Sales & marketing of national and multinational companies in Pakistan
May 15th, 2012 by Rai M Azlan
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Guest post by ASRAR AHMAD QURESHI
Sales and marketing in Pakistan is entirely different from rest of the world. Before launching any product, mostly MNC launch their product with big bang. They provide complete media back up such as electronic media, print media, POS material, Above The Line & Below The Line activities. On the other side, the national companies dont go to that extent. They would launch the product by providing POS material and little bit media back up(elctronic and print). There is cut throat competition in the market, but mostly all the companies in Pakistan believe in pressure selling. They dont create pull but always push strategy. The field force is always under pressure, because they are given unrealistic targets. In order to achieve the targets and to get the incentive from the company, they always pressurise the distributor to place the order according to the target. The distributor reluctantly places the order and just to exhaust the stocks, he allows extra commission to the whole salers. The impact of unjustified passing commission results in very low ROI (return on investment) Due this strata companies are facing problems in getting professional distributors, and what to talk about national companies.
The other big problem in Pakistan is that all the national and multinational companies supply direct stocks to super chain of stores such as CSD, USC, Metro Cash and Carry. The aforementioned super store get stock on credit or on consignment account basis. It is very disgusting because the distributor faces hell of problem in selling his product because these super markets sell on lower rates.
Another interesting situation is that local manufacturers hire professionals for sales and marketing, but they rarely pay any attention to their ideas and suggestions. They poke their nose in every department and they dont listen to anybody. When the product gets out of market or is totally flopped, the blame goes, eventually to sales and marketing professionals.
I was working as a sales manager in a famous industrial group of Pakistan and was responsible for the sales of edible oil.Our marketing manager resigned due to some problems with managing director, and his American wife who was also present in the meeting, said to her husband” why dont you appoint me your marketing manager”and to our astonishment she was appointed. It can be judged that what would have happened to the product.In an other company the advertisement on TV was under consideration and the advertising company was giving different ideas. Suddenly one of our director rose and said ” i have a brilliant idea” what is that? asked everybody, He said that tiger is going to hunt a deer in a jungle, the tiger dives to grab the deer, but deer escapes and the tiger picks that product which was lying over there. Everybody kept quite, and he thank God he did not insist.In a biscuit company solvent was transferred in outer packing of the biscuit,and the taste of the biscuit was slightly changed.I told the director not to sell this product, but in my absence all the stocks were sold.The result was that after sometime all the stocks became rancid and soggy.The company suffered a loss of 3 million rupees.The main problem with local manufacturers is lack of planning, because proper planning prevents poor performance.
As far as the ice cream, cold drinks, juices and yoghurt business is capital intensive projects.These companies have to provide free deep freezers and vertical refrigerator.The companies mostly depend on wholesale business and less in retail business. At present the ratio is 70% and 30% respectively. Any it is getting better day by day, because now most of the companies have started sharing van distribution expenses, DSF (distributor sales force)
- The retailer specially A and B class outlets behave very strangely. The want maximum commission, free 12+1 trade offer or free sampling.
- They will expect display charges from the company.
- Would like to have credit for at least 15 days.
- Stocks are not displayed on FIFO(first in first out) basis.
- They purchase only those products which has hype in the market and flatly refuse to buy new or slow moving products.
Counterfeit and infringement of the products is very common in Pakistan markets.The retailers and wholesalers take full advantage.Because they handsome profit.
Mr. Asrar Ahmad Qureshi is a freelance writer. He ha over 30 years of work experience in the area of sales and marketing in leading FMCG and retails organisations in Pakistan.