1995-2019

TERM PROJECT REPORT

Marketing Management – Summer 2019

Shan Foods Pvt (Ltd.)

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 ACKNOWLEDGMENT

All thanks to Allah Subhanohu for bestowing the

strength to begin the task and resilience to end them.
This research would not been possible without the
help and input of various individuals. My foremost
thanks go to Mr. Muhtiar Ahmed, who steered us all
the way in my research to the right points, and most
importantly help us gather ourselves and shake off
the dust at the difficult junctures. I would also like to
thank all the administrations, teachers and students of
the institute we conducted our research and also to
the many educationists who not only helped us in
gaining access to institutes but also provide their
invaluable insights. I am again grateful to Mr.
Mukhtiar Ahmed for her timely and always much
needed help. My deepest gratitude to all of you.

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 LETTER OF TRANSMITTAL

August 14, 2019

Mr. Mukhtar Ahmed

Senior Lecturer
Institute of Business Management

Subject: Letter of Transmittal

Dear Sir,

With due respect we, the students of MBA Regular Evening

(3Y) batch have reported on “Marketing Management Term
Project” under the course: Marketing Management.

Though we are in learning curve, this report has enabled us to

gain insight of core fact of ‘Marketing aspects of an
organization like Hierarchy, Segmentation, Targeting,
Positioning, Differentiation, Ricing, Brand Perception of the
product SWOT analysis etc’. It has been a challenging and
interesting experience. Thank you for your supportive
consideration for formulating an idea. Without your
inspiration this report would have been an incomplete one.

In last, I would be thankful once again if you please give your

judicious advice on effort.

Yours sincerely,

Adnan Ahsan
Mohammad Sohail
Shabbir Raza
Shamsher
Saad Hamid

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 TABLE OF CONTENTS
S# Contents Page No
1 Introduction  5
2 Vision and Mission  5
3 Organizational Structure  6
4 Segmentation  6
5 Targeting  7
6 Positioning  7
7 Differentiation  8
8 Pricing  8
9 Point of Parity 9 
10 Point of Difference 10
11 Consumer Profile 10
12 Brand Perception 10
13 Current Status in Market 12
14 Competitor Analysis 13
15 SWOT Analysis 13
16 Conclusions  14
17 Recommendations  14
 
 

INTRODUCTION:
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Shan Food Industries was founded as a cottage industry in 1981 in Karachi, Pakistan by Sikandar
Sultan, the founder & chairman. A few years later it started exporting to Europe, United
Kingdom, United States and the Middle East. By 2008, Shan had become hugely popular within
Pakistan due to its quality brands which were selling at affordable prices for common people. The
company is now exporting its products to 68 countries as well in 2019
In 2000, Shan increased its penetration in the central and northern regions of Pakistan, and
officially launched in India in 2004 by organizing a cooking competition in New Delhi. Shan exports
to 68 countries making it Pakistan's largest exporter of packaged spice, food, and rice mixes.
The journey of Shan’s remarkable success starts from 1981 when the dream of one man became a
reality! A visionary entrepreneur, an avowed humanist and a committed philanthropist, Mr.
Sikander Sultan, Chairman, Shan Foods (Pvt.) Ltd, helped pave the way to success by pioneering in
the spice business with a single room operation.

Initially, recipe mixes were only shared within the broader family but in a very short span of time
they gained popularity and orders started pouring in from friends, acquaintances and general
consumers. Overtime, the company prospered and Mr. Sultan decided to launch his very own
brand, “SHAN” and since then there has been no turning back! 

Today, Shan is a powerful global brand that has presence in over 68 countries across 6 continents.

VISION AND MISSION:

Establish Shan as the leading culinary brand, offering authentic traditional recipes & home food
solutions, with relentless focus on excellence in all we do, ensuring a wholesome experience for our
consumers around the world.

CORPORATE HIERARCHY:
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Shan has following organizational structure and sales structure.

CEO

Head of Supply Head of Global Head of Quality Head of Head of Local

Head of Finance
Chain Business Assurance Marketing Business

Brand Brand Brand Brand

Manager Manager Manager Manager

Asstant Brand Asstant Brand

MARKET SEGMENTATION: Manager Manager Asstant Brand Asstant Brand
Manager Manager

Shan Foods is well known for its recipe mix spices with a presence not just limited to Pakistan but to
around 68 countries. The reason for their success is on the promise of delivering convenience and a
traditional authentic taste while cooking with these spices. It enables the consumer to prepare
instantly traditional dishes without any difficulty. The recent social media campaign on Facebook
uses catchphrases like taste happiness and traditional authentic taste. Shan recipe mixes are
positioned on the emotion of happiness and at the same time offers the functional benefit of
convenience which indicates the kinds of consumers Shan would be segmenting and targeting.

At a glance, the market for Shan’s spices is mainly females who are either housewives or working housewives
and want hassle free cooking. If one were to segment the market according to the bases for segmentation,
under

 Geographic
 Demographic
 Psychographic
 Socio economic
 Digital

Geographic:

Present in major cities of Pakistan and even small towns. Shan is also exporting these mixes to
other region like USA, UK, Europe countries, Central Asia, the Middle East and even Far Eastern
countries.

Demographic:

Ladies, housewives and working women aged between22 to 45.

Females aging from 22 to 45 years compose the main target market of Shan Foods. This is because
of the reason that in their part of the world, women are mostly related to the food and cooking.
Hence, Shan Foods develops products that are according the needs and wants of these women no
matter if they stay-at-home or working, single or married ones.

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Psychographic:

 Motivation:
The motivation that derives the woman is the good taste and quality
 Attitude:
The attitude women is positive and optimistic towards Shan products.
 Values:
Love and affection of families towards Shan product.

Socio Economics:

 Culture:
Spices were always added in our cultural heritage and Shan Masala has enhanced our
culture in an influential way.
 Social Class:
All classes are catered whether it is lower middle or upper. But the most common is Middle
class and upper middle class.
 Family Influence:
People get influenced by their coworkers, friends, family.

TARGET AUDIENCE:

The consumption of Shan spices is mostly in the urban areas of the country. In rural areas there still
exists a perception where people use homemade spices as they believe that gives the correct flavor
to their food.

By attitude, the target market of Shan is the following.

 Young Housewives with including working women.

 New comers who have passion to cook.

POSITIONING:
Brand Positioning Shan delivers premium quality food products, with taste, aroma and color of the
meal prepared with it, it provides cooking convenience, and delights the consumers’ five senses. In
simple words “Shan enriches the food experience with authentic taste of cuisines”.

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DIFFERENTIATION:
The functional benefit for which Shan is preferred over its competitor is the Unique Taste, Aroma and
the Color of the Meal, Consistent Premium Quality and Convenience in cooking.

Discriminator
• Unique Taste
• Best selected, premium quality of ingredients
• V Lock Freshness with Cryogenic technology

The Root Strengths of Shan is mainly functional differentiators, which is taste. Other differentiators are
Higher (Premium) Perceived Quality, and convenience which satisfies the consumers’ spot evaluation of
Value for money. After more than 25 years in business, Shan is still maintaining these root strengths.
According to Mr. Sikander Sultan (CEO, Shan Foods Pvt Ltd), he started with these strengths from a Shop
at Jodiya Bazaar, Karachi.

Logo of Shan is also one of the root strength, as it is perceived as a sign of quality and taste.

Shan food is also doing differentiation from their competitors has they have introduced variety of products
under following categories:

 Traditional Pakistani Recipes

 True Oriental Recipes

 Plan Spices

 Ginger Garlic paste

And newly launched Shan sauces have been introduced to make the cooking more easily for a women.

PRICING:
Shan foods in price they are leaders in international market, while in local market their prices
strategy moreover similar with their competitor prices.

Shan Foods is present in 6 broad food categories with over 250 plus SKUs which are as follows:

• Recipe Mix more than 170 SKU’s

• Desserts more than 25 SKU’s
• Pickle 25 SKU’s
• Paste 3 SKU’s
• Chutneys 6 SKU’s
• SHOOP Noodles 3 SKU’s
• Rice
• Vermicelli
• Salt 4 SKU’s

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Though there are many competitors in the Spice Food business, but the main competitor or rival of
Shan Foods is National Foods. Shan has a strong market share in the Recipe mixes category from
which it derives most of its revenue. Shan is most famous for its Biryani Masala for which today it
has nine different variants.

PRICING POLICIES:
The pricing of all Shan offerings varies and depends on each Stock Keeping Unit (SKU).
However, the price ranges for five (out of six) categories of Shan product offerings are as follows:

• Recipe Mix:
The Recipe mixes range from Rs.50 to 85
• Plain Spices:
Pricing of Plain spices varies SKU wise. For example, 50 grams red chili powder is available
at a price of Rs.45 and150 grams at Rs.115
• Dessert Mixes:
Desserts are all priced at Rs.65
• Pickles:
Pickle pricing is Rs.250 for 1000 grams, pricing varies as per SKU
• Salts:
Iodized salt is priced at Rs.280 (800 grams) and plain salt at Rs.200 (800 grams)

It is seen that on a general note, Shan Foods’ offerings are based on parity pricing and are similar to
those of its rival National Foods. According to sources, this similar pricing is not due to any price
war that exists between both companies but is because the raw materials of both are similar in
nature for many offerings. If the cost of raw materials increases, both have to increase their prices
and again their prices show similar trend after increase.

POINTS-OF-PARITY:

 Source – The source of the raw materials is basically the same. The manufacturers
obtain their spices from fields, and local and international markets.

 Process – The production process is similar for most spice manufacturers.

 Target Market – The main target market of Shan Foods is females – working, single, and
married. This market is also targeted by other spice manufacturing companies because

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 in Pakistan, it is the women who are mostly responsible for cooking and shopping for
groceries.

POINTS-OF-DIFFERENCE:

 Brand – The very name of Shan has become synonymous for highest quality and exquisite
taste.

 Packaging – Shan Foods has adopted V-Lock technology for its packaging so that the
products remain absolutely fresh.

 Distribution – Shan Foods has a very efficient distribution and supply chain system that
ensures timely availability of its products to meet customer demand and requirements.

 Global Presence – Shan is the largest exporter of premium quality packaged spices, spice
mixes, food mixes, rice mixes to USA, Canada, UK, Germany, Holland, Malaysia, Middle
East, South Asia, Japan, Singapore, Australia, and many other countries. In sum, Shan has its
presence in almost 68 countries worldwide. It is the first Pakistani brand that has been
officially launched in India and Shan plans to extend its availability in other markets around
the world.

CONSUMER PROFILE FOR SHAN:

The profile for Shan’s primary consumers comprises mostly of housewives who prefer hygiene and
convenience while preparing food for their families. The secondary target market for Shan
comprises of young boys and girls who resides in hostels or dorm and prefer cooking quick and easy
food. Another segment of consumer comprises of young professional workforces who have limited
time to perform their house chores; this segment comprises of both males as well as females.

BRAND PERCEPTION OF SHAN:

For analyzing brand perception for Shan and identifying the strengths and weaknesses of Shan we
considered set of variables which includes the following:

 Quality

 Truly authentic taste

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  Aroma

 Distribution/Accessibility

 Packaging

 Variety

 Affordability

 Loyalty

We made cross comparison among these variables for Shan and its major competitors which includes
National Foods and the unbranded Sector. Shan clearly has an edge in case of Quality, Taste, Aroma and
Packaging. However the brand recall for Shan is also high. Especially some particular recipe mix of Shan is very

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popular among consumers for example Shan Bombay Biryani mix etc. If customers are asked to recall
particular recipe mix then Shan is usually among the consumer tp mindset. The loyalty and variety is almost
the same as other brands like National foods. In case of affordability Shan clearly lags behind the unbranded
and loose spices. Generally Shan packaged spices have been found to be 30% higher than the loose spices.
That is probably because of the packaging and retail taxes.

Current Status in the Market:

Spices Industry of Pakistan worth of PKR 24 Billion Annual Business, according to the statistics provided by
SMEDA 20018-19. This industry can be further divided into two categories, with respect to the sources being
known/unknown.

• Branded/Packed Spices (Market Share 40%, Business Volume PKR 8 Billion)

• Unbranded/Loose Spices (Market Share 60%, Business Volume PKR 10-15 Billion)

The Unbranded Industry wins a fairly larger volume of sales than the Branded spices manufacturers, but this
Unbranded Spices Industry is showing decreasing trends due to the rapid changes in consumer behavior, may
be due to the globalization, (according to PGA) This can be considered as an opportunity for the branded
spices producer to increase their market shares. Unbranded players operate in the market through
independent, self-owned businesses and they don’t run their products under any label in particular.

Market Share Spices Industry Brande vs. Unbranded 2018-19

40%
60%

Branded/Packed Spices Unbranded/loose Spices

In the small list of Branded Manufacturer, some of the major known shareholders are Shan,
National, Mehran, etc. Competition is rising now as new players are also entering this market,

Including Habib (HOLiii ), Rivaayat (Kitchen Secrets) etc. The price levels of the branded packed spices are
Almost 30% more than unbranded spices.

Major Shareholder of the Packaged Spices Market:

 Shan Foods
 National Foods

Other Shareholders with smaller Market Share:

• Mehran Foods
• Ahmed Foods
• Habib Foods
• Zaiqa Foods
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Competitors Analysis with Market Share

Market Share Spices Industry 2018-19

Others
Mehran Foods
3% 4%

Shan Foods
48%
National Foods
45%

Shan Foods National Foods Mehran Foods Others

The table describes the market share possessed by Shan Foods and its competitors. Shan Foods and
National Foods are almost occupying the similar share in Volumes as well as in % but the growth of
Shan Foods is Showing the steady increase while the National foods is Showing fluctuations in its
market growth.

SWOT ANALYSIS SHAN FOODS

Strengths:

• Shan food has a very strong heritage and legacy behind it which has given it a strong goodwill in
households.
• They have very experienced and expert team of R&D.
• Shan foods enjoys an approximately 78% market share in the recipes mixes category. 2018 Market
Reach Retail Volume Sales Shan Foods 3.3 billion Industry 8 billion 23.

• Shan foods is a leading exporter of food items from Pakistan providing it an opportunity to tap the
large global market which helps it to expand at a rapid pace.

• Shan has a wide range of products and SKU’s available consolidating its presence in various niches
and keeping its customers loyal to the brand.

Weaknesses:

• Shan is not present in Jams and marmalades, Ketchups categories like National foods thereby losing an
opportunity market. Many loyal Shan customers purchase National products in these categories which is
causing loss of potential sales.

• Shan has a low market share outside Karachi in the Punjab market where National enjoys market
leadership. This is due to weak distribution of Shan products in Punjab market which is causing loss of
potential sales.

Opportunities:

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 • Shan can get space in market for Jams and marmalades, Ketchup categories.
• Shan still not exist in online buying.
• Shan business is not fully covered in Punjab.
• Shan can vertically integrate to produce its own raw materials which will not only reduce costs but
will also provide it more control over the quality of input.
• Shan currently has a very low advertising spend in the FMCG industry. It can deploy brand activations
and other innovative campaigns to switch customers from the loose/ unbranded segment to Shan
products.
• Shan can also horizontally expand its scope like national foods and enter the other related food
categories where it can tap its loyal customers with minimal extra efforts.

Threats:

• The biggest threat to Shan is the high inflation in Pakistan coupled by a global recession which is
putting pressure on the profits and sales.
• Shan 70 % revenue depend on Recipe Mix category, it should be equally contribution with all
categories.
• The prevalence of counterfeit products is also threat to Shan causing loss in goodwill and potential
sales.
• Eating Habits of new generation are changing very hurriedly, mostly preferred to Ready to eat foods.
• The emergence of newer brand with deep pockets can also damage Shan’s market share due to
heavy advertisement while keeping the product quality close to that of Shan.

CONCLUSION:

Through R&D, innovation and a proper framework for protection through patents and trademarks, Shan
Foods have a bright future ahead, with huge scope for growth and expansion.

Shan Food can increase in size and scope by developing R&D capabilities, patent and trademark protections,
and by considering vertical and horizontal growth and integration.

Need to adopt the most used marketing method, advertisements. In more than 25 years of its existence, Shan
has not paid much heed to advertising.
Shan Foods should, however, consider an IPO and develop itself into a publicly listed company.

RECOMMENDATIONS:
A part from everything, Shan Foods should focus on gaining share of unbranded spices which is still a very big
portion of the whole industry.

Shan also need to increase presence in north area of the country where other players are market leader.

Shan also need to increase the presence in E-Commerce to facilitate the consumers to order the product
through online shopping.

Though the new generations are realizing the benefits of open spices to packaged branded ones, but there
still need to be developed effective marketing strategies after understanding the trends in how people are
using spices and for what reasons are they using them. Convenience, environmental concerns, increasing
acceptance of food as having therapeutic value are some of dimensions organizations need to study and
develop new uses for their spices.

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