Report on Fruiticana Foods and Beverage Company

Internship Report on

“FRUITICANA FOODS” Lahore, Pakistan

“Wazir Muhammad Anjum” 2012-KIUSKD-769

Management Science MBA (Marketing) Session: 2012-2015

Department of Business Management Karakoram International University, Skardu Campus (www.kiu.edu.pk)

Internship Report on

“FRUITICANA FOODS” Lahore, Pakistan.

This Internship Report is submitted to the Department of Business Management in partial fulfillment of the requirement for the degree of Masters in Business Administration (MBA Marketing).

September, 2015

Department of Business Management Karakoram International University Skardu Campus

Internship Report on

“FRUITICANA FOODS” Lahore, Pakistan.

Supervisor

Mr. Ibrahim Hussain Lecturer, K.I.U Skardu Campus 12th September, 2015

Internship Report

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2015

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DEDECATION

My humble efforts during the internship and preparation of this report is dedicated to my “Loving Parents” Without of their endless support and sincere prayers this was not possible.

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PREFACE Student life is a period of preparation for the upcoming future. In this period one is expected to make all around developments of mental, moral and physical. Life is a struggle and kind of battle. The internship is to stuff the brain with all sorts of facts and formulation. Internship program provides a golden opportunity to the students through which they can expose themselves to the environment of practical learning in organizations that enables them to develop and enhance their capabilities and skills and help lot in the practical life afterwards. After ceaseless efforts, it is a matter of great satisfaction for me to finally see my final internship report in my hands. This report is collection of our observations, study and experience during our internship period.

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ACKNOWLEDGEMENT First of all I would like to thanks almighty ALLAH, who’s blessings helped me to get through this report safely, the one who was always there when no one was! Would that I have words to pay tribute to my loving parents and teachers whose invaluable prays salutary admire and embodying attitude kept my spirit alive to strive for knowledge and integrity which enable me to reach milestone. I would also like to express enormous gratitude to my respectable teacher and supervisor “Mr. Ibrahim Hussain” for providing the direction and supervision, all scope of this project and for helping me in refining my efforts and ideas. I also acknowledge the help and pleasant gathering of all my cousins,

friends

and

fellows

which

really

helped

me

in

accomplishing my report.

(Wazir Muhammad Anjum)

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Contents DEDECATION ..................................................................................................................................... i PREFACE ............................................................................................................................................ii ACKNOWLEDGEMENT ....................................................................................................................... iii List of Figure, Chart and Table .......................................................................................................... vii List of Acronym ................................................................................................................................ vii Executive Summary......................................................................................................................... viii Chapter 01 .........................................................................................................................................1 OVERVIEW OF THE ORGANIZATION ....................................................................................................1 1.1 Brief History ........................................................................................................................................ 1 1.2 Introduction ........................................................................................................................................ 1 1.3 Organization’s Policies ........................................................................................................................ 3 1.4 Major Competitors .............................................................................................................................. 3 Chapter 02 .........................................................................................................................................5 ORGANIZATIONAL STRUCTURE ...........................................................................................................5 2.1 Organization Hierarchy Chart ............................................................................................................. 5 2.2 Number of Employees ........................................................................................................................ 6 2.3 Main Offices ........................................................................................................................................ 6 2.4 Introduction of all Departments ......................................................................................................... 6 2.4.1 Finance Department .................................................................................................................... 6 2.4.2 Human Resource Department ..................................................................................................... 7 2.4.3 Business Development Department ............................................................................................ 7 2.4.4 Procurement Department............................................................................................................ 8 2.4.5 Marketing and Sales Department ................................................................................................ 8 Chapter 03 ....................................................................................................................................... 10 STRUCTURE OF THE MARKETING DEPARTMENT ................................................................................ 10 3.1 Department Hierarchy Chart ............................................................................................................ 10 3.2 No. Of Employees in the Department ............................................................................................... 11 Chapter 04 ....................................................................................................................................... 12 MARKETING OPERATIONS ................................................................................................................ 12 4.1 Customer Demand ............................................................................................................................ 12

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4.2 Market Trends ................................................................................................................................... 13 4.3 Competition Movement ................................................................................................................... 13 4.4 Quality Assurance Process ................................................................................................................ 14 Chapter 05 ....................................................................................................................................... 15 FUNCTIONS OF THE MARKETING DEPARTMENT ................................................................................ 15 5.1 Marketing Strategy ........................................................................................................................... 15 5.2 Product strategy................................................................................................................................ 16 5.3 Pricing Strategy ................................................................................................................................. 16 5.4 Distribution Strategy ......................................................................................................................... 16 5.5 Channel of distribution of Fruiticana Foods...................................................................................... 17 Chapter 06 ....................................................................................................................................... 18 CRITICAL ANALYSIS .......................................................................................................................... 18 Chapter 07 ....................................................................................................................................... 20 INTERNSHIP PROGRAM .................................................................................................................... 20 Chapter 08 ....................................................................................................................................... 21 TRAINING PROGRAM ....................................................................................................................... 21 8.1 Project ............................................................................................................................................... 21 8.1.1 Where do Fruiticana stands today in market against competition? Detailed evaluation of prices, quality, positioning and also give your valuable suggestions on these points. ...................... 22 8.1.2 What we are doing good and what are area for improvement? ............................................... 25 8.1.3 How can we double increase our sales in next one year time? Give recommendations. ......... 26 Chapter 09 ....................................................................................................................................... 27 CRITICAL ANALYSIS .......................................................................................................................... 27 Chapter 10 ....................................................................................................................................... 29 SWOT ANALYSIS............................................................................................................................... 29 10.1 Strength........................................................................................................................................... 29 10.2 Weaknesses .................................................................................................................................... 30 10.3 Opportunities .................................................................................................................................. 30 10.4 Threats ............................................................................................................................................ 31 Chapter 11 ....................................................................................................................................... 32 FINDINGS......................................................................................................................................... 32 Chapter 12 ....................................................................................................................................... 33

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RECOMMENDATIONS ....................................................................................................................... 33 Chapter 13 ....................................................................................................................................... 34 CONCLUSION ................................................................................................................................... 34 References....................................................................................................................................... 35

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List of Figure, Chart and Table Figure 1 Introduction .................................................................................................................................... 2 Figure 2 Finance Department ....................................................................................................................... 6 Figure 3 H.R Department .............................................................................................................................. 7 Figure 4 Business Development Dept ........................................................................................................... 7 Figure 5 Procurement Dept .......................................................................................................................... 8 Figure 6 Marketing & Sales Dept .................................................................................................................. 8 Figure 7 No. of Employees .......................................................................................................................... 11 Figure 8 Customer Demand ........................................................................................................................ 12 Figure 9 Market Trend ................................................................................................................................ 13 Figure 10 Competition Movement.............................................................................................................. 13 Figure 11 Strengths ..................................................................................................................................... 29 Figure 12 Weaknesses................................................................................................................................. 30 Figure 13 Opportunities .............................................................................................................................. 30 Figure 14 Threats ........................................................................................................................................ 31 Chart 1 Hierarchy Chart ................................................................................................................................ 5 Chart 2 Marketing Dept Hierarchy .............................................................................................................. 10 Chart 3 Channel of Distribution .................................................................................................................. 17 Table 1 Competitive Analysis ...................................................................................................................... 19

List of Acronym CEO

Chief Executive Officer

R.S.M

Regional Sales Manager

A.S.M

Area Sales Manager

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Executive Summary One of the most important aspects of having an internship is to get a clear picture of how people really work with the fields that we study. Internship is all about getting some practical knowledge, to complete and sometimes contrast all of the theoretical comprehension that we have accumulated during our years of studying. In my experience, an internship can give some very useful experiences and work as a preparation for future professional life. I got place for my internship at Fruiticana foods. My internship program was started from 30 th March 2015 and ends on 31st May 2015. In these two months I was given different tasks. I spent almost one month in Carton pack factory where I supervise the production of Carton pack, Batch testing, Packing process, Handling dispatches, Raw material demand process and Stock taking while the rest of the days I spent in market from where I got information to complete my task of “Market research on current status and provide strategies for future growth”. Fruiticana foods is a food and beverage company and has always been dedicated to the health and interests of customers and to this end, keeps introducing delicious and healthy food and beverage products. The products of Fruiticana foods are Fruiticana juices, Fruiticana sachet pack and Fruiticana pulp. Fruiticana Foods was established in 2009, having a small manufacturing unit of pet bottle juices and Head Office in Lahore. The CEO and the owner of this venture is Syed Montazer Mehdi. Fruiticana is available in Pet bottle (250, 500 and 1000 ml) and in Carton Pack (250 and 200 ml). Fruiticana is available in 10 different flavors. The flavors of Fruiticana juices are Orange, Apple, Red Grapes, Lychee, Peach, Pineapple, Mango, Lemon, Pomegranate, and Guava. The major competitors of Fruiticana are Fruitine, Maza, Vivo, Fresher, Shezan, Country, Tops, Slice, and Fruita Vital. The customer demand for Fruiticana is good enough. The organization some time fails to fulfill the demand on time

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because of the huge demand and low capacity of production. The trend of using packaged fruit juices in Pakistan is getting famous day by day, because of the change in life style, massive migration from rural to urban areas and population growth etc. The marketing strategy of Fruiticana Foods was developed to position its products in the mind of customers by providing high quality products in reasonable price and by distributing the product on a mass level to maximize its profit. Fruiticana is offering good products in marginally low price as compare to the competitors; therefore they are getting fame in market. Fruiticana is far away from their competitors in promotional activities. They didn’t promote their products but because of their strong and active sales force they are successful to grasp the attention of the customers which leads to increase in the sales volume of the company. Distribution strategy is the key element of every marketing strategy because it will helps the organization expand its reach and grow sales. The distribution channel of Fruiticana foods is simple because they sell their products to the registered distributors and the distributors are responsible to sell them in market. Company gets free when the products sell to the distributors. The market analysis and the sales of last 04 years shows that there is a continuous increase in sales and demand of the products, which shows that the products are good and marketing strategy is leading the organization towards right direction. People are unaware about the brand but still the sale of company is satisfactory and this is because of the highly motivated sales team which is working in market to enhance the revenue of the organization. If Fruiticana foods adapt intensive strategies like market development and market penetration they can easily capture a huge market share in no time.

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Chapter 01 OVERVIEW OF THE ORGANIZATION 1.1 Brief History Fruiticana Foods is a private venture. It is a food and beverage company and has always been dedicated to the health and interests of customers and to this end, keeps introducing delicious and healthy food and beverage products. The products of Fruiticana foods are Fruiticana juices, Fruiticana sachet pack and Fruiticana pulp. Fruiticana Foods was established in 2009, having a small manufacturing unit of pet bottle juices and Head Office in Lahore. The CEO and the owner of this venture is Syed Montazer Mehdi. He did his MBA (Marketing) in 1993 and starts his professional life. After spending his 16 golden years in different organizations at different designations he started his own business and named it as Fruiticana Foods. Fruiticana Foods organizational culture is built on 5 main pillars i.e. Innovation, Quality, Service, Trust and Humility. Since last 6 years they are striving to uphold these organizational values. These values have been detrimental in the quick and sustainable success of Fruiticana Food’s core brand “FRUITICANA JUICES”. Fruiticana is available in Pet bottle (250, 500 and 1000 ml) and in Carton Pack (250 and 200 ml). Fruiticana is a brand which customer intent to buy, due to its attractive outer packaging and unmatchable taste. The value for money which this brand carries has helped it gain a vast popularity in a very short span of time. Today “FRUITICANA” is considered to be a cherished juice brand wherever it is present in the world. Along with having its presence in 150 cities of Pakistan, it is now available in 10 European countries. (Fruiticana Foods, 2015)

1.2 Introduction “FRUITICANA” is a brand name of Fruiticana Foods. Fruiticana starts its journey with only two flavors in pet bottle and with a small team and nowadays there “K.I.U Skardu Campus”

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are 10 flavors of Fruiticana juice. In the very next year it got a great response from local market because of the great quality and reasonable price. They introduced these flavors due to consumer variations not only in taste, rather also in the lifestyle, the flavors of Fruiticana juices are: 

Orange



Apple



Red Grapes



Lychee



Peach



Pineapple



Mango



Lemon



Pomegranate, and



Guava Figure 1 Introduction

Fruiticana Foods is headed by a team of seasoned professionals from all walks of business like Finance, Manufacturing, Sales & Marketing, Human Resource and “K.I.U Skardu Campus”

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Product Development. Since its commencement, Fruiticana Foods success has been associated with product improvement, innovation and consumer oriented. They have penetrated in the local Juice market and have extended their arms in the export markets significantly. Company’s priority is to bring the best and most relevant products to people, whoever they are, whatever their wants, throughout their lives, therefore Fruiticana is growing day by day and they are continuously working to maintain its position in the market.

1.3 Organization’s Policies The basic policy of the organization is to provide quality products and do not compromise on quality of the product. Other policies of Fruiticana Foods are: 

Procurement policy



Recruitment and selection policy



Equal opportunity policy



Capability and performance policy



Performance appraisal procedure and policy



Claiming expenses policy



Quality control, and



Dignity at work like Harassment and Bullying policy.

All the employees are strictly following the organization’s policies. The CEO and Managing Director Sales and Marketing ensure the implementation of the policies and takes quick action where needed.

1.4 Major Competitors Juice and beverages industry is extremely competitive. The companies have to compete against local, regional and global manufactures on various factors including quality, price, variety, availability and distribution. The major competitors of Fruiticana are: 

Fruitine



Maza

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Vivo



Fresher



Shezan



Country



Tops



Slice, and



Fruita Vital

2015

Some of these juices are very good in quality and some are famous in market because of their reasonable price. The distributions of some brands are awesome and some brands have a range of variety. Fruiticana is a quality brand having a large variety of flavors in competitive price; its distribution is also good but still needs to improve its reach to the untapped areas. Competitors are spending a handsome amount of sales on their promotional activities while Fruiticana is not doing anything for promotion, neither a single advertisement is on aired till yet and nor a single advertisement published in any newspaper or magazine. Just a single poster cannot aware and stimulate people. People are unaware about the brand but still the sale of company is satisfactory and this is because of the highly motivated sales team which is working in market to enhance the revenue of the organization.

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Chapter 02 ORGANIZATIONAL STRUCTURE 2.1 Organization Hierarchy Chart Chart 1 Hierarchy Chart

C.E.O

Finance Manager

Business Dev Manager H.R Manager

General Manager Sales & Marketing

Director Procurement

Office Assistant

R.S.M Production Manager Carton Pack

Factory Staff

Production Manager Pet Bottle

A.S.M

A.S.M

R.S.M

A.S.M

A.S.M

A.S.M

Sales Teams of Different Region

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2.2 Number of Employees There are 60 employees working in Fruiticana Foods other than factory staff. In both production units there are numbers of employees working on daily wages that’s why they are not included in Fruiticana Foods permanent employees. Organization strongly follows the government policies for the betterment of the employees and workers.

2.3 Main Offices Fruiticana Foods has two main offices, first one is the head office located at Multan Road Lahore and the other one is regional office located at G-8 Markaz Islamabad. There are two production units and two sub offices in both factories.

2.4 Introduction of all Departments There are five main departments and employees are divided in these five heads, which are, Finance department, Human resource department, Business development department, Procurement department and Marketing and Sales department. Every department works in their premises and takes minor decisions according to their own jurisdictions. Every head of department is directly reported to the CEO.

2.4.1 Finance Department Finance

is

the

back

Figure 2 Finance Department

bone

of

any

organization. Finance Manager handles the finance

department.

Apart

from

basic

record keeping he is responsible to provide information to assisting the managers to take strategic decisions, further more he is solely responsible for all day to day accounting transactions,

financial

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records,

cash

receipts

and

payments,

salaries

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disbursement, raw material purchases and imports and deals with all the financial documents during export. He also manages the organizations cash flow and ensures the availability of funds to meet the daily payments. This department also works with the managers in preparation of organizational budget and forecast, and to report about the outcomes throughout the year.

2.4.2 Human Resource Department

Figure 3 H.R Department

Human resource is the king of all resources, because it utilizes all other resources of the organization. It is one of the most valuable resources of every organization. The efficient human

resource

department

will

surely

provide the organization with the capability and structure to meet with the organization’s goals and objectives by managing its human resource. Human resource manager is responsible for selection and recruitment of right person for the right job at right time. He ensures the timely availability and also checks their attendance etc. Human resource department also responsible for the position arrangement, grading and performance appraisal review at the end of every fiscal year. Office assistant and HR manager at the end of the month compile all attendances and salary deductions where needed and forward to finance manager and finance manager disburse the said amount to their respective accounts.

2.4.3 Business Development Department Business

Development

Manager’s

Figure 4 Business Development Dept

key

responsibility is based on research by utilizing media, study of different business reports; identifying market trends, market potentiality

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and new opportunities. He is responsible for making new business relationship with prospects and also retains the existing customers. Business development manager prepares policies to develop the business by increasing exports to new countries. Both production managers are responsible to provide business development manager details about the production so that he takes orders from international market.

2.4.4 Procurement Department

Figure 5 Procurement Dept

Director procurement is responsible for purchases of raw materials for production from the right place at right time and on right price. After purchase the timely delivery to the concern department is also his duty. Production managers send the list of raw materials needed to director procurement and the director procurement made purchases against the orders. He ensures the best quality raw material and also keeps in mind the price of raw materials so that they can control over the cost of the products.

2.4.5 Marketing and Sales Department

Figure 6 Marketing & Sales Dept

Managing director sales and marketing is doing

lots

of

tasks;

he

handles

all

marketing activities including production, pricing, promotion and placement. He is the

front

face

of

organization.

The

managing director sales and marketing is responsible to identify the need, want and demand of the customer and to identify the market trend and the current market position of the organization. He takes a

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deep look on the competitors and takes timely decision to compete in the market. The Managing director sales and marketing communicates with all members of the organization to find out the best way to achieve organization’s goals and objectives. He also handles the Research and Development department and continuously working to bring innovative products in market. After CEO, Managing Director sales and marketing is the key person in the organization. He takes timely decisions where needed. The organization structure of Fruiticana foods is straight and simple. Everyone is cleared about his jurisdictions, duties and responsibilities. Decision makings are made in democratic way and top level management appreciate everyone on providing their ideas during decision making.

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Chapter 03 STRUCTURE OF THE MARKETING DEPARTMENT 3.1 Department Hierarchy Chart Chart 2 Marketing Dept Hierarchy

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3.2 No. Of Employees in the Department Figure 7 No. of Employees

As we know that marketing and sales department is the revenue generation department, so companies give special emphasis on this department. If marketing and sales department works correctly than the organization will surely earn profit and achieves its goals and objectives. There are 52 employees working under the Managing Director Sales and Marketing. They are categorized in different heads. The goal of every head is same, to generate sales and increase the profit of the organization. There are 02 Regional Manager, 05 Area Manager, 40 Sales Officers and 05 Sales men. Regional managers are responsible to enhance sales in their region in coordination with area managers. Regional managers directly report to the Managing director Sales and Marketing. Every area manager reports to regional manager while sales officers and sales men are responsible to report their area managers.

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Chapter 04 MARKETING OPERATIONS 4.1 Customer Demand

Figure 8 Customer Demand

The customer demand for Fruiticana is good enough. The organization some time fails to fulfill the demand on time because of the huge

demand

and

low

capacity

of

production. The response from domestic and international market is good for Fruiticana. As Fruiticana is involve in Business to Business transactions, so the main customers of Fruiticana are the whole sellers and distributors, but the main focus is on the end consumers. Every organization develops products for the end users so they research on end users’ taste, choice, trend, and their purchase behavior. Demand for Fruiticana is high because they continuously working on consumers’ response and their behavior. Customer demand for Fruiticana is increasing day by day. The annual sale of Fruiticana in 2013 was Rs. 598,538,000 which increases in 2014 up to Rs. 910,796,000, which shows a rapid increase of 35% in customers’ demand. CEO and other staffs are optimistic about 2015 sale as well. CEO said that, “Although the demand in month of March was not as high as it was in 2014 but the sale of April and May was too high, so we are optimistic regarding our sale and hope for the best”.

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4.2 Market Trends

Figure 9 Market Trend

The trend of using packaged fruit juices in Pakistan is getting famous day by day, because of the change in life style, massive migration from rural to urban areas and population growth etc. Before few

year

people

were

fresh juices prepared

at

used home

to but

consume as

we

mentioned earlier that because of change in life style

they

started

to

move

towards

packaged juice. The other reasons of growing market trend are; opening of new hotels, restaurants and hospitals, where these juices are marketed successfully, further more the rapid growth in fruit market is because of the removal of custom and excise duty on fruit juices which also increased their export. The export of fruit juices increased from 24.41 tons worth Rs. 15.58 billion in the era of 2009-10 to 50.45 million tons worth Rs. 3.65 billion in the period of 2011-12 and it continues increasing with every passing day. (Aaj News, 2013)

4.3 Competition Movement

Figure 10 Competition Movement

The major competitors of Fruiticana are Fruitine, Maza, Vivo, Fresher, Shezan, Country, Tops, Slice, and Fruita Vital. Some of these juices are very good in quality and some are famous in market because of their reasonable price. There is an intense competition among all but Nestle and Shezan are the market leaders in Pakistan, both of them captured a

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huge share of local market. The companies have to compete against global, regional and local manufactures on various factors including price, quality, variety, availability and distribution. Mostly people attract on these two elements price and quality, and if the company focuses on both dimensions than people will surely attract towards them. There is an intense competition in promotion as well but in promotion Fruiticana is far away from its competitors, because the competitors are spending a handsome amount of their sales on promotion while Fruiticana is not doing any promotion and this is the reason because of which people are unaware about the brand, its high quality and price etc. Other companies are competing with each other in promotion, and at the end promotion is the main element which aware customers and prospects and stimulates them to purchase their products. Fruiticana needs to move with its competitors and should spend some amount in promotion sector.

4.4 Quality Assurance Process Fruiticana gives emphasis on its quality and don’t compromise on it. There is Quality assurance checkup after every purchase of raw material, during manufacturing and after production batch testing, if they found any error and quality issue than they return the raw materials immediately, and if they found any quality issue after production then immediate dispose of the whole batch, so that only best quality products are marketed in the market. This emphasis on quality includes them in the top raked juices in the market.

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Chapter 05 FUNCTIONS OF THE MARKETING DEPARTMENT 5.1 Marketing Strategy The marketing strategy of Fruiticana Foods was developed to position its products in the mind of customers by providing high quality products in reasonable price and by distributing the product on a mass level to maximize its profit. After segmentation on geographical and demographical basis, Fruiticana is currently targeting all age of customers of Punjab, Khyber-Pakhtunkhwa and Gilgit-Baltistan. They are offering a good product in marginally low price as compare to the competitors; therefore they are getting fame in market. Fruiticana is far away from their competitors in promotional activities. They didn’t promote their products but because of their strong and active sales force they are successful to grasp the attention of the customers which leads to increase in the sales volume of the company. Distribution strategy is the key element of every marketing strategy because it will helps the organization expand its reach and grow sales. Distribution channel also helps in communication from organization to end user and from end user to organization. Organization can get information about the changing behavior of the consumer; their taste and willingness; by utilizing all these information company takes decisions regarding product quality, features and price etc. The distribution channel of Fruiticana foods is simple because they sell their products to the registered distributor and the distributors are responsible to sell them in market. Company gets free when the products sell to the distributors. There are seven distributors in Lahore and every distributor has given targets which they have to meet by utilizing their sales force. Distributor can earn more profit by selling more products of Fruiticana so they work hard to earn maximum profit. Fruiticana also give incentives on target completion which motivates the distributors to work efficiently.

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5.2 Product strategy Product strategy consists of product planning, development and management. The management worked hard to develop quality product, they have their special formula because of which they are succeed to introduce tasty and healthy juice. Currently Fruiticana is selling 10 flavors of fruit juice, which shows the management’s commitment with the customers. They have introduced these flavors according to the demand and changing taste of the customers. High quality assurance is their priority and for that they purchase high quality raw material and quality control through lab testing before and after production. To facilitate customers Fruiticana produce products in different sizes like in Pet bottle there are 03 sizes available in market they are; 250 ml, 500 ml and 1000 ml while in Carton pack juice there are 02 sizes available in market they are 200 ml and 250 ml.

5.3 Pricing Strategy Pricing strategy plays very important role to acquire market share where giant competitors are already working and moving ahead. Price of the product is one of the main elements of marketing mix. Companies often compete in the market on prices of their products. Fruiticana is currently using the cost base strategy, and they are charging a very nominal additional amount on their cost. Fruiticana believes that the moderate price for a good quality product helps them to attract more customer, as many of our customers are price conscious. They are working to reduce their variable cost, so that they can earn more profit without raising the price of product.

5.4 Distribution Strategy To assure the availability of the product in market Fruiticana established an effective channel of distribution. The distribution channel of Fruiticana foods is simple because they sell their products to the registered distributors and the

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distributors are responsible to sell them in market. Company gets free when the products sell to the distributors. These distributors purchase Fruiticana juice in bulk amount and then sell them in the market by utilizing their sales force. There are seven distributors in Lahore and every distributor has given targets which they have to meet by utilizing their sales force. Every distributor has 4 to 5 sales officers which visits the markets on daily basis and meets with the retailers. The sales representatives are hired by the distributor itself but two of them are paid by the organization and rest of the sales representatives are paid by the distributors themselves. Distributor and sales representatives get incentives on target completion. We can say that Fruiticana is entering in the market with traditional channel of distribution. The distribution channel starts from the company and ends on final consumers. The distribution channel plays the role of bridge between consumer and organization, they can get information about the consumers taste, want, behavior, market trend and consumers complains about different products, so making a good relationship with distributors and retailers are always in benefit of the organization. It will help to reduce research cost as well.

5.5 Channel of distribution of Fruiticana Foods Chart 3 Channel of Distribution

Producer Distributor/Whole seller

Retailer

Consumer “K.I.U Skardu Campus”

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Chapter 06 CRITICAL ANALYSIS The market analysis and the sales of last 04 years shows that there is a continuous increase in sales and demand of the products, which shows that the products are good and marketing strategy is leading the organization towards right direction. The beverage industry is growing year by year, which is an opportunity for the organization. The market trend is changing from home made juices towards packaged juices, and the total sales volume of packaged juices in both domestic and international market is increasing. In last 04 years they are succeed to capture new domestic and international market as well. In August 2012 Fruiticana Foods faced a problem in its Mango (250 ml) carton pack juice, which were used too blown after few days of distribution but the quick response from the marketing heads solve that issue, the issue was raised because of the little change in previous formula. Fruiticana officials disposed all the defected batches efficiently and delivered new products to the market. In May 2014, Fruiticana Foods were reported from 3 distributors of Lahore that the color of Guava (250 ml) pet bottle juices change after few days of delivery. Fruiticana officials along with the lab team reached those areas where the problem was raised. They have found that the problem was only in the same batch products and after a thorough study they concluded it that, juices need at least 72 hours to set well, those products were delivered immediately after its production that is why they had to face that issue, later on all the distributors were delivered new products. The major competitors of Fruiticana are Fruitine, Maza, Vivo, Shezan, Fresher, Country, Tops, Slice and Fruita Vital. Some of these juices are very good in quality and some are famous in market because of their reasonable price. Fruiticana is competing with them in both quality and price, so need to maintain “K.I.U Skardu Campus”

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its quality and sustain its price so that they captured a huge market share and a strong position against its competitors. Fruiticana foods is going to construct two new factories in Lahore so that they can increase their production level and capture more domestic and international market share. Table 1 Competitive Analysis

Brand Name

Quality

Reach

Distribution

Promotion

Best

Better

Best

Excellent

Better

Best

Good

Best

Best

Good

Best

Fair

Fruitine

Good

Better

Good

Good

Tops

Good

Better

Better

Good

Vivo

Good

Good

Better

Better

Fresher

Good

Good

Fair

Better

Slice

Best

Better

Better

Best

Maza

Better

Good

Better

Better

Country

Good

Fair

Good

Good

Nestle’

Fruita

Vital Shezan Fruiticana

Fair

, Good

, Better

“K.I.U Skardu Campus”

, Best

, Excellent

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Internship Report

Chapter 07 INTERNSHIP PROGRAM My internship program was started from 30th March 2015 and ends on 31st May 2015. In these two months I was given different tasks. I spent almost one month in Carton pack factory where I supervise the production of Carton pack, Batch testing, Packing process, Handling dispatches, Raw material demand process and Stock taking while the rest of the days I spent in market from where I got information to complete my task of “Market research on current status and provide strategies for future growth”. The carton pack factory is not owned by Fruiticana foods they are producing juices in this factory by purchasing production hours from the factory owner. This factory is owned by Amrus Foods. In this Factory 15 different companies produce their products. Every company has their offices in the premises of the factory. 50 workers worked in this factory in two shifts on daily wages and the wages are paid them by factory owners while the producing companies paid the factory owners on hourly basis. There is a proper system of stock taking and factory provides space for the companies to store their finished goods until they have dispatched. The owner of the factory provides the companies proper place to stock their goods as well as their raw materials. The factory is equipped with modern technology and the factory owners take good care of cleanliness of the factory. At the end of every day factory owners check their record and tally them with the stock which makes the producing company’s feeling secure. The factory follows the rules and laws given by government of Pakistan like the minimum wage rate, no underage worker, and proper system for female workers etc.

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Chapter 08 TRAINING PROGRAM As my specialization is in Marketing so my concern department was marketing. I worked with production and marketing team. Company provides training to every new hired employee by their seniors and experienced members. As job training is very important for productivity and motivation. Training programs expand the knowledge of employees regarding his job. Trained employees are able to better perform their jobs. The Fruiticana Foods is concern about training. I saw that the new sales officers are attached with the experienced employees for two weeks; during these two weeks they get a detail orientation about the organization, their products, hierarchy, co-workers and also observe how to deal with the retailers and how to convince new retailers etc. After these two weeks of training they start their work and visit the markets individually.

8.1 Project I was thinking that my internship will be based on observational knowledge and learning, while the reality was extremely changed. They started my internship with orientation sessions, and every department provided me ample information about their works, roles and responsibilities. After the detailed orientation of the departments they attached me with the production manager of carton pack juices Mr. Ahsan Jamal. He takes an orientation session and introduced me to his workers and office staff. He told me visit the factory daily. He shows me the production process of juices and told me everything about the production, before and after production testing, raw materials used, formula of the product, dispatching process, import documents and the process of raw material imports etc. After spending few days as observer in factory he told me to handle the production just to test my knowledge about the production and raw materials usage. I took that challenge and produced 5 batches of juice, I also did the

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before and after production batch test and the results were accurate. After that day he gave me charge to handle all the matters of production. After spending one month in production factory the CEO gave me a project consists of three questions, questions were;

8.1.1

Where

do

Fruiticana

stands

today

in

market

against

competition? Detailed evaluation of prices, quality, positioning and also give your valuable suggestions on these points. Fruiticana Juice is the core brand of Fruiticana Foods. To know the current status of Fruiticana in market I conducted market research in which I met with distributors, retailers, sales team and end consumers of Fruiticana as well as the general public. Research was mainly based on observation, in which I tried to observe the consumer behavior and purchase pattern of consumer. I also took informal interviews from the distributors and retailers, and conduct group discussions with sales team to know about the problems they are facing in market. The task given to me by the officials of Fruiticana Foods was to find out the current position of Fruiticana in the competitive market where numbers of beverage companies are there and trying to capture maximum market share. The core benefit of Fruiticana and other beverages are to satisfy the need of thirst and provide refreshment especially in hot summer season. The culture plays a major role in making consumer want because of culture, geographic area and demographic factors, the want of people are different like some consumers prefer water and soft drinks to satisfy their needs of thirst and some others prefer juices. The category which prefers juices can also be divided into more sections according to their purchasing power. In market I had to see both price wise competitor and quality wise, because Fruiticana is a good quality product in reasonable price. “K.I.U Skardu Campus”

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If we take a look of company’s revenue than it is clear that the organization is growing year by year and its sale is increasing both domestically and internationally but the market share is still very low, because the beverage industry is a big industry and to capture a reasonable market share Fruiticana Foods needs time and struggle. Fruiticana is in between introduction and growth stage where it is trying to capture as much market share as they can. They are spreading their business all over the Pakistan by utilizing their strong sales team. The sales team of Fruiticana is strong enough to maximize the market share. As I mentioned earlier that Fruiticana is a high quality juice and in quality it is competing Nestle and Shezan juices. In many stores the retailers said that they have switched from Nestle and Shezan to Fruiticana because it is as good as Nestle & Shezan and people can enjoy good juice in reasonable price. Price of this product is average like not too much low and not too much high. There is space for the company that they can increase the price but for that they need to make a good image in consumers mind, need to increase the brand knowledge and awareness, they need to focus on promotional activities so that consumer can easily recognize the brand and the demand of Fruiticana increase from the current level. Fruiticana is not working on positioning, what I take positioning is, to increase the value of brand in the mind of consumers, for that purpose organization need to focus on marketing mix and the most important element of marketing mix which is promotion. I observe that behavior of consumer against Fruiticana is impulse buying behavior, which means they are not too much aware about the product but purchasing it because of its availability to satisfy their need. Only one poster cannot motivate people towards the product, if you really want that people know your product, purchase it and become a loyal customer than you should

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do work on positioning strategies. The strategies of positioning are, Product Strategy, Pricing Strategy, Promotion Strategy and Placement Strategy. Product Strategy: Fruiticana need to work on it because product is the core thing. Fruiticana is already good in quality, they need to maintain it and ensure its timely availability in the market also continuous effort on innovation in products like introduce new flavors, different size of product etc. There is also need to focus on production capacity because the product must be produced enough to fulfill the demand of market, and if any problem arise in the product timely action should be taken by the organization to increase its goodwill in the market. There must be a proper system of quality control which ensures the quality. Pricing Strategy: Fruiticana is currently following the cost based pricing where they charge a nominal amount after fulfilling their cost. The extra amount charged by them is lower than competitors’ products. Fruiticana is working on reducing their cost so that they can gain much profit. I think they should continue the same because lots of customers are price conscious and they prefer to buy such things which are good in quality and available in reasonable price. Promotion Strategy: Fruiticana is not doing anything on promotion. There is only one type of poster and I saw that posters are also missing from points and shops where the product is available. The negative impact of zero promotion is that, people are unaware about Fruiticana and many of the buyers buy Fruiticana because of availability and suggestion of the retailer. If the organization want to maintain a good image in consumers mind and to increase its sales volume than they should promote their product and the best medium is T.V because T.V ads are consists of both audio and video, which can attract more consumers and the impact of Television ads are greater than other electronic mediums. Prime time ads are costly but most effective one. “K.I.U Skardu Campus”

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Placement Strategy: Placement strategy is also very important in positioning strategy because the organization has to decide that through which channel they are going to deliver their valuable goods in the market. The distribution channel of Fruiticana foods is simple because they sell their products to the distributors. There are seven distributors in Lahore and every distributor has given targets which they have to meet by utilizing their sales force. Every distributor has 4 to 5 sales officers which visits the markets on daily basis and meets with the retailers. The sales representatives are hired by the distributor itself but two of them are paid by the organization and rest of the sales representatives are paid by the distributors themselves. Distributor and sales representatives get incentives on target completion. To maintain good relationship with these distributors organization should conduct monthly meetings with them and also give them some extra incentives in shape of lucky draw of most productive distributors etc which will create a competition among them and ultimately the sale of organization increase.

8.1.2 What we are doing good and what are area for improvement? Fruiticana is good in quality and its price is also good enough. Fruiticana is a quality brand in reasonable price and follows the cost leadership strategy which leads them towards success. They need to increase its production volume and also work on its marketing strategy especially on promotion and spreading awareness among general public the information about its brand. They need to work on making good relationship with their distributors and retailers. They need to understand the retailer power and give them value so that they will fairly display Fruiticana brand.

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8.1.3 How can we double increase our sales in next one year time? Give recommendations. 

First of all Fruiticana needs to increase its production capacity and volume because I observed that many of the orders remain pending for many days because of empty stock. This will affect the company’s goodwill.



Secondly Fruiticana is not doing anything in promotion side, they need to think and make some good promotion campaigns. They need to advertise their products so that people get aware about the product and its price.



They should work on gaining and retaining relationship with their distributors and retailers.



They need to induct some new sale points from where people can purchase Fruiticana juices.



Fruiticana officials need to target some new areas because two provinces of Pakistan is still untapped by Fruiticana.



They should adapt intensive strategies which are Market Penetration and Market Development. Via Market Penetration they can increase market share in current market through greater marketing efforts and with the help of Market Development strategy they can target new geographic areas which are not targeted yet.



Fruiticana can also use integration strategy by which they can gain ownership or increased control over distributors and retailers.

By working on these points I am sure that Fruiticana can easily double increase their sales in just one year time period.

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Chapter 09 CRITICAL ANALYSIS On the period of internship I observed Job Descriptions and found that the responsibilities of the employees were Multi-tasking. The environment of the workplace is entirely different from the concepts which I studied in books. So I found that to survive in the cut-throat competitive era we need to develop multi-tasking skills along with dynamic personality and strong communication skills. I spent one month in production factory, I saw that the production capacity of Fruiticana is not enough because they are producing the products in a factory by purchasing production hours by the owner of the factory. Mostly big companies have their own production units but Fruiticana has only a pet bottle production unit and don’t has carton pack production unit, which affects the cost and also sales of the company because of low production. I saw that many orders remain pending because of empty stock. Fruiticana needs to take serious action regarding production capacity of the product, because the demand is increasing day by day and to meet the market needs they should increase their production volume. In theory I read that the production manager handles the production of the product while in the carton pack factory the production manager was assigned my jobs like he has to produce the product, test the product in lab, handles the important financial matters, deals with the bank while importing the raw material, look after the dispatch process and stock taking. I saw that he used to come in office at 9 am while his off timing was not 5 pm rather he used to sit for long and often for whole night. This timing issue is not good for the organization; they should hire assistant production manager to divide the burden of production manager so that production manager can give complete focus on quality of the products.

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Promotion is very important element of marketing mix and there was too much emphasize on promotion in books but in Fruiticana I saw that they are not doing anything for promotion like advertisement, signboard, pamphlet, flyer and sales promotion activities. They are just using their sales force and they are working in market to make sale of Fruiticana to different retailers in the market. The result of no promotion is that, customers are unaware about Fruiticana, although the sale is increasing but the product knowledge in consumers is too much disappointing. Mostly big organizations use integration strategy to maximize the profit and to run the flow of distribution smoothly. Companies maintain good relationship with distributors and retailers, which helps them to remain up to date with the market trend and consumers behavior, because the actors of distribution channel plays a major role in flow of information from consumer to organization. Fruiticana is not doing so much to maintain good relationship with its distributors and retailers. I think by keeping in view the importance of retailers’ power, Fruiticana should not only maintain a good relation with distributors but also make a relationship with its retailers, so that they give proper space for Fruiticana products in their shelves and also refer the products to the customers.

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Chapter 10 SWOT ANALYSIS 10.1 Strength 

Figure 11 Strengths

Quality

Company uses the best quality raw material to develop best quality product, so the quality of the product is the strength of the company. 

Responsiveness

The proactive responsiveness of the business can have a major impact on company’s decision. 

Strong Management

Fruiticana has a strong management team, who are able to avail opportunities. 

Cost

The low cost will help the organization to charge low price as well as to gain more profit. 

Price

Competitive and marginally low price of the product is also the strength of Fruiticana. 

Honest and Determined Employees

Fruiticana has honest and determined employees, which are working continuously to achieve the organization’s goals and objectives. 

Qualified and Dedicated Sales staff

The Sales staff of the company is qualified, dedicated and trained. They have experience in the field of marketing.

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Internship Report Figure 12 Weaknesses

10.2 Weaknesses 

Production Capacity

Main weakness of the company is production capacity. Fruiticana cannot fulfill the demand of many customers especially in hot summer season when the demand of product is high. 

Product Reach

Fruiticana did not cover all the four provinces of Pakistan till now. It is only distributing in two provinces Punjab and Khyber Pakhtunkhwa. 

Public Awareness

Because of its poor promotion strategy people are unaware about the product and this is weakness of company.

Figure 13 Opportunities

10.3 Opportunities 

Market Trend

The changing market trend from home made fruit juices to packaged fruit juices is the opportunity for the organization. 

Increase distribution network

Fruiticana has a chance to increase its distribution network in other cities of Pakistan, which are not targeted yet. 

Promotion

Advertisement and promotion can also increase the sales and awareness of Fruiticana brand in general public. 

Population

The increase in population is also an opportunity for Fruiticana.

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10.4 Threats 

Figure 14 Threats

Intense competition

Intense competition in juice and beverage industry is a major threat, because if any of the competitors offers a good package than a large number of customer can divert towards them. 

Technological advancement

Technology is getting advance day by day, so this a threat for Fruiticana that if any of the competitors or new entrant going to use the new technology than it will surely reduce the cost and also increase the production of the competitor. 

Political instability

The political instability in parent country (Pakistan) can also affect the business of Fruiticana. 

Inflation

Inflation and instability of the Pakistan economy can affect the purchasing power of the large number of consumers. 

Government policies

If the government change its policy regarding juices and beverage industry and impose taxes than the product cost will increase which tends to increase in the price of the product.

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Chapter 11 FINDINGS After spending two months in Fruiticana foods I found some issues in the company’s operation and marketing strategy. If they work to solve these issues than they will surely get success to increase their sales and profit margin also market share. 

Production Capacity Production capacity of Fruiticana is low; I observed that many of the orders remain pending for many days because of empty stock.



Product Awareness Fruiticana is not doing anything in promotion side, which is why the product knowledge among public is almost nil.



Relationship Fruiticana is not taking any prominent steps to maintain good relationship with its distributors and retailers.



Sales Points There are only three sales points in Lahore which is very low as compare to the competitors.



Availability Product is not available in whole Pakistan.



Strategies Fruiticana is not using appropriate strategies for growth and market share.



Aware about competitors Fruiticana is not taking the competitors moves and strategies in to consideration; in fact in many things company is unaware about its competitors.

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Chapter 12 RECOMMENDATIONS 

Production Capacity Fruiticana should increase its production capacity of both pet bottle and carton pack juices.



Product Awareness They need to think and make some good promotion campaigns. They need to advertise their products so that people get aware about the product and its price.



Relationship Fruiticana foods should work to develop a good relationship with its distributors, for that purpose they can arrange a monthly or yearly grand meeting with its distributors.



Sales Points Fruiticana should induct new sales points in big cities from where consumers can easily get the products.



Availability The two main provinces of Pakistan are still not targeted; Fruiticana should target those areas as well after increasing the production level.



Strategies Fruiticana foods should adapt intensive strategies which are Market Penetration and Market Development. Via Market Penetration they can increase market share in current market through greater marketing efforts and with the help of Market Development strategy they can target new geographic areas which are not targeted yet.



Aware about competitors Fruiticana should also have, keep a hawk eye on their competitors and their brands, consumers, prices, quality and their marketing or supply way.

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Chapter 13 CONCLUSION Fruiticana Foods is a private venture. It is a food and beverage company and has always been dedicated to the health and interests of customers and to this end, keeps introducing delicious and healthy food and beverage products. “FRUITICANA” is a brand name of Fruiticana Foods. Fruiticana starts its journey with only two flavors in pet bottle and with a small team and nowadays there are 10 flavors of Fruiticana juice. They introduced these flavors due to consumer variations not only in taste, rather also in the lifestyle. Juices are available in Pet bottle (250, 500 and 1000 ml) and in Carton Pack (250 and 200 ml). Fruiticana is a quality brand having a large variety of flavors in competitive price; its distribution is also good but still needs to improve its reach to the untapped areas. Competitors are spending a handsome amount of sales on their promotional activities while Fruiticana is not doing anything for promotion, neither a single advertisement is on aired till yet and nor a single advertisement published in any newspaper or magazine. Just a single poster cannot aware and stimulate people. People are unaware about the brand but still the sale of company is satisfactory and this is because of the highly motivated sales team which is working in market to enhance the revenue of the organization. Fruiticana is using good quality raw material to develop best quality product. Its management team is so strong and they are working to reduce the cost of the product to maintain the price of the product at same level for a long time so that they get success to retain its customers. The changing market trend from home made fruit juices to packaged fruit juices is the opportunity for the organization but the inflation and instability of the Pakistan economy can affect the purchasing power of the large number of consumers. If Fruiticana foods adapt intensive strategies like market development and market penetration they can easily capture a huge market share in no time.

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References Aaj News. (2013, September 10). Retrieved July 03, 2015, from News Channel: www.aaj.tv Fruiticana Foods. (2015, February 10). Retrieved May 25, 2015, from Fruiticana Orchard: http://www.fruiticana.com.pk/ Unpublished documents and reports of Fruiticana foods

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