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7/30/2019 Assignment 2nd 561 Marketing Theory
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Department of Business AdministrationBlock No. 13, Sector H-8,Allama Iqbal Open University, Islamabad.
Marketing Theory & Practice (561)
Assignment No. 02
Submitted to:Mr. M. Saeed
House No. 297, Street No. 03,Margalla Town, ISLAMABAD(0321-516 1337)
Submitted by:
Muhammad Hammad ManzoorMBA (HRM) 1st Semester
Roll No. 508195394
508, 5th Floor, Continental Trade Centre (CTC)
Block 08, Clifton, KARACHI
(0321-584 2326, 0322 555 5901)
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Marketing Theory & Practice (561)
ABSTRACT
The study had been carried out by keeping in mind about the pricing strategies and
price setting techniques for the sake of an organizational, in which the planning
different strategies has to be opted as input that can help us out for continues
progress of the Study Firm (Cere-e-Noor)
Cera-e-Noor (Karachi) has been selected for the sake of the data analysis and working
on its merits and demerits, the methodology includes marketing targets, marketing
strategies used for designing the pricing methods on the basis of the data base
provided by Cera-e-Noor .
SWOT analysis had been carried out and conclusion followed by recommendations had
been made in this regards.
3By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Marketing Theory & Practice (561)
Sr. No. Contents Description Page No.
1 Introduction What is Bench Pricing?
Questions Involved in Pricing?
Explanation of Pricing
5-6
2 Review of Literature Pricing Policy Factors
What influence the price sensitivity?
What influence the price elasticity? Price Quality Strategies
Setting a pricing method
7-17
3 Cera-e-Noor Ceramics Company Profile
Data Collection
18-25
4 Data AnalysisDemerits and Deficiencies
Merits & Strengths
26
5 Recommendations 27
6 References 28
4By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Marketing Theory & Practice (561)
Introduction
What is Pricing?
Pricingis the process of determining what a company will receive in exchange for
its products. Pricing factors are manufacturing cost, market place, competition,market condition, and quality of product.
Pricing is also a key variable in microeconomic priceallocation theory. Pricing is a fundamental aspect of
financial modeling and is one of the four Ps of themarketing mix. The other three aspects are product,
promotion, and place. Price is the only revenue generatingelement amongst the four Ps, the rest being cost centers.
Pricing is the manual or automatic process of applying prices to purchase and salesorders, based on factors such as: a fixed amount, quantity break, promotion or salescampaign, specific vendor quote, price prevailing on entry, shipment or invoice date,combination of multiple orders or lines, and many others. Automated systemsrequire more setup and maintenance but may prevent pricing errors. The needs ofthe consumer can be converted into demand only if the consumer has the willingnessand capacity to buy the product. Thus pricing is very important in marketing.
Questions involved in Pricing?
Pricing involves asking questions like:
How much to charge for a product or service? This question is a typicalstarting point for discussions about pricing, however, a better question for avendor to ask is - How much do customers value the products, services, andother intangibles that the vendor provides.
What are thepricing objectives? Do we useprofit maximization pricing? How to set the price?: (cost-plus pricing, demand based or value-based pricing,
rate of return pricing, or competitor indexing) Should there be a single price or multiple pricing? Should prices change in various geographical areas, referred to as zone
pricing? Should there be quantity discounts? What prices are competitors charging? Do you use a price skimming strategyor apenetration pricing strategy? What image do you want the price to convey?
Do you usepsychological pricing? How important are customer price sensitivity (e.g. "sticker shock") and
elasticity issues?
5By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Can real-time pricing be used? Is price discrimination or yield management appropriate? Are there legal restrictions on retail price maintenance, price collusion, or
price discrimination? Do price points already exist for the product category?
How flexible can we be in pricing? : The more competitive the industry, theless flexibility we have.
o The price floor is determined by production factors like costs (often
only variable costs are taken into account), economies of scale,marginal cost, and degree of operating leverage
o The price ceiling is determined by demand factors like price elasticity
and price points
Pricing Bring in Revenues?
This is the only element in the marketing mix that brings in the revenues. All
the rest are costs Price communicates the value positioning of the product.
A company must set its price in relation to the value delivered and perceived by the
customer. Price = Cost + Profit
Pricing Policy Factors:
6By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Selecting the pricing objective Determining demand Estimating costs Analyzing competitors costs, prices, offers Selecting a pricing method
Selecting the final price
Pricing Objectives:
The company first decides where it wants to position its market offering. Theobjective could be:-
The firm's pricing objectives must be identified in order to determine the optimalpricing. Common objectives for optimal prices may include the following:
Current profit maximization - seeks to maximize current profit, taking intoaccount revenue and costs. Current profit maximization may not be the bestobjective if it results in lower long-term profits.
Current revenue maximization - seeks to maximize current revenue with noregard to profit margins. The underlying objective often is to maximize long-term profits by increasing market share and lowering costs.
Maximize quantity - seeks to maximize the number of units sold or thenumber of customers served in order to decrease long-term costs as predictedby the experience curve.
Maximize profit margin - attempts to maximize the unit profit margin,recognizing that quantities will be low.
Quality leadership - use price to signal high quality in an attempt to positionthe product as the quality leader.
7By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
PRICING
OBJECTIV
ES
Survival
Maximize
Current
Profit
Maximize Marke
Share
Product
Quality
Leadersh
p
Maximize
Market
Share
Maximize
Market
Skimming
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Partial cost recovery - an organization that has other revenue sources mayseek only partial cost recovery.
Survival - in situations such as market decline and overcapacity, the goal maybe to select a price that will cover costs and permit the firm to remain in themarket. In this case, survival may take a priority over profits, so this objective
is considered temporary. Status quo - the firm may seek price stabilization in order to avoid price wars
and maintain a moderate but stable level of profit.
For new products, the pricing objective often is either to maximize profitmargin or to maximize quantity (market share). To meet these objectives, skim
pricing and penetration pricing strategies often are employed. Joel Deandiscussed these pricing policies in his classic HBR article entitled, Pricing Policies
for New Products.
Determining Demand:Each price will lead to a different level of demand and have a different impact on a
companys marketing objectives.
Demand and price are inversely related i.e.Higher the price, lower the demand
Company needs to consider :-
Price sensitivity
Price elasticity of demand
8By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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What influence price sensitivity?
Shared cost ( part of cost is borne by other party )
Sunk investment (product used is required as a complement to earlier
purchase ) Inventory effect ( buyers cannot store the product ) Items bought more frequently ( more sensitive ) / infrequently ( less sensitive)
Unique value effect ( quality , prestige or exclusiveness )
Substitute awareness by buyers
Difficult comparison by buyers
End benefit ( expenditure small part of total income )
Total expenditure ( purchase cost is insignificant compared to the cost of endproduct )
Low cost items (less sensitive ) / high cost items ( more sensitive )
What is price elasticity?
This determines the changes in demand with unit change in price;
If there is little or no change in demand, it is said to beprice inelastic. If there is significant change in demand, then it is said to beprice elastic.
Demand is likely to be less elastic when:
There are few or no substitutes
Buyers readily do not notice the higher price
Buyers are slow to change their buying habits
Buyers think that the higher prices are justified
Price Quality Strategies:
One of the four major elements of the marketing mix is price. Pricing is animportant strategic issue because it is related to product positioning. Furthermore,
pricing affects other marketing mix elements such as product features, channeldecisions, and promotion.
While there is no single recipe to determine pricing, the following is a generalsequence of steps that might be followed for developing the pricing of a newproduct:
1. Develop marketing strategy - perform marketing analysis, segmentation,targeting, and positioning.
2. Make marketing mix decisions - define the product, distribution, andpromotional tactics.
9By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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3. Estimate the demand curve - understand how quantity demanded varies withprice.
4. Calculate cost - include fixed and variable costs associated with the product.5. Understand environmental factors - evaluate likely competitor actions,
understand legal constraints, etc.
6. Set pricing objectives - for example, profit maximization, revenuemaximization, or price stabilization (status quo).
7. Determine pricing - using information collected in the above steps, select apricing method, develop the pricing structure, and define discounts.
These steps are interrelated and are not necessarily performed in the above order.Nonetheless, the above list serves to present a starting framework.
Marketing Strategy and the Marketing Mix
Before the product is developed, the marketing strategy is formulated, including
target market selection and product positioning. There usually is a tradeoff betweenproduct quality and price, so price is an important variable in positioning.
Because of inherent tradeoffs between marketing mix elements; pricing will dependon other product, distribution, and promotion decisions.
Estimate the Demand Curve
Because there is a relationship between price and quantity demanded, it isimportant to understand the impact of pricing on sales by estimating the demandcurve for the product.
For existing products, experiments can be performed at prices above and belowthe current price in order to determine the price elasticity of demand. Inelasticdemand indicates that price increases might be feasible.
Calculate Costs
If the firm has decided to launch the product, there likely is at least a basicunderstanding of the costs involved, otherwise, there might be no profit to bemade. The unit cost of the product sets the lower limit of what the firm mightcharge, and determines the profit margin at higher prices.
The total unit cost of a producing a product is composed of the variable cost ofproducing each additional unit and fixed costs that are incurred regardless of thequantity produced. The pricing policy should consider both types of costs.
Environmental Factors
10By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Pricing must take into account the competitive and legal environment in whichthe company operates. From a competitive standpoint, the firm must considerthe implications of its pricing on the pricing decisions of competitors. Forexample, setting the price too low may risk a price war that may not be in thebest interest of either side. Setting the price too high may attract a large number
of competitors who want to share in the profits.
From a legal standpoint, a firm is not free to price its products at any level itchooses. For example, there may be price controls that prohibit pricing a producttoo high. Pricing it too low may be considered predatory pricing or "dumping" inthe case of international trade. Offering a different price for different consumersmay violate laws against price discrimination. Finally, collusion with competitorsto fix prices at an agreed level is illegal in many countries.
Skimming
Skim pricing attempts to skim the cream off the top of the market by setting ahigh price and selling to those customers who are less price sensitive. Skimming isa strategy used to pursue the objective of profit margin maximization.
Skimming is most appropriate when:
Demand is expected to be relatively inelastic; that is, the customers are nothighly price sensitive.
Large cost savings are not expected at high volumes, or it is difficult topredict the cost savings that would be achieved at high volume.
11By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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The company does not have the resources to finance the large capitalexpenditures necessary for high volume production with initially low profitmargins.
Penetration
Penetration pricing pursues the objective of quantity maximization by means ofa low price.
It is most appropriate when:
Demand is expected to be highly elastic; that is, customers are price sensitiveand the quantity demanded will increase significantly as price declines.
Large decreases in cost are expected as cumulative volume increases. The product is of the nature of something that can gain mass appeal fairly
quickly.
There is a threat of impending competition.
As the product lifecycle progresses, there likely will be changes in the demandcurve and costs. As such, the pricing policy should be reevaluated over time.
The pricing objective depends on many factors including production cost,existence of economies of scale, barriers to entry, product differentiation, rateof product diffusion, the firm's resources, and the product's anticipated priceelasticity of demand.
Setting a Pricing Method
There are following pricing methods.
1. Cost Based Pricing:In the simplest form of cost based pricing, the seller first determines the totalcosts of producing one unit of the product. Seller then adding a standard markupto cover additional costs such as insurance or interest and profit. The total of thecosts and of the markup is the selling price of the product. To determine per unitcost seller must have the information of total costs and expected unit sales.Suppose the manufacturer has the following Costa and sales expectations
Variable Cost per Unit Rs. 10Fixed Cost Rs. 300000Expected Unit Sales Rs. 50000
Then the manufacturers cost per unit is given by:
Unit Cost = variable cost + Fixed Cost / Unit SalesUnit Cost = 10 + 300000/50000= Rs. 16
12By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Now if manufacturer want to earn a 20 percent markup on sales. Themanufacturer markup price is given by:Markup Price = Unit Cost / 1 - Desired Return on SalesMarkup Price = 16/ 1 - 02 = Rs. 20
The manufacturer would charge Rs. 20 of one item, where his profit is Rs. 4 perunit.
2. Breakeven Analysis and Target Profit Pricing
Another cost oriented pricing approach is breakeven pricing, or a variation callertarget profit pricing. Breakeven analysis is one way to consider both market demandand cost in price determination is to use breakeven analysis to calculate breakeven
point. A break even point is that quantity of output at which total revenue equalstotal costs, assuming a certain sellingprice. Sales exceeding the break even pointresults in a profit on each additional unit. The higher sales are above the break even
point and sales below the break even point result in loss to the sales.
Break even point may be found with this formula:
Break Even Pint Units = Total Fixed Cost / Price - Variable Cost
Now Where
Fixed Cost = Rs. 30000Variable Cost = Rs. 10Price Is = Rs. 20
Therefore BEF unit = 300000/21-10 = 30000
Now if the manufacturer wants to make a target profit, must sale more than 30000units at Rs. 20 Each.
Break Even Assumption
When the following are true the exact break even can be determined.
1. The selling price of the product remains the same throughout theperiod.
2. Fixed costs and variable costs are separated.3. Fixed and variable costs do not change during the period.4. Production and Sales during the period are equal.
13By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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3. Perceived Value Pricing
Whatever, the cost incurred and percent of markup to be charged as profit and setthe price, mostly number of companys base price on the customers perceivedvalue? The watch the buyers perceptions of value as the key to pricing. Therefore,advertising and field force companies buildup perceived value in buyers mind.
Suppose if they need seller is offering to his customers a premium that if they needa delivery within one week instate of two weeks which is standard offer then buyerwill have to pay more. Here, we can quote an example off any courier services
company like T.C.S. If they ask the customer that our salesman will get the packetfrom your office only if you pay Rs. 10 more than the standard price Rs. 90.
If customer delivers at T.C.S. office him or her say. Now when seller will offersuperior service and value as well as any warranty, a y durability, or superiorreliability more than the competitor buyer would like to accept the sellers offerand will ready to pay extra value because the perceives about products bitterness.
4. Competition Based Pricing
When one firms product is valued more by customers and capturing market share
more than major competitor than the firm might charge the same, or more than itsmajor competitors is called going rare pricing. In contrast competition based pricingis also used when firms bid for jobs. Using sealed bid pricing, a firm basis its price onhow it thinks competitors will price rather than on its own costs or on the demand.The firm wants to win a contract, and winning the contract requires pricing lowerthan other firms.
5. Selecting the Final Price
14By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Pricing methods narrow the range from which the company must select its finalprice.
Price Adjustment Strategies
Psychological Pricing
A pricing approach that considers the psychology of price and not simply theeconomics, the price is used to say something about the product let us discuss someexamples of psychological pricing.
Old Pricing
Many sellers believe that consumers respond more positively to odd number prices
like Rs. 599 than to whole round figure like Rs. 600. Odd pricing is the strategy ofselling prices at odd amount that are slightly below an even or whole number.
Multiple Unit Pricings
Many retailers (and specially supermarkets) practice multiple unit pricing. That isthey set a single price for two or more units. For example, two related productsbanded together such as a tooth brush and tooth paste for a price of one. Especially
for products with rapid turnover, this strategy can increase sales. Consumers whosee the single price, and who expect eventually to use more.
Prestige Pricing
Prestige pricing is the strategy of getting a very high price to project an aura ofquality and status. Because high quality items are generally more expensive thenthose of average quality, many buyers believe that high price means high quality(and vice versa). High priced products such as Rolex Watches and Schools like Beacon,City, tends to attract quality and prestige conscious people.
Price Lining
Price lining is selling goods only at certain predetermined prices. For example, a
store may sell mens ties only at Rs. 50 and Rs. 75. Actually ties of the shop both areof same category but the difference pushes to sale more ties of Rs. 75. This strategyis widely used in clothing, cosmetics and boutiques.
Geographical Pricing
15By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Geographical pricing involves the company in deciding how to price its products todifferent customers in different parts of country or world, let us discuss some
geographical pricing strategies.
FOB origin Pricing
FOB stands for free on board, seller quotes the selling price at the point ofproduction and buyer selects the mode of transportation and pays all freight costs.In this strategy seller does not pay any of the freight costs. The seller pays only forloading the shipment aboard and each customer pickup its own cost.
Uniform Delivered Pricing
This strategy is the opposite of FOB pricing. Here, the company charges the sameprice plus freight to all customers, regardless of their location. The freight charge is
set at the average cost.
Zone PricingA geographical pricing strategy in which the company sets up two or more zones. Allcustomers within a zone pay the same total price; the more distant the zone, thehigher the price. Suppose one zone is in Karachi and other zone is in Lahore Punjaband point of production is in Karachi Sindh. Therefore, customers in Sindh pay lessthan customers in Punjab.
Freight Absorption PricingIn freight absorption pricing strategy the seller absorbs all or part of the actual
freight charges in order to get the desired business. The seller might reason that if itcan get more business, its average costs will fall and more than compensate for itsextra freight cost freight absorption pricing is used for market penetration and tohold on the increasingly competitive market.
Price Discount and Allowance Pricing
Cash Discount
A cash discount is a price reduction to buyers who buy and pay their bills promptly. A
typical example is 2/10, net 30 which means that although payment is due within30 days, the buyer can deduct 2 percent if the bill is paid within 10 days. Thediscount must be granted to all buyers meeting these terms such discounts arecustomary in many industries and help to improve the sellers cash situation andreduce bad depts. And credit allocation costs.
16By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Seasonal Discount
A seasonal discount is a price reduction to buyers who buy goods out of season.Suppose buying of refrigerator in December. In winter hotels and motels, and airlines
offer seasonal discount in their slower selling periods. Seasonal discount allow theseller to keep production steady during an entire year.
Allowance
Allowances are another type of reduction from the list price. For example, trade inallowances are price reductions given for turning in an old item when buying a newone. Trade in allowance are most common in the automobile industry but are also
given for other durable goods.
Discriminatory Pricing
Companies often adjust their basic price to accommodate fidderences in customer,image and product.
Customer Segment PricingDifferent customer groups are charged different for the same product. For example,PIA charges one fair for adult, one for child, and one for infant. Similarly museumsoften charge a lower admission fee to students and senior citizen. Similarlybusinessmen charge low price to regular and high to regular customers.
Image PricingSome companies price this same product at two different levels based on image
difference. Suppose, a perfume manufacturer can put the perfume in one bottle,give it a name and image, and price it Rs. 300 it can put the same perfume inanother bottle with a different name and image and price it at Rs. 500.
Product for PricingDifferent versions of the product are priced differently. For example, Ahmads jamin 1000 grams pack price is 90 rupees; it takes a same jam and packing 500 gram for50 Rupees.
Location PricingThe same product is price differently at different locations even though the cost of
offering at each location is the same. Suppose, a theater varies its seat according toaudience preference for different location.
Time PricingPrices are varied by season, day, and hours. Different price at different time for
public utilities is an example.
17By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Practical Study of
Cera-e-Noorhttp://www.cera-e-noor.com/Manufacturer of finest tableware
Company Portfolio
Cera-e-Noor plant located in the industrial area of city of Hub in Lasbela, Balochistanprovince of Pakistan, was acquired by the Hashoo Group in the year 2000. It is a state-
of-the-art facility for the manufacture of crockery (tableware). The plant wasdesigned and commissioned with the collaboration of French ceramic giant,Bernardaud Liamoges and technical/engineering expertise from other major players inthe French ceramic industry such as Ceric and Cerlim.
Notable features of the manufacturing unit are automatic plate lines, universaljiggering machines capable of producing extra large sized platters, PLC controls andhighly advanced shuttle kilns for both gloss and biscuit firing.
A Ceramics manufacturing company, Cera-e-Noor specializes in hospitality anddomestic grade porcelain crockery and table ware. The state of the art facility
included the latest technology and processes including automated lines, universalmachines capable of producing extra large size plotter, PLC controls and highlyadvanced Shuttle kens of both glass and biscuit.
Cera-e-Noor uses imported China Clay vitrified at extremely high temperatures toproduce hardwaring and scratch resistant porcelains crockery and table ware indifferent grades.
Cera-e-Noor porcelain is highly durable and four times stronger than conventionalceramics table ware and is microwave and diswasher sale. Limited addition customsdesign and grids can be commissioned suitable for Government or Corporate levels
use. All products are entirely free from harmful material and exhibits excellentthermal stability.
Apart from meeting the industry needs of the Hashoo Group, Care-e-Noor alsocaters to the needs of other customers in the commercial and domestic sectors aswell as international markets at easy realistic prices.
18By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Being the only facility in Pakistan capable of manufacturing hard ceramic product inlarge quantities Care-e-Noor is committed to total customer satisfaction byconsistently providing innovative and unmatched quality products through teamefforts.
VISION OF THE COMPANY:
We strive to be bench-marked against the best in the tableware industry. Our aim isto exceed our customer's expectations ensuring them of highest standards of servicelevels and unmatched product quality.
FUTURE PLANS:
In the future competition will increase in this market and there will be largeavailability of Chinese product at relatively low price. Customer will become brand &quality conscious.
In future we plan to expand our product line by introducing more categories, designs& varieties in both casual & formal ware. We also plan to go beyond the nationalboundaries and market of products worldwide.
19By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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20By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Genuine Hard Porcelain
21By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Cera-e-Noor product line is unique it is the only facility in the country,manufacturing products of hard porcelain from imported quality China clay.
Durable DecorationDue to extremely controlled temperature & atmospheric conditions in the fast firing
fully automatic tunnel Kiln our decorations fuse with the glaze, which gives highdegree of durability even after high dishwasher use.
Domestic and Institutional Product RangesBuilt-in versatility in our production systems allows us to offer both the finetableware for home dinning & the tough thick ware for the institutional client. Wecan custom make company logos as well as design transfers according tospecifications.
Realistic PricesHigh speed, high volume production facilities combined with experienced technical
staff ensures quality products at realistic prices. Try us - you will be pleasantlysurprised.
Free of Harmful MaterialsStrict quality control in the selection of raw materials for the composition ismaintained to avoid hazardous material which can be injurious to health.
High DurabilityCera-e-Noor porcelain is vitrified at an extremely high temperature, making it fourtimes stronger than conventional ceramic tableware and is dishwasher safe.
Scratch ResistantThe hardness of the Cera-e-Noorglazed surface can withstand tough commercial usewith high resistance to scratching/silver marking.
22By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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METHODOLOGY USED:Cere e Noor holds the strategy to facilitate the whole nations and compete the
international standards (i.e. Novita, Rovalden etc) and always is in the opinion to
grasp the market from Upper Class to Lower Class.
Marketing Targets:
Turn Over Benchmarks To achieve a target of PKR 222 million (2 million pieces) within the 1st year
To achieve a target of PKR 400 million (4 million pieces) within the 2nd year
To achieve a target of PKR 1 billion (8 million pieces) within the 3rd year
Profit Oriented Benchmarks
To achieve profit at the rate of 2% within the 1st year 2007-08 To achieve profit at the rate of 4% within the 2nd year of 2008-9
To achieve profit at the rate of 8 % within the 3rd Year of 2008-09
Sales Benchmarks
To achieve a target net sales of Rs. 222 million within the1st year of 2007-08
Expand the number of dealers by 10 %
To achieve a target net sales of Rs. 400 million within the 2nd year of 2008-09
Expand the number of dealers by 30 %
To achieve a target net sales of Rs. 1billion within the 3rd year of 2009-10
Expand the number of dealers by 50 %
MARKETING STRATEGIES:
PRODUCT LINE PRICING:Cere e Noor believe in Product line pricing and categories the three (03) choices for
the lower class to higher class customers. The company utilized same imported
material for the porcelain with different features at different prices. The greater thefeatures and the benefit obtained the greater the consumer will pay. This form of
price discrimination assists the company in maximizing turnover and profits.
23By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Marketing Theory & Practice (561)
LOWER Category - Product Line Pricing:Cere e Noor holds the low earning customer in the lower category and hold the
reasonable prices at Rs. 10, 000 / dinner set (example). The customer prevails ease to
purchase the product. Since the raw material used by the Cere e Noor is same but
with the different variety of designs colors and manufacturing.
The customer enjoys the international standards of Cere e Noor at the reasonable
minimal prices.
MIDDLE Category - Product Line Pricing:Cere e Noor holds the middle earning customer in the middle category and hold the
reasonable prices at Rs. 13, 000/- to 20, 000 / dinner set (example). The customer
prevails ease to purchase the product. Since the raw material used by the Cere e Noor
is same but with the different variety of designs colors and manufacturing used better
than the Lower Category for the medium range with better variety in comparison with
the lower category.
HIGHER Category - Product Line Pricing:Cere e Noor holds the higher earning customer in the middle category and hold the
reasonable prices at Rs. 20, 000 /- to Rs. 100, 000/- dinner set (example). The
customer prevails ease to purchase the product at international standard in local
market (Pakistan) as compare to the international standard. Since the raw material
used by the Cere e Noor is same but with the different variety of designs colors and
manufacturing used better than the Lower & Medium Category for the Upper rangewith better variety in comparison with the lower & Medium category.
In higher Category, Cere e Noor makes a big difference as compare to the medium
and lower class and holds a lot of fancy and attractive design & varieties in Higher
Category.
BUNDLE PRICING:Cere e Noor holds some time Bundle Pricing Option to launch their products available
in stock. The Cere e Noor bundles a group of products at a reduced price. Common
method used is buy one and get one free promotions.
24By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Marketing Theory & Practice (561)
PROMOTIONAL PRICING:Cere e Noor holds some time offer promotional offers in the form of the coupon, gifts,
mug pot set, tea pot set etc. For promotional marketing, Cere e Noor uses the
MASALLA TV CHANNEL, in which renowned Cheff and celebrities have to hire who are
responsible for comapaign at Masalla TV during the morning shows.
They generally have live call system in the morning show and offer the coupons to the
participants and get them onboard for onward for future lucky draw.
Lucky draw is generally held at the Cere e Noor famous outlets, like THE FORUM
shopping mall or at Gul Plaza and Senior Executive or Famous Celebrities are invited
for balloting results of the lucky draw and gifts are distributed.
25By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Marketing Theory & Practice (561)
Merits, Demerits, Strengths and Deficiencies:
Merits & Strengths: Premier local manufacturer of porcelain tableware.
Part of the elite Hashoo group -the owners and operators of two leading chainsof hotels namely Marriott and Pearl Continental
Ability (knowledge, skills and facility) to manufacture hard porcelain.
Demerits and Deficiencies: Plant is geared towards small volumes and labor intensive manufacturing
resulting high. Cost of manufacturing
Quality is acceptable but consistency needs to be ensured. Further
improvement in quality is necessary to compete with top International brands.
Lack of Decal Development Facility. Lack of original designs
Lack of brand awareness in relevant markets
Lack of proper HRD( succession planning, Training & Development)
Lack of Planning strategy for pricing.
Opportunities: Huge growing domestic market
Growing purchasing power of people within the economy
More and more consumers are becoming brand conscious
Modern lifestyles markets are growing.
Threats: Growing Manufacturing Power of China (they can do reasonable quality at low
cost)
Increasing energy costs.(Oil & Electricity)
Increasing prices of raw material
Political stability is at a decline.
26By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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Marketing Theory & Practice (561)
Recommendations:
Enhance the Product quality standards
Enhance the planning strategy for pricing.
New design techniques need to be incorporated in better way to compete theinternational standard in better way.
Redesign according to the market insight survey carried out by Cere e Noor
marketing team
Pricing strategies should be revised also for psychological pricing approach.
Enhance the manufacturing plant capacity to get the maximum number
They should try to come up with the maximum number for production in order
to reduce their cost in External Benchmarking.
Enhance the brand design
Enhance HRD to meet the appropriate professional needs for onwardcompetition
Administration department needs to address for of hiring experienced
professionals of the relevant trade.
The emphasis of the company emphasized is work progress, nor on the
personality grooming of an individual, which could be helpful for company
operation smooth conduction and helping out for better prospectivity in the
form of his personal growth and motivation to company.
More pricing survey should be incorporated within the market and among the
customer for better satisfaction of the customer need and pricing.
27By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
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References:
A special tribute and thanks to the following professionals of Cera-e-Noorfor
cooperating in providing data and fruitful assistance.
Name Designation Contacts
Ms. Shazia Lakhani Manager [email protected]
m
Muhammad Usman Javed Manager Marketing javd.u@ ogil.com.pk
http://en.wikipedia.org/wiki/Pricinghttp://en.wikipedia.org/wiki/Pricing_strategieshttp://www.bized.co.uk/educators/16-19/business/marketing/lesson/pricingstrat.htm
http://www.netmba.com/marketing/pricing/http://www.learnmarketing.net/price.htmhttp://www.vladvisors.com/images/PDF/VisionLink_Ten-Steps-Building-Effective
Incentive-Plan.pdf
28By: M. Hammad Manzoor, MBA HRM-IV, 508, 5th Floor, Continental Trade Centre (CTC), Clifton 08,
Karachi. (Roll No. 508195394)
mailto:[email protected]:[email protected]:[email protected]://www.bized.co.uk/educators/16-19/business/marketing/lesson/pricingstrat.htmhttp://www.bized.co.uk/educators/16-19/business/marketing/lesson/pricingstrat.htmhttp://www.netmba.com/marketing/pricing/http://www.learnmarketing.net/price.htmhttp://www.vladvisors.com/images/PDF/VisionLink_Ten-Steps-Building-Effectivehttp://www.vladvisors.com/images/PDF/VisionLink_Ten-Steps-Building-Effectivemailto:[email protected]:[email protected]:[email protected]://www.bized.co.uk/educators/16-19/business/marketing/lesson/pricingstrat.htmhttp://www.bized.co.uk/educators/16-19/business/marketing/lesson/pricingstrat.htmhttp://www.netmba.com/marketing/pricing/http://www.learnmarketing.net/price.htmhttp://www.vladvisors.com/images/PDF/VisionLink_Ten-Steps-Building-Effectivehttp://www.vladvisors.com/images/PDF/VisionLink_Ten-Steps-Building-Effective7/30/2019 Assignment 2nd 561 Marketing Theory
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Marketing Theory & Practice (561)
M. Hammad Manzoor
508195394
# 508, 5th Floor,
Continental Trade Centre,
Clifton - 08, KARACHI. (0321-
Marketing Theory &
056102
Mr. M. SAEED
House. No. 297,
Street No. 03, Margalla
ISLAMABAD. (0321-516