PEL Export Marketing Strategy

Export Marketing-PEL
Pak Elektron Limited.

Global Marketing

Group Members
Umer Shahzad
Muhammad Usman
Hafiz Farhan Saleem
Umer Farooq
Sajjad Zafar Pirzada
Muhammad Umar Farooqi

17
20
28
45
52
145


Introduction
By Muhammad Usman Roll # 20

PEL is a flag bearer of Saigol Group

TURNOVER

EMPLOYEES

MUSD 2007-08

(Nos.)

TEXTILES

Kohinoor Industries
Azam Textile Mills
Saritow Spinning

31

1,678
500
569

ENGINEERING

Pak Elektron
Ltd.

232

7,036

FUEL & ENERGY

Kohinoor Power
Kohinoor Energy

86

98
137

349

10,018

SECTORS

COMPANY

TOTAL

PEL
Introduction
• Pioneer manufacturer of electrical goods in Pakistan
• One of the oldest and amongst the leading Home Appliances
Manufacturer and Distributor in Pakistan.
• The company has an annual turn over of Rs 20.3 billion.
• It was established in 1956 in technical collaboration with M/s AEG of
• Germany.
• In October 1978, the company was taken over by Saigol Group of
Companies.
• Since its inception, the company has always been contributing
towards the advancement and development of the engineering
sector in Pakistan.



Historical Overview



COMPANY
OPERATIONS

Company’s operations are divided into two divisions:
1) Power Division

2) Appliances Division


PEL Product Line


PEL Product Line

DISTRIBUTION TRANSFORMER

DRY TYPE TRANSFORMER

POWER TRANSFORMER

SWITCHGEAR

PMT TRANSFORMER


EPC CONTRACTING


CERTIFICATION

Source: www.pel.com.pk

Sales & Marketing

PEL HEIRARCHI

Power Division

Manufacturing

EPC Contracting

Sales & Marketing
Director
Operations

Appliances
Division
Manufacturing

Chairman
Managing
Director

Finance /
Accounts
Finance
Supply
Management
QA&QC

HRD / IR&A

Internal Audit



Management Level s
at PEL


MISSION
VISION
VISION
“To excel in providing engineering goods and services through continuous
improvement.”
MISSION STATEMENT
To provide quality products & services to the complete satisfaction of our
customers and maximize returns for all stakeholders through optimal use of
resources.
To focus on personal development of our Human Resource to meet future
challenges.
To promote good governance, corporate values and a safe working environment
with a strong sense of social responsibility

Exporting Countries
•
•
•
•
•
•
•
•
•
•

Afghanistan
Kingdom of Saudi Arabia
Swaziland
Greece
Kuwait
Kazakhstan
Bangladesh
Yemen
Nigeria
Hungry

Exporting Countries
- Saudi Arabia

- Kazakhstan

- Doha/Qatar Arabian Gulf - Yemen
- Abu Dhabi

- China

- Bangladesh

True reliable Partner Over
Decades

- Afghanistan

- Nepal

- Mombasa Kenya
- Greece
Kazakhstan

Shanghai

Athens, Greece


Explore New Markets


First Impression


Product Development

Export Relay Control Panel To Nigeria

External Factors By Umar Farooq


External Forces

• Economic Forces:
–
–
–
–
–
–
–
–

Devaluation of Currency
Interest Rate
Uncertain Economic Situation
Dumping Pricing.
Competition inside; China & Korea.
Competition outside; China, Korea, India & Turkey.
GST: 17%
Price Preference: 30% to the importing country.

External Forces

• Political, Legal & Govt. Forces:
–
–
–
–
–
–
–
–
–
–

Frequently Changes in tax laws
Unstable Political Environment
Energy Crisis
Local Rules: PPRA Rules.
International Rules: World Bank, ADB & JICA Rules.
“Lowest most responsive”.
No negotiations.
Bank Guarantee; 10% of Bid value.
Performance Guarantee; 10% of Purchase Order value.
Bound to Contractual agreements.

External Forces

• Technological Forces:
– New Products.
– Extended Services.
– New Emerging Markets.
– New Marketing methods.
– Supply Chain Management.
– Manufacturing Process & Techniques.


External Forces

• Social, Cultural, Demographic &
Environmental Forces
– Vary country to country

• Competitive Forces:
– More than 50 competitors.
– New Entrants.
– Low pricing.


SWOT ANALYSIS

OPPORTUNITIES
Expansion of Energy Sector
Increase in Population
Large Product Range
Globalization
Joint ventures, merger, acquisition or take over


SWOT ANALYSIS

THREATS
Strong Competition
Chinese Products
Grey Market
Devaluation of Currency
Obsoletion of Technology
Rapid Changes in Government Policies
New Entrants

Internal Factors
By Farhan Saleem Roll # 28

Management Function
Performed at PEL

Planning
Defining goals, establishing strategies to achieve goals, developing
plans to integrate and coordinate activities.

Organizing
Team formation of each dept with the help of team leader
Arranging and structuring work to accomplish organizational goals

Leading
 Proper vision and direction of team leader
Working with and through people to accomplish goals.

Controlling
Monitoring, comparing, and correcting work

PEL
SWOT ANALYSIS

STRENGTHS
ERP Based Company
International Certification
Strong Brand Image
Numerous Super Brand Award
State of the art plant
One of the largest
manufacturer
Strong R&D Department
Strong After Sales Service
Compliance of International
Standards

New Transformer Factory


PEL
SWOT ANALYSIS

WEAKNESSES
Financial Problem
Large overheads
High Prices
System Variation


Market Analysis
By Umar Shahzad Roll # 17

Major Competitors of Appliances Products

1-LG
2-Samsung

3-Siemens
4-Haier


Major Competitors of Power Products

1-Transformer:
2-Energy Meters:
3-Switchgear:
4-Power
Transformer:

5-EPC Project


BCG MATRIX

Question Mark
High

Power Transformers
Refrigerator

Instrument Transformer
Water Dispenser
Floor Standing

Cash Cow
Low

Market Growth

Distribution Transformers

Dog

Energy Meters
Switchgear Panel
Split AC

Generators
Washing Machine

High

Low
Market Share



Export Documents
Certificate of Inspection
Certificate of Insurance
Certificate of Origin
Certificate of Weight
Commercial Invoice
Consular Invoice
Customs Form CF349
Delivery Order/Dock Receipt
Forwarder's Export Invoice
Letter of Credit
Letter of Distribution
Loss and Damage Claim
Manufacturer's Certificate
Ocean Bill of Lading
Packing List
Phytosanitary Certification
Power of Attorney
Pro forma Invoice
Shipper's Declaration for Dangerous Goods
Shipper's Export Declaration
Automated Export System
Shipper's Letter of Instruction
Transmittal Letter
Additional Information Sources for Information about Documents


Export
400,000,000

207,242,587
150,000,000

2012

2013

Projected
2014


MARKETING
MIX


PRODUCT

Physical products vary in their potential for differentiation.

–
–
–
–
–
–

Features
Quality
Performance
Durability
Reliability
Reparability


PRICING STRATEGIES

– Different Price Range available
– Added Internal features & Accessories
– Penetrating Strategy for New Market
– Market Pricing Strategy for local market


POSITIONING STRATEGY
PEL position its products on following positioning strategies:
• By Attributes
– Environmental Friendly
– Losses Efficient
• By Competitors
– Different Ratings


PROMOTIONAL STRATEGIES

– Above the Line (ATL)

• Electronic
• Print
• Radio
– Below the Line (BTL)

•
•
•
•
•

Outdoor
POS material
Incentives
Giveaways
Sales Schemes


PRODUCT LIFE CYCLE

PEL Company

PEL Transformers

Sales and
Profits

Development

Sales and
Profits

Introduction

Growth

Maturity

Decline

Time

Development

Introduction

Growth

Maturity

Decline

Time


DISTRIBUTION

Distribution network of all companies is very strong in this industry

MANUFACTURER

EXPORTER

CONSUMERS

RETAILERS


CUSTOMER NEEDS

The basic needs desired by the target customers are as follows.
 Quality Product
 Product range (colors, sizes)
 Better Value for the price.
 Warranty
 Prompt and efficient after sales service


MARKET SEGMENTATION
& TARGET MARKET

Utilities of exporting countries


PROMOTIONAL ACTIVITIES

Displays and Contribution at Exhibition

Displays at Dealer Shop

Dealers Shop-board


ADVERTISING


Customers Interaction through
In greeting Cards
PEL always remember its customers on every special day.
EID DAY

23rd MARCH

New Year


Financial Analysis
By Sajjad Zafar Pirzada Roll # 52

FINANCIALS

•
•
•
•

Gross Sales

Gross Sales:
Net Sales:
Gross Profit:
Net Profit:

Rs. 20.3 Billion.
Rs. 17.7 Billion.
Rs. 3.60 Billion.
Rs. 0.12 Billion.

11%

Power
Division

Applianc
es
Division
89%


FINANCIALS


FINANCIAL ANALYSIS

Summary of the Liquidity Ratio Comparisons
Ratio

PEL

Industry

Current

1.32

1.26

Acid-Test

0.82

0.88

> Strong current ratrionand weak acid test ration

indicates a potential problemin inventories account.
> Note that PEL has a relatively high level of inventories.

FINANCIAL ANALYSIS

Summary of the Liquidity Trend Comparisons
> The current ration for PEL has been declining & slowly rising

at the same time acid test ratio first declining and slowing rising.

> The current ration for Industry has been declining & slowly rising

at the same time acid test ratio first declining and slowing rising.

> This indicates inventories are a problem for PEL

FINANCIAL ANALYSIS

Summary of the Profitability Ratio Comparisons
Ratio

PEL

Industry

Gross Profit Margin

22.8%

16.9%

Net Profit Margin

1.8%

2.8%

Return on Investment

1.5%

3.5%

Return on Equity

6.8%

13.7%

> PEL profitability ratios have ALL been falling since 2007.
Each except Gross Profit Margin below the industry average
for the past three years.
> This indicates that COGS and administrative costs may
both be too high and a potential problem for PEL.
> Note, this result is consistent with the low interest
coverage ratio.

FINANCIAL ANALYSIS

Summary of the Financial Leverage Ratio Comparisons
Ratio

PEL

Industry

Debt to Equity

2.07

2.29

Debt to Assets

0.44

0.58

Total Capitalization

1.09

1.77

> PEL debt utilization and assets supports to debt relative
to industry is low.
> PEL long term debts also less than industry.
> That shows PEL debts utilization possition is very low
as compare to industry.

FINANCIAL ANALYSIS

Summary of the Financial Leverage Trend Comparisons
> PEL debt utilization tred stuck down as compare to
industry and than slowly rise.
> PEL assets support to debt financing is slowly down but
much down as compare to industry.
> PEL long term debt utilization trend also down.


FINANCIAL ANALYSIS

SUMMARY OF RATIO ANALYSIS

1. Inventories are too
hihg.
2. A burden of financial
charges.
3. May be paying off creditors too
soon.
4. Selling , general and administrative costs may be
too high.
5. Less adminstrion performance.
6. Very poor profitability rates.

Strategies/Objectives
By Muhammad Umar Farooqi Roll # 145


Focus on Long term Goal


Defined Goals at PEL

Financial Goals
Target of reducing financial cost from 13%

Strategic Goals
Increase profitability and sales turnover
Increasing the product line


Plan at PEL

Strategic Plans
 Capture 10% more market share within next 2 years.
 To become the leading manufacturer of electrical goods in
Pakistan.

Operational Plans
 Introduce a wide range of Products.
 To achieve the desired targets with cost cutting
techniques.
 Efficient utilization of resources to maximize output.

Contemporary Issues
in Planning at PEL

Criticisms of Planning
 Main flaw in today's planning lies with the energy crisis
prevailing in the country.
 Due to its dynamic nature the changes in plans are very
frequent.

Effective Planning in Dynamic Environments
 Different plans including sales and production plans need to
be changed very often and is an ongoing process.
 Need to cater to market trends while planning and therefore
being static or fixed is of no use.

Objective

Strategic:
Increase our Export
Increase in production plant capacity
Retain local market share.
Lower production cost, not effecting the
quality.
Change in internal design.
Superior on time delivery
Superior customer services.

Objective

Financial:
Lower factory overheads.
Minimize liquidated damages on late
delivery.
Maximize profits.


Recommendations

1. They should retire their expensive loans.
2.They should carefully study their competitors.
3.As mentioned earlier company’s liquidity position is dismal. So they need to
pay off their short term loans.
4.Their operating cost is very high so they should control their operating
expenses.
5.There should be a continuous monitoring of performance. When performance
deviates from plans one does not have to wait for the next periodic review to
correct it. The supervisor and subordinate should discuss the situation
immediately so the corrective actions can be taken at once in order to avoid the
major disasters.
6.Whether performance appraisal discussions are held monthly, quarterly,
annually appraise should be clear about what he/she is doing right and wrong
,and how he/she can overcome there deficiencies for the future appraisal.
7. Performance appraisal should be conducted in a way that employee should
not perceive it as a fatigue or threat for there job but it should take it as an
opportunity to add or contribute more value in work of there organization

Distribution Transformer Plant


Question and Answer


References

•
•
•
•

www.pel.com.pk
www.wikipedia.com
www.slideshare.com
https://www.google.com.pk



PEL Export Marketing Strategy

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