Balochistan University of Information Technology, Engineering

& Management Sciences

Department of Management Sciences
Mid Term Examination Fsll-2015
Fundamentals of Marketing
BSBA 3rd A

Instructor: Muhammad Ali

Total Marks: 12.5 Time Allowed: 70 mins
Name: ______________ CMS ID: _________

Instructions:
 All questions are compulsory
 Read the question carefully before answering
 Your answer should be complete and concise.

While many Pakistani consumers are well aware of Packages’ Rose Petal brand of fical tissue,
bathroom tissue and paper towels, but they do not know that the same company touches theor
lives as consumers in hundreds of ways each month. Whether they are using Dalda cooking oil,
Lipton tea, Safegard soap, Surf detergent, National Achar Gosht masala, Nestle Milk, Shezan
ketchup, Coke’s 1-liter bottle, or Diisprin , for headaches and pains, chances are that these
products have been packaged sing material supplied by Packages Limited. Not only that, these
products have most probably been bulk packaged to large corrugated boxes for transport to
warehouses distributors, and retailers in Packages-supplied material as well. All of these
activities are part of Packages’ business-to-business marketing divisions, which generate close to
88 % of company revenues.

Established in 1956, Packages is the largest packaging supplier in the country will sales reaching
over Rs. 10.5 billon in 2007. It serves the packaging needs of over 300 big and small customers
from various industries. It also has overseas collaborative operations in Syria and Sri lanka.
Major industrial segments that Package serves in Pakistan are food and beverage (27%), paper
and board (17%), tobacco (16%), and soap and detergent (15%).

At a general level, marketing packaging material or corrugated boxes to business customers is

like selling fiscal tissues to final buyers. It requires a deep-down understanding of customer
needs and customer-driven marketing strategies that create superior customer value. But that’s
about where the similarities end. In its business markets, rather than selling to large number of
small buyers, Packages sells to much fewer very large buyers. For example, only eight major
clients, such as Pakistan Tobacco Company, Unilever, Tetrapack, Nestle, Colgate Palmolive,
Procter and Gamble, Dalda Foods, and National Foods Limited, account for about 60 %of its
profitability. Whereas it might be disappointing when a toilet roll buyer chooses a competing
brand, losing a single scale of a large business customer can mean the loss of hundreds of
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& Management Sciences
millions of rupees in business. Also, with Packages’ business customers, buying a facial tissue
box might hardly do any pre-purchase planning or search; he or she is more likely to simply pick
the boxes at the spur of the moment while walking through the aisles of the local supermarket. In
contrast, buying well-designed and printed packaging material for (say) Surf detergent, readily
available whenever required according to Unilever’s production schedule, involves a tortuously
long buying process, dozens of decision makers from all levels of the buying organization, and
layer upon layer of buying influences.

Marketing at Packages is structured to address the complex buying behavior of the business
customers. In addition to sales managers looking after geographical regions, each of the major
clients is assigned a key account manager (KAM) whose responsibilities include establishing the
client’s initial and ongoing needs, contract negotiations on pricing and delivery schedules, and
adhering to those delivery schedules. At the backend, the customer service division (CSD)
handles complaints raised by clients or their KAMs and also manages the vendor-managed
inventory (VMI) system for major clients. “our service does not end once the contract has been
signed. Our CSD follows orders from pre-press up all the way to final delivery to make sure our
product exceeds the expectations of our valued customers,” explained Athar Rashid, head of
CSD.

Employees at Packages believe that success in business-to-business markets involves more than
just developing and selling superior products. Business customers buying decisions are made
within the framework of a strategic problem-solving partnership. The examples below show how
Packages works in close collaboration with its business customers in order to reduce cost and
add values for their important customers.

Zero-defect supply (ZDS): ZDS was an initiative launched with the help of Unilever and
is now used for all the major clients. Under ZDS, customers are guaranteed that they will receive
material with zero defects. This guarantee reduces not only the lead times and storage cost of the
buyers but also cost incurred on inspection and quality control. Packages redesigned its
production and quality control processes to ensure that its certificate of ZDS carried weight. The
company invested heavily in training its operators and revamping preventive maintenance to
enable the installation of the ZDS system successfully. The results of this installation were
delighted customers whose relationship with Packages in ensured for long time. Says Nadeem
Aslam, Marketing Manager, Packages Limited, “ZDS benefitted Packages tremendously. It was
really attitude that needed to be changed. We have experienced a positive spillover effect from
ZDS to our other business activities where employees have started performing to their best.”

Vendor-managed inventory (VMI): Packages has implemented a VMI system for its top-
six customers in the last four years. In VMI, the inventory and logistics of Packaging material
needed by a customers is managed by Packages as opposed to the customer. With VMI, the
customers are keeping low levels of inventory in their warehouses and have also reduced
 Balochistan University of Information Technology, Engineering
& Management Sciences
management costs incurred in routine activities of order placements, tracking, and fulfillment.
Now, they are also more flexible to respond to market changes. For Packages, while VMI has
added additional responsibilities, it has reduced some routine costs, improved interdepartmental
coordination, and helped significantly in increasing the quality of service to its customers. Most
importantly, it has provided sustainable competitive advantage to Packages, ensuring long-term
relationships with its valued customers.

Stand-up, capped flexible pouches: For a number of years, Packages had been supplying
flexible plastic pouches to ketchup manufactures to be used as refill packs. A customer would
typically buy ketchup in a glass bottle and continue to refill it by buying ketchup available in
cheaper plastic pouches. In order to reduce product costs, ketchup manufactures such as National
Foods, Mitchell’s, Shezan and Shangrilla were in search of a solution enabling the pouch itself to
be used directly for consumption and not as a refill. Packages’ research and development
division helped develop flexible pouches with a slim cap at the top corner, enabling the
consumer to reuse the pack without going into the hassle of pouring its contents into a container.
Packages also designed these flexible pouches so that they would easily stand up on tables or
kitchen counters. This new product created a huge market for Packages in the food industry.
Starting with ketchup, such packs are now being used for packaging products such as cooking
oil, ghee, mayonnaise, pickle and honey, among other.

“Business marketing is an ongoing collaborative venture” suggests Nadeem Aslam. “We are
continuously searching for ways to add value to our customers. Our customers run very
sophisticated operations and we learn tremendously in this process. It is a win-win relationship.”

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