University of Education

Lower Mall Campus, Lahore

Department of Management Sciences

Internship Report

Sapphire Dairies (Pvt) Limited

A REPORT SUBMITTED TO THE DEPARTMENT OF MANAGEMENT SCIENCES,

UNIVERSITY OF EDUCATION, LOWER MALL CAMPUS, LAHORE IN THE

PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION (3.5 YEARS).

Submitted By: Muhammad Sajid Majeed

Roll No: 28

Session: 2011-2015

Submission Date: December, 08 2014

University of Education

Lower Mall Campus, Lahore

Department of Management Sciences

Letter of Undertaking

This internship report was submitted by __________________ S/o.

________________________ Roll No. ________________ for the partial fulfillment of the

requirements for the degree of

MBA (3.5 years)

Session (2011-2015)

With specialization in

Marketing and is hereby accepted by the evaluation committee.

Internship Supervisor ________________________

Principal ________________________

D E D I C A T I O N

“THIS INTRNSHIP REPORT IS DEDICATED TO ALL BUSINESS STUDENTS”

I would like to dedicate this internship report to all business students who are

struggling to become business professionals and plan to achieve the dreams of their

parents. We hope that they would extract useful content out of this report and today

we feel honored to be able to help someone. May ALLAH help all of us!

Acknowledgement

We have the pearl of our eyes to admire blessing of the compassionate and omnipotent because

the words are bound, knowledge is limited and time is short to express His dignity. It is one of

the infinite blessings of almighty ALLAH that He bestowed us with potential and ability to

complete the present training and make a material contribution towards the deep oceans of

knowledge. First we avail this opportunity to bow our head before ALLAH almighty in humility

who given us the wisdom and perseverance for completing this piece of six weeks internship. We

invoke peace for Holy Prophet Muhammad (P.B.U.H) who is forever torch I feel highly privilege

to ascribe the most and ever burning flame of my gratitude and deep scene of devotion to the

Sapphire Dairies (Pvt) Limited on providing me the opportunity to have an internship on this

leading food and dairy production unit. It would honor for me to pay gratitude to Mr. Hossam

Moner, production manager of Sapphire Dairies limited, on his encouragement and providing me

the facility to learn. I am highly thankful to Dr. Naveed Anjum, shift in charge, senior manager of

research and development department of quality assurance of Sapphire Dairies (Pvt) Limited and

special thanks to Assistant Brand Manager and Marketing Manager for their nice and co-

operative behavior and reading to guide attitude during my training. I am also obliged to all

the staff and workers of Sapphire Dairies (Pvt) Limited of their co-operative behavior.

No acknowledgement could cover adequately express my obligations to my dear father and

mother who ever remembered me in their prayers and supported me in all aspects along awful

venues of me academic achievements.

Executive Summary

This report is prepared for the requirement of my degree MBA (Marketing). Internship was

started on September after knowing all the relevant information about the marketing, under the

guidance of Mrs. Arshia Rauf. The first part of my project involves the study of distributors

allocated to me Identification of their problem areas and helping them in order to increase sale.

For this I used the method of personal interviews and questionnaires. At the same time, they

were being made aware of the incremental scheme of Sapphire Dairies (Pvt) Limited for the

distributors. Along with the distributors a study of retailers was conducted to better understand

the grievances and identify the gaps. For this I visited some outlets in the areas. I was also

supposed to find out new retail outlets and convince them to sell Sapphire Dairies (Pvt) Limited

products by showing them the opportunity of getting attached with Sapphire Dairies (Pvt) Limited

and increase the customer base. Despite of summer and low demand I was successful in

persuading people. The second part of my internship is the study of consumer attitude towards

Sapphire Dairies (Pvt) Limited or more specifically the factors affecting the decision of purchase of

milk and other products.

Table of contents

1) Profile of the Industry -------------------------------------------------------

2) Overview of the Organization -----------------------------------------------

2.1) History --------------------------------------

2.2) Vision Statement --------------------------

2.3) Mission Statement ------------------------

2.4) Introduction of the Organization -------

2.5) Company Policy----------------------------------

2.6) Market Standing ---------------------------

2.7) Competitors --------------------------------

2.8) Business Volume --------------------------

2.9) Product Lines ------------------------------

3) Organizational Structure ----------------------------------------------------------------

3.1) Organization Hierarchy Chart -------------------

3.2) Number of Employees ----------------------------

3.3) Main Offices ---------------------------------------

3.4) Brief Introduction of Different Departs. -------

3.5) Comments on the Organizational Structure ----

4) Internship Program Plan ----------------------------------------------------

4.1) Brief introduction of branch area ---------------------

4.2) Starting and Ending date of Internship ---------------

4.3) Departments Name where Got Training --------------

5) Training Program -------------------------------------------------------

5.1) Detailed Description of operations and activities ------

5.2) Detailed Description of the tasks assigned to me -------

6) Structure of concerned specialization department i.e. Marketing----------------------

6.1) Department Hierarchy ----------------------------

6.2) Number of Employees working in Marketing Department -----------

7) Marketing Functions ----------------------------------------------------------

7.1) Product Service -------------------------------

7.2) Pricing Strategies -----------------------------

7.3) Distribution Channels -----------------------

7.4) Promotions ------------------------------------

8) Critical Analysis ---------------------------------------------------------

9) SWOT Analysis ----------------------------------------------------------

10) Conclusion ---------------------------------------------------------------

Profile of the Industry

World milk production:

Two thirds of total world milk is produced by Brazil, India, Pakistan, Poland, Russian

Federation, USA, and 15 EU member states. Pakistan’s share in the total production of the world

according to which, Pakistan in the fourth largest milk producer in the world.

Livestock contribution to agriculture value added stood at 55.9 percent while it

contributes 11.8 percent to the national GDP during 2013-14 compared to 55.5 percent and 11.9

percent during the corresponding period last year, respectively.

Gross value addition of livestock has increased from Rs. 756.3 billion (2012-13) to Rs.

776.5 billion (2013-14), showing an increase of 2.7 percent as compared to last year.

World milk production by type of milk

Various animals includ ing buffalos, cows, sheep and goats produce milk. Total

world milkproduction is dominated by cow’s milk followed by buffalo, goat and sheep

.According to FAO estimates, out of the total milk production in 2001, cow’s milk accounted for

84.6% of the total world milk production followed by buffalo milk (11.8%,), goat milk (2.1)%

and sheep milk (1.3%).

Milk production in Pakistan

Pakistan is the fourth largest milk producer in the world. About a third of the total

milk produced by the rural families’ flows out to urban consumers and processing industries. In

urban areas milk is available to common consumers in two ways: loose / unprocessed milk and

packed/ processed milk.

Dairy companies such as Nestle, Gourmet, Haleeb are the main part of milk marketing

structure. Sapphire Dairies as local company, which developed from a small structure. Livestock

sector in Pakistan contributes almost 50 percent to the value addition in the agriculture sector,

and almost 11 percent to GDP, which is higher than the contribution made by the crop sector

(47.4% in agriculture and 10.3% in GDP).

The role of livestock sector in the rural economy is very crucial as 30-35 million rural

population of the country is engaged in this sector for its livelihood. Within the livestock sector,

milk is the largest and the single most important commodity.

Pakistan also has an industrial production capacity of approximately 47.5 million liters

per year of ice cream. Pakistan's dairy industry is plagued by a number of problems

which include lack of commercial dairy farms, low productivity due to poor nutrition, a weak

infrastructure, lack of financial facilities, and the ready availability of raw milk to a poor and

uneducated population. Although Pakistan was ranked fourth among the five leading

milk producing countries in the world, with an estimated 24 million animals having produced

closely to 28 million tons of milk in year 2003 and over 31 million tons during 2005-06as the 5th

largest producer of milk in the world, its yield per animal is only one-fifth of that of Western

Europe.

Poultry Sector Growth:

Poultry Sector has contributed 1.3 percent in GDP during 2013-14 while its contribution in

agriculture and livestock value added stood at 6.1% and 10.8 % respectively.

Poultry meat contributes 28.0% of the total meat production in the country. Poultry Industry is

more than Rs. 200.00 billion. Poultry sector has shown a robust growth @ 8-10 percent annually

which reflects its inherent potential.

The poultry value added at current factor cost has increased from Rs. 121.7 billion (2012-13) to

130.7 billion (2013-14) showing an increase of 7.4% as compared to previous year.

Overview of the Organization

History

Sapphire Dairies® is part of the Sapphire Group which is one of the largest manufacturers

and exporters of textile products in Pakistan. Sapphire has over 14,000 employees with an annual

turnover US $ 550 Million, along with an asset base of over US $700 million.

With about 38 billion liters of milk produced annually, Pakistan is the third largest producer of

milk in the world. Keeping this figure in mind along with the rapidly changing demographics,

widening supply/demand gap, improving in consumer taste and increasing consumer awareness,

Sapphire Group, ventured into the dairy sector.

Vision Statement

Most Innovative and fastest growing Dairy Company offering many products enjoyed in “every

home every day”

Mission Statement

To build flexible production capabilities in the dairy industry to cater to the growing and

evolving global demands, keeping a lead position in our business, maintaining our values based

on good business and ethics, and at the same time contributing in the development of the

community in which we work and live.

Introduction of the Company

Sapphire Dairies Limited is one of the fastest growing packaged dairy companies in Pakistan

with an annual turnover rate of 7.2 Billion. It was incorporated in 2008. Within a short span of

just 5 years ,the company is operating in 5 businesses segments; UHT milk, Cream, Juices,

Powdered milk & Butter oil. Sapphire Dairies has achieved undisputed leadership in the

liquid packaged milk category with a market share of more than 56%. The company has a very

strong portfolio consisting of leading National / International Brands.

Company Policies

Company is committed:

1) Build branded dairy business to improve the quality of life by

offering tasty, Safe, hygienically processed, affordable, highly nutritional

dairy products through environment friendly processes to our customer while

maximizing stake holders’ value.

2) Meet the requirements of all the relevant legis la t ion & regulat ion

related to Customer satisfaction & safety, environment& other applicable

laws etc.

3) To prevent pollution through controlling level of harmful emission,

effluents &other wastes

4) Contribute to the safe & the healthy environment for our country.

5) Promote mutual trust with customers, suppliers, employs, shareholder &Comm

unity.

6) Provide all the necessary resources for the continua l improvement in

quality, safety of our products, process & environment.

Company Objectives:

Quality Objective

Provide regular and timely supply of milk and milk products at convenient distribution

points under clean and hygienic condition for different segments of consumers.

Provide remunerative returns to milk producers and other associations.

Promote innovations, continuous learning and improvement.

Social objective

Protect the rural marginal milk producing farmers from exploitation of profit earning

middleman.

Help them rear their cattle in hygienic condition thereby increasing production of Milk.

Provide wholesome milk to the customers in Kolkata and Bengal at a reasonable price

throughout the year, right at their door step.

Company Values: People

Relationship

Integrity

Diversity

Environment

Dealing

Relationship

Integrity

Envoirment

Diversity

Dealing

People

Market Standing

As far as market share is concern according to “Digest of Industrial Sectors in Pakistan “in a

UHT packed milk category MILK PACK is dominated by other brand having more than 3000

collection centers and get market share more than Sapphire Dairies (Pvt) Limited was 44%,

and as Engro Chemicals also steps in the dairy industry and launches a milk name “OLPERS”

and in less than a year they declare a notice on September 13,2006, as per the notice they able to

captured 9% of market share and utilizing their 70%capacity of their production unit is going to

set another milk processing plant in Punjab and rest of 2% comes.

Competitors

Different Competitors of Sapphire Dairies Limited is following:

1) Nestle Milkpak Limited

2) Yummy Milk Products

3) Engro Foods

4) Prime Dairies Limited

Nestle milkpak Limited

Engro Foods

Limited

Yummy Milk

Products

Prime dairies Limited

Business Volume

2008• 350

cows

2009• 850 cows

2011•1,600

cows

•850 milking

•19,000 liters/day

2012•4,000

cows

•2,400 milking

•60,000 liters/day

2020•8,000

cows

•5,000 milking

•150,000 liters/day

Annual turnover over 874 million USD

More than 15,000 employees

Asset base over 760 million USD

Product Lines:

White Gold

Sapphire Dairies believes in hygiene and good quality milk. We have the best milking

equipment provided by the Swedish company "De Laval", which is gentler, more efficient and

effective. We are committed to provide natural and hygienic dairy products to the people of

Pakistan. That is why we make sure that the milk reaches the customer in its purest form with all

its nutrients intact. Our milk is unprocessed and in raw form because for centuries in our part of

the world, the consumer has been using raw milk. However, as our goal is towards modern dairy

farming practices (which are not common in Pakistan) so we are working toward the processing

of our milk in an effort to provide our customer with the best quality dairy product.

Unipure

Our brand Unipure's White Gold is a complete nutritional value of milk as it comes to you fresh

from the cow's udder. To consume what nature has bestowed to the cow, White Gold brings to

you thick creamy milk without any adulteration and preservatives or chemicals. That is why

when boiled, a very thick layer of rich cream surfaces which indicates its purity and freshness. It

is obtained from healthy Australian Cows that are kept and reared using most modern and state

of the art facilities supervised by professional management.

White Gold is raw milk; therefore it needs to be boiled before usage, as boiled milk stays fresh

for a longer time in the refrigerator and can be consumed within 3 to 4 days. White Gold can be

conveniently used for making yogurt, butter, cheese and ghee.

White Gold is premium quality milk and is the best alternative for the loose or other forms of

milk available in the market. It offers a great taste and complete nutritional value as compared to

loose milk which does not adhere to the required hygiene levels and is contaminated with

bacteria. White Gold maintains a high standard of milk quality as it is processed through a

mechanized and fully automated milking system. The milk is stored in clean containers in its

original form without any changed made to it. Every pouch of White Gold offers 100% fresh raw

milk and nothing else.

Organizational Structural

The entire structure of the organization of Sapphire Dairies (Pvt) Limited can be broadly

divided into 3levels, each level having separate roles and responsibilities. These 3 levels are

upper management, senior management and the middle management. Each of these lower levels

is responsible to perform Its functions and thereby report to the next higher level in the

organization on a periodic basis. Overall, we can say that the company has a flat structure,

beginning from the top management to the lowest level of management. The Upper Management

of the company has designation like the Managing Director of the entire company and the Group

Executive officer. The Senior Management has the various Vice Presidents of the different

departments which come directly under the Managing Director. Under the Vice Presidents we

have the Chiefs of the various functions who coordinate the activities of its function along with

the other departments. There can be more than one chief in a department depending upon the

number of line of the products. This is seen in the Long Products Departments.

Sapphire Dairies Limited diversified their business in dairy industry because in Pakistan we

have 180 Million people. It is large market size to serve and dairy demand is increasing

continuously for the population. Sapphire Dairies. wants to serve medium and low segmented

cigarette for their target market. In dairy industry, there are many local & foreign companies.

Sapphire Dairies wants to be local unique dairy farmer with the same quality of foreign

company. Sapphire Dairies has its own marketing & sales department in Sapphire Dairies

chamber. The functions of this distributor are very wide and dynamic. Main functions performed

by this department are:

Product orientation program

Collection of commodity transferred

Create market for its product

Push sale adopt

Problem solving of sales representatives

Developing communication strategy

Preparing sales forecast

Maintain sales management in the field

Keeping record of sales

Keeping record of stock

Collection & analysis of competitors activities

Setting Sales Target amount

Revising Sales Target amount

Maintaining Sales Target amount

Beside these, it performs a number of activities to conduct their day-to-day business. Under

marketing & sales department, a Brand team performs the key role of real marketing.

Span of Control & Unity of Command

Span of control refers to the number of subordinates a supervisor has. There are two types of

span of controls which exits in the many organization.

1. Wide span of control:

Wide span of control means a single manager or supervisor oversees a large number of

subordinates. This gives rise to a flat organizational structure.

2. Narrow span of control:

Narrow span of control means a single manager or supervisor oversees few subordinates. This

gives rise to a tall organizational structure’s Sapphire Dairies have narrow span to control due

to the following reasons

Workers are located in different geographic locations like Gujranwala, Faisalabad, and

Karachi.

Because Sapphire Dairies requires great deal of interaction between supervisor and workers

New problems arise frequently

3. Unity of Command

The unity of command principle states that an employee should have one and only one

supervisor to whom he or she directly reports. No employee should report to two or more

supervisor since each supervisor has their own priorities. So the same principal is adopting by the

Sapphire Dairies because the smoothness of the work.

Organizational Behavior

Organizational behavior is simply the understanding, prediction, and management of human

behavior in organizations. In other words, organizational behavior is involved with the study and

application of the human side of management and organization. Sapphire Dairies being an

organization in the competitive business community also needs to carefully concentrate on

behavioral side of human management. The important issues in this regard follow:

JOB DESIGN

In recent years Sapphire Dairies has adopted job rotation form of job design, by providing to its

employees a greater variety of work by transferring them to different departments. Particularly

the marketing analysts enjoy the benefit of job enrichment, too, through visits to assigned

projects. The staff members are also sent to attend various courses offered by other institutions in

the country as well as abroad. This practice enhances their experience and skills.

JOB SATISFACTION

Almost all the officers of the high level management come through CSS. Their qualification

does not match with their professional work. So they face some kind of problems in performing

the daily routine work. In some departments there is a very little job satisfaction among the

employees. But the overall the people are satisfied with their job up to some extent.

JOB STRESS

Stress is an adaptive response to an external situation that results in physical, psychological or

behavioral deviations for organizational participants.

The following types of stress may result in job stress.

1. Extra-organizational stress

2. Organizational stress

3. Group stress

4. Individual stress

5. Job stress

The top management of Sapphire Dairies has taken measures and made efforts to minimize the

negative stress amongst the employees. In organization special efforts are being made to reduce

group stress by making the employees realize that they are an essential part of the organization

and a sense of involvement is provoked amongst them.

Another reason for this low negative stress is the fact that there are no inter-personal or inter-

group conflicts in organization. There is an environment of mutual understanding amongst the

unions of the officers as well as employees. This is also due to the fact that the top management

takes keen interest in these matters.

PERSONALITY DEVELOPMENT

Personality means how people affect others and how they understand and view themselves as

well as their pattern of inner and outer measurable traits. The development of personality is a

continuous process by which children gradually acquire pattern of overt behavior, thinking

problem solving, emotions, conflicts and ways of coping with conflicts that will go to make up

their adult personalities.

Organization should give a great deal of attention in this regard. Suitable environment along with

other opportunities should be provided to the employees to understand themselves and to

evaluate themselves. It should also offer more refresher courses to both its officers and its

employees, inside and outside the country that will groom their personalities. They should be

taught how to use their knowledge and skill effectively in practice and how to plan their daily

work in a better way.

Organization should also introduce the following concepts, which will surely develop the

personality of its employees.

Job responsibility is given to the employees and a close check to see how people

respond to their employees.

Relationship of the employees with their clients and other persons.

Proper turnout of the employees, as it makes a significant impression on the

customers.

Regular checks to confirm that people abide by the rules.

Punctuality and regularity of the employees

INTER-PERSONAL RELATIONSHIPS

The success and prosperity of an organization depends upon its inter personal relationships.

There are pleasant relationships because people are getting high monetary rewards. High-level

officers work in close coordination with the middle level officers and the clerical staff in the

form of a team. In all the departments, different teams are formed comprising a high official.

There is a lot of interaction between the different levels of management.

Training Programs

All the training and recruitment policy for the employee is set by the Government of Pakistan.

All the officers appointed here come through the CSS. So the training is done on the selection of

the officers and later on some training programs are managed by the organization. Sometimes it

sends its employees to the foreign for the training. But the percentage of the officers is very low

who go abroad for training.

So organization has no recruiting policy. Some of the people are kept by the organization on the

contract basis but their limits are also mentioned by the Government.

Organization Hierarchy Chart

Admin Manager

Marketing Manager

Research and Development

OfficerShift Incharge

Production Manager

Dairy Supervisior

Number of Employees

Sapphire Dairies is part of the Sapphire Group which is one of the largest manufacturers and

exporters of textile products in Pakistan. Sapphire has over 14,000 employees with an annual

turnover US $ 550 Million, along with an asset base of over US $700 million.

Main Offices

Sapphire Dairies (Pvt) Ltd.

7-A/K, Main Boulevard,

Gulberg II, Lahore 54660, Pakistan

Different Departments Detail