuous
infringement of Intellectual Property Rights i.e. International trademark infringements.
Smuggling has been a major cause of revenue loss. Smuggled cigarettes are readily
available at various retail outlets even though only cigarette packs with the Government
of Pakistan mandated Health Warnings (in Urdu and English) can be sold in the country.
REGIONAL CONTRIBUTION:
CONTRIBUTION
Karachi 31%
Hyderabad 25 %
Nawabshah 21%
Sukkur 16%
Quetta 6%
22
Regional Contribution
35%
30%
25%
20%
15%
10%
5%
0%
Karachi Hyderabad Nawabshah Sukkur Quetta
SALES STRATEGIES:
STRATEGIES
Sales strategies refer to strategic approaches in relation to the efforts made by the sales
team in terms of plan of action through which sales objectives in terms of desired sales
volume whether in relation to survival or growth could be achieved.
The strategic approach employed by PTC in such a competitive market to achieve the
sales objective in relation to growth is Market Expansion.
MARKET EXPANSION:
EXPANSION
This strategy refers to expanding the area of efforts made by sales team. This strategy
involves 2 strategic approaches:
• Market penetration
• Market development
MARKET PENETRATION:
PENETRATION
This strategy refers to initiating sales efforts in further geographical areas within the
existing sales territories or catering further prospective buyers within the existing target
market segments.
PTC has employed the market penetration strategy. Through this strategy it enters new
geographical areas within the existing sales territories and caters further prospective
buyers within the existing target market segments.
22
MARKET DEVELOPMENT:
DEVELOPMENT
At PTC market development is not required. This is because PTC is a very famous and an
established brand and they do not need to open new territories in terms of initiating sales
efforts at those geographical locations which have never been under any territory that
have never been catered before.
Market for their products already exists and they are already being catered therefore PTC
doesn’t need to move into a new territory or a new market segment.
TERRITORY IMPROVEMENT
With the help of this strategy PTC makes improvement in market share of individual
territories in relation to desired sales volume through overcoming the weakness and
building on the strengths as improvement in the market share of individual territories that
will raise PTC total market share.
• Strong territories:
For PTC its strong territories in Pakistan are Sindh and Balochistan and the Central
Punjab territory. The reason behind these strong territories is that they have a large
number of population with market potential.
• Weak territories:
The action plan employed by the company in order to make weak territories strong is:
• Firstly, they try to identify the reasons behind weak territory, which involves
analyzing the entire marketing mix and other factors causing weak territory
performance.
• After, the above mentioned factors have been identified efforts are made to
overcome it.
DISTRIBUTION
22
The distributor for PTC is “Distribution Services Limited” (DSL) which is a sister
concern of IBL. The complete portfolio in Karachi is distributed by DSL. DSL is
responsible for making the product available at all the key accounts. All the company’s
products are delivered to DSL’s warehouse by PTC from where the sales people collect
the products and make it available at all the key accounts.
The vision of DSL is to ensure customer satisfaction at all levels and its Mission is to be a
benchmark distributor through quality customer service, excellent trade relations and
sustainable profitability.
In DSL the sales people report to the field managers who in turn report to the depot
managers. The depot managers are accountable to the sales manager who has to report to
the director. The Director is finally answerable to the chief executive.
Effective distribution is very important because if the product is not available on the
stores then even those people who want the product will not be getting it and ultimately
the sales volume is affected
22
CHIEF
EXECUTIVE
DIRECTOR
SALES
MANAGER
DEPO
MANAGER
FIELD
MANAGER
SALES
MANAGER
SALES
PERSON
FACTORY
WAREHOUSE
DISTRIBUTOR
RETAILERS
CONSUMERS
PROMOTION
22
Over the past few years, Government has imposed some legal restrictions for the
promotion of the cigarettes. Among these are:
• Mass advertising tools are not allowed for the promotion of cigarettes.
• Electronic media and print media are not for the promotion of cigarettes.
PTC has emphasized a lot on promotional efforts by focusing more on sales promotion
and personal selling efforts because cigarette is a sensitive and socially unacceptable
product.
These include:
• market potential
• account relationship
• selling efforts
• competition
MARKET POTENTIAL
• Financial Satisfaction
22
The employees are given bonuses based on annual target achievement as much as
30% of annual salary.
They provide adequate salaries to the employees. The minimum salary is 25000. as a
result the employees of PTC are satisfied and highly motivated.
They are provided adequate fringe benefits including medical insurance, house rent,
limited fuel, need based car, pension and provident funds.
COMPETITION
PTC is the market leader in the tobacco industry. The market share of its main
competitor, Lakson Tobacco Company, is 35%. The market share of PTC is 55% which
is much greater than the competitor.
COMMUNICATION PATTERN
PTC usually adopts the informal communication pattern. But at times depending on the
situation formal communication pattern is also adopted. This communication pattern is
dependant upon the situation being handled.
• Formal communication
• Informal communication
This communication pattern is also used in different situations at PTC. Situations can be
those that require urgent decision making process. Informal communication can also be
used to take minor decisions at various managerial levels.
REPORTING CHANNELS
22
It is very important for the sales persons at PTC to know their reporting sequence i.e. who
reports to whom.
Chairman
Marketing
director
4 Channel
4 Regional Managers Development
Managers
Trade
Marketing Sales promoters
Officers
Sales Promoter
22
At PTC, the sales organization has been structured under full line. Under this strategy all
individual sales representatives in a sales team are assigned all products in a line to sell to
all key accounts/outlets.
DELEGATION OF AUTHORITIES
Delegation of authority has been provided to the sales person to take decisions they deem
fit. PTC can be categorized more of a decentralized sales organization than a centralized
one.
The responsibilities and authorities are delegated to lower level of management. As the
size of the organization increases it becomes difficult for the top management to make
quick and timely decisions.
However there are situations when decisions cannot be taken without the consent of top
executives.
They usually employ people from known universities like LUMS and IBA. All their
employees including the regional and channel managers are highly qualified. This enables
them to control and coordinate the work and activities effectively and efficiently.
In order to improve the performance of the sales force, the strategies listed down are
employed by the company:
• In order to enhance their performance, they train their sales people both internally
and externally. In internal training, they focus more towards teaching ethics and
code of conduct. While, in external training, courses are offered in various
institutes like LUMS, PIMS, SZABIST, IBA etc. in order to get them well-versed
with the latest selling techniques and to cover certain areas as identified by the
concerned territory sales manager.
22
SALES BUDGET:
BUDGET
Sales budget is the fund allocated for the expenditures likely to be incurred as on making
personal selling efforts (sales efforts) which are required to accomplish company’s sales
objectives.
The scope of expenditure under personal selling efforts generally includes the following
individual expenses/expenditures.
• Salary
• Commission
• Bonus
• Traveling and other allowances
• Incentives
• Fringe benefits.
The sales budget of PTC is the combination of both Sales and Marketing budgets.
Marketing budget occupies a small proportion of the budget because of legal restriction
on Advertising and Promotion of cigarettes placed by the government.
BTL activities include sales promotions and posters. They spend a lot of money on sales
promotions.
IMPLEMENTATION
• As the company’s sales efforts are only limited to its distributors therefore there is
not much hassle to solve the issues involving distributors, and these issues include
compensation claims, replacement of damaged goods, taking-back of expired
goods etc. Since the depots are limited, therefore sales people do not waste time in
unproductive areas.
For e.g.: If there is a drastic change in demand i.e. if demand of a certain product has
decreased then the company’s sales team visits the site and investigates the issues; hence
during this course of action the time management strategy is applied.
• The Below the line activities, merchandising and consumer engagement is done by
PTC. Posters are also used for advertising on shops.
For e.g.:
• Posters are mostly pasted at the retail outlets (pan shops) so as to influence the
consumer at the time of purchase.
• Flyers and special supplements are given to retailers when the company introduces a
new product or new scheme.
Although the company’s policies and procedures normally stays the same over a period of
time, but still the sales people and company’s distributors are informed with any change
in their policies and the company makes sure that these changes are applied in their day-
to-day operations.
Also, management solves the middleman issues through the reporting channels that
includes telephonic conversations as well as on person-to-person basis.
SURVEY
We carried out a survey on some of the key accounts including Ami’s, D-mart, My Super
Store, etc. Petromarts and Pan Shops.
22
We questioned some potential buyers also and came to know the following facts:
• On surveying we got to know that there are issues and flaws in the distribution and
at times the product is not available to the customers.
• The sales promoters of PTC are very cooperative and maintain good relations with
the key accounts. They solve all issues of the retailers and also keep a check on
the display, sale and complaints regarding their products. Hence the efforts made
by the company are sufficient and the retailers are satisfied
• A lot of incentives are also offered from time to time. If any retailer achieves the
given sales target, they are given Rs.500 per month. The retailers are awarded 500
for good display and 500 for cooperation.
• Recently a mystery shoppers program is also being carried out, under which they
are given Rs.500 per week, if the back checkers find the display and the behavior
of the retailer cooperative.
22
• Some of the products such as Dunhill are not easily available at all the outlets. This is
a problem because people switch their brand if they do not find the cigarette on time
easily when they need it.
• The distribution is also weak in the rural areas.
2) Quality
According to the complains of people the quality of some of the brands like Gold Leaf is
not the same any more and it is deteriorating
3) Fake products
The unavailability of the product results in the availability of fake products especially in
rural areas. This damages the image of the brand.
CASE IN POINT
Pakistan tobaccos Karachi and Hyderabad region come under a single distributor known
as IbL. These are very strong in distribution and are delivering the goods of the company
on time and to all retail outlets everyday.
The company has three depots in Karachi where from the distributor picks up the stock
and delivers it to the designated retailers. The organizations channel manager and other
executives are aware of this situation, but want to find a reasonable solution to it, so as
not to upset relations with the distributor.
SCENARIO
Every year before the announcement of the budget, the distributor stocks up on cigarettes.
Soon as the new budget is released, they sell the stock at greater new price, whereas they
had acquired it at a lower cost from the company.
This stock is old and many retailers are having severe complaints, as the printed price on
the pack of cigarettes is several rupees less than what they have to now sell it at. Upon
inquiry from the the retailers, they told us that the company cannot domuch about it as it
is part of the trade and they don’t want to lose or mess with such a huge and gigantic, yet
reliable distribution network.
On the other hand, retailers complain of low margins and demand that there share be
increased, as it is hardly profitable for them to sell local PTC products as compared to
imported brands that enter the country via smugglers and is hence also duty free.
SOLUTIONS
22
How to overcome these flaws in the distribution system:
• There should be a team, which should keep a check and ensure that product is
available on each and every outlet.
• 3 to 4 depots should be established in the rural areas for the smooth availability of
products at all times.
RECOMMENDATIONS
• The company needs to work on one of its weakness that is the company needs to
monitor proper distribution of the products. The product is such that moisture
spoils it thus the company should ensure that the cigarettes are made available to
the consumers in the freshest possible form. The company caters to the all the
classes so we can safely say that the bigger retailers and the distributors in the big
towns and cities can afford to bear the loss due to expired or stale cigarettes but
stock dumping for the shopkeepers of small towns and villages will make the
small shopkeepers avoid the company’s products in the years to come.
• Fake cigarettes as well as the smuggled cigarettes should be dealt with in the most
appropriate manner. The government imposes certain legal restrictions on the
smuggling and copying of brands of cigarettes. A number of small shopkeepers
keep smuggled products as part of their shop items which is a direct loss to the
company. The legal actions should be taken in such a manner that it should reduce
the dissonance or level of misunderstandings prevailing between the company,
distributors as well as the shop owners.
• The company must work on maintaining the quality of its brands. This can be
done by close monitoring of higher executives from time to time basis to ensure
that the product is manufactured properly and that the quality is maintained.
22