Marketing Slides Arasu 2

8/9/2019 Marketing Slides Arasu 2

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Malaysian Tobacco Company (MTC) Limited wasincorporated in 1947 immediately after Partition, when ittook over the business of Imperial Tobacco Company ofIndia that had been operational in the subcontinent since

1905. It is the largest tobacco company in Malaysia and isthe market leader by both volume and value. MTC is partof the trans-national British American Tobacco Group,

which employs some 54,000 people worldwide and has apresence in 180 countries. British American Tobacco is theleader in 50 countries selling over 300 brands. In 2007, the

Group produced and sold nearly 16.7% share of the globalmarket of cigarettes.


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SWOT Analysis

y Strengthsy Well established brands.y Brand loyal Customers.y Continuous Learning and Improvement.y Market Leadership in the world (BAT), so the learning

curve of the management is high and the people are highlyprudent in decision making.

y Diversified, competent, and motivated workforce andenvironment.

y Modern technology Machinery and equipments.y Managerial trainings and skills development of employees

have made them stand out better than competitorsworkforce.

y Great concern for Health and safety in the companypremises.


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SWOT Analysis

y Weaknessy

y Wastages of material in production.

y Cigarette being a controversial product sometimesdrive an employee motivation

y down and employee commitment to product sale andperfection may hamper

y

Cost of doing business in the region is quite high asMTC spends extravagantly to do up to the market andsocial standards.


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SWOT Analysis

y Opportunitiesy

y Malaysian Tobacco Company has a big market towardsRural Areas for lower brands like Embassy and Gold Flake.

y MTC can diversify its products by offering cigar, menthol

cigarettes and pipe tobacco in Malaysia market for uppermiddle, and upper class.y MTC has the Potential to further improve the cost

reduction method.y Export of Premium brands can open an attractive market

for the company. This big opportunity is backed andjustified by the existing strong operations of the Area SalesOffice at Peshawar.

y .


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SWOT Analysis

yThreats

y

y The biggest threat that MTC is facing at this point in time isposed by the widespread rampant smuggling of foreign brandsthat are much cheaper and eat away a big chunk of profit of thecompany. The company is trying its utmost to control forged

products but could not do so because of poor implementation oflaws and regulation by the state authorities. Forged products arethreats to MTC because they not only cut down the revenues butalso destroy product image and company repute.

y Smoking is discouraged in every society and considered as a badhabit because the link between tobacco and addiction. Since

smoking causes moderate to lethal health problems, people havea negative view about cigarette manufacturers, as they believethat they are selling devices for death.

y Government regulations and highly burdened taxations pose abig threat to cigarette manufacturers.


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Porter s Mo e

y Rivalry among existing firmy In Malaysia British American tobacco is the leading

tobacco company so, due to fewer competitors there will beless rivalry.

y

y Bargaining Power ofBuyers

y Cigarette consumption in Malaysia is five times higher thanin Singapore with 620 cigarettes per adult per anum against119 for Singapore. This shows that the market for tobacco

industry is very immense locally. According to MalaysianPediatric Association,

y 1,000 to 1,200 children between the ages of 6 and 16 yearstake up smoking every day. Therefore bargaining power isrelatively low.


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Porter s Mo e

yBargainingpowerof suppliers

y Suppliers of MTC Tobacco Growers have an intensive bargaining power,because they are large in number. And there is no substitute of rawmaterial available for M.T.C. So in this case it will be suitable for theorganization to pursue a backward integration strategy to take controlof suppliers and get a competitive advantage over its competitors

y

y Potential Entrantsy While the anti-tobacco movement in the USA helped lower cigarette

sales, the big companies like Philip Morris, R.J. Reynolds and Brownand Williamson have continued to expand overseas. They have floodedthe markets in Asia and Europe with promotional products and cut-price brands designed to encourage new smokers.

y Substitutesy There are not much Substitutes in Malaysia so people dont have very

limited brands to switch to other firms.


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yPolitical

y Malaysias political situations have always been stabled. Eventhen MTC is long since contributing in the countrys wealth interms of taxes and providing employment to hundreds of people.

Although it is never denied that tobacco is hazardous to healthbut MTCs aim is not to create more customers but to provide

quality of tobacco to those who are already addicted.y Economicaly

y Malaysian tobacco has maintained its growth momentum duringthe years scaled new heights with the achievement of millstoneand made progress in the every facets of its business. MTC hascontributed RM 26,472 m in year 2007 in the form ofgovernment levies and taxes which is the indicator of how MTCis contributing in the economic development of the countryalong with the job creation

PESTLE Analysis


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PESTLE ANALYSIS

y Technological

y Process Technology MARK 9 plants are used for the production. The manufacturingmachine manufacture 8500 cigarettes per minute - a packing machine makes between300 & 400 packets per minute. The process technology consists of GLT, PMD and SMD.

y

y Socialy

y MTC marketing is about its brands: retaining the loyalty of the consumers to the brands,and winning consumers from competing brands. As a company with long internationaltraditions and roots, MTC is also sensitive to local customs and cultures.

y Legaly

y The Legal function has within its mandate the following areas:y Reputation and Litigation Managementy Company Secretarial work

y Ensuring Sustainable Business Practicesy Intellectual Property registration and protectiony In-house legal advicey Managing Investor Relationsy


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y Environmental

y

y MTC is committed to ensure that it nurture anenvironment where its employees and surroundingcommunities are safe from any hazards that may affecttheir health and minimize the impact of its operationon biodiversity.

PES LE L SIS


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y Research and Development

Rul s f th Gam


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y In the conclusion, Tobacco has been smoked for at leastthree thousand years and for much of that time it hasdivided opinion, sparked controversy and provoked strong

views.y Malaysian Tobacco Co Ltd continues to lead the industry,

without any competitor within in the Tobacco Co Ltd.Nevertheless, MTC cooperate regarding tactics to protecttheir volume shares from illicitly traded supplies of their

brands which are smuggled into Malaysia at lower pricesand are of better quality. The government has not taken anyaction so far to stop this illicit trade, nor is it expected to domuch in the future.

y

Conclusion

Documents

Marketing Slides Arasu 2