Report On Mehran Bottlers Limited Marketing Essay

Published Date: 23 Mar 2015

This report presents detailed information on the Supply Chain Management at Mehran Bottlers (Pvt) Ltd. The content provides an introduction to the workings of the company and focuses on the processes followed at the company. Products transacted suppliers, procurement from overseas and local supplies, their qualification criterion, inventory management and distribution network management has also been discussed.

The process starts with sales forecasting which gives an estimate of the sales on monthly basis. Imported material inventory of about 3 months is maintained as safety stock. Some indigents are procured locally as well as packaging material of the product.

Blending operations are managed at their factory which is located at S.I.T.E which also acts as the main local product and raw material warehouse, they also have a SITE warehouse is the main storage for imported finished products. The customers in south region are supplied from these warehouses. The north region is supplied by the Sukkur & Islamabad factory which is being run by there sister concern company Pakistan Beverages Limited which maintains raw material to finished product inventory of both local and imported goods.

There are solo distributor in the southern region and further supply to wholesalers and retailers in their respective areas. Transport operations are managed by the company itself.

Major customers include Super Stores, Small Muhalla shops, Pan Shops, Select or Smart Shops at the Petrol Pump, Canteens (University, Hospital and School etc), Milk Shops, Hotels & Marriage Lawns. Sales are generally on cash basis for new whole sellers & retailers for almost a year and later stages they have credit facilities which are decided on their credit worthiness.

Complete operations are recorded and maintained by the procurement manager of the company which enhances effective and efficient operations and provides a competitive edge.

The report concludes on the importance of Supply Chain Management in the Beverage industry and the wide ranging benefits of its efficient implementation.

Table of Contents

Company profile ………………………………………………………..5

Market & Product Profile …………………………………………….....9

Logistics & Distribution ……………………………………………….19

Transportation Structure ………………………………………...20

Self Transportation Structure…………………………………….21

Whole seller structure of Mehran bottlers………………………...22

Market Survey at Whole Sale level………………………………..25

Daily Distribution schedule at Whole Sale level…………………..26

Retailers…………………………………………………………..27

Distribution Comparison among Mehran, Pepsi & Coke……….....28

Backward Integration…………………………………………………....30

Production Control……………………………………………………....31

Factory Pictures………………………………………………………….32

Conclusion……………………………………………………………....34

Company Profile

Mehran Bottlers is one of the first and the oldest manufacturer, whole seller and exporter of carbonated beverages in Pakistan. The Company which is based in Karachi, the commercial hub of Pakistan owns the largest selling national brand, MEHRAN BOTTLERS. The flagship Mehran Bottlers Ice-cream Soda with its green color and tingling fruity flavor is nearly as young as the nation itself. Mehran Bottlers is Pakistan's national drink but its magic is spread all over globe. It' the only Pakistani soft drink which is available in North America, Africa, Europe, India, Afghanistan & Middle East.

Factory is located at the S.I.T.E area of Karachi, Pakistan and almost a kilometer far its warehouse is located such that its easy for the company for the communication processes and also fulfilling government requirement at the same time.

Vision of Quality Policy

To be SECOND TO NONE in exceeding customers expectations for Taste & Flavor, Product Safety, Quality and Price Competitiveness.

Mission of Quality Policy

To develop, implement & continuously improve the integrated management system in a culture of continuous improvement which:

Directs the continual up gradation for efficient & environment friendly manufacturing technology.

Monitor & improve the efficiency & effectiveness of all business processes.

Promotes professional & flexible work environment teamwork & innovation through employee participation & process ownership.

Driver customer orientation at all levels within the organization.

Monitor & economize the cost of quality.

Vision of Environmental Policy

To be SECOND TO NONE in protecting OUR SHARED environment as EARTH MATTERS for our future generation.

Mission of Environmental Policy

To support this vision, we will continually:

Comply with applicable local & other environmental regulations & strive to secure fundamental reforms that will improve their environmental effectiveness & reduce the cost of compliance.

Improve the environmental performance of our products & process by minimizing the negative impact on the environment & adopting where practical cleaner production & regarding method.

Protect the health & safety of our employees & surrounding human communities & eco system.

Use natural resources, including raw material, energy & water as efficiently as possible.

Take into account the principle of sustainable development in conducting its administrative, manufacturing, marketing & social activities.

Participate in initiatives to improve the quality of the environment.

Vision for Safety & Hygiene Policy

No comprise on consumer health by maintenance & improvement of Soft Drinking Water safety and workplace hygiene conditions.

Mission for Safety & hygiene Policy

To Develop, Implement and improve the Integrated Food Safety and Quality Management Systems in a culture of continual improvement which:

Provide framework based on HACCP, CODEX Aliment Arius & cGMP for safeguarding the consumer health.

Supports the use of scientific knowledge, risk analysis and controls in the enhancement of hygiene conditions and practices.

Educates people on Good Manufacturing & sanitization practices.

The Brand

Mehran Bottlers is one of the most popular brands in Pakistan. The brand was created on 14th August, 1950. As per our slogan, "DIL BOLA….. Mehran Bottlers", we believe that Mehran Bottlers is the heart beat of the nation and with its amazing taste holds the potential or rite that taste buds of the consumers at home and abroad. Although the green drink "Mehran Bottlers Ice cream Soda" is anonyms with the name Mehran Bottlers, but that's not all, Mehran Bottlers gives sensation by bottling other fruity flavors namely Mehran Bottlers Orange, Mehran Bottlers Lychee, Mehran Bottlers Raspberry and Mehran Bottlers Guava.

Quality Food Safety & Environment Standards

Mehran Bottlers is the 1st bottling plan in South Asia. Which has been certified to integrated management system based on (ISO 9001:2000), (ISO 14001:1996) and (RVA HACCP) Standard. Our quality and food safety system follows the FDA GMP requirements and codex. Our Products are manufactured under strict cGMP and Hygiene controls.

Human Resource

The company employees 300 personnel at its Karachi plant. Constant efforts are initiated by the management to train and upgrade the employees and provide better training and working environment.

Organizational Structure of Mehran Bottlers

Production

Maintenance

Q.A Dept

Admin Factory

Admin Warehouse

Sales Manager

Distribution Manager

Marketing Manager

A/C & Cash

C.E.O

G.M. Finance

Plant Manager

Factory Manager

G.M. Operations

Procurement Manager

G.M

Business Operations Manager

Logistics manager

Accounts manager

Sales & Mkt. manager

Production manager

R.S.M regional sales manager

R.S.M regional sales manager

Defence

Clifton

Tariq Road

P.E.C.H.S

Bhadurabad, etc.

Gulshan

Nazimabad

Korangi

Orangi Town etc.

M.D.O

M.D.O

M.D.O

M.D.O

Market Development officer

Sales Merchandising Officer.

S.M.O

S.M.O

S.M.O

S.M.O

S.M.O

S.M.O

S.M.O

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The Hierarchy Level of its Competitor Coke in respect to its Distribution.

Market & Product profile

Pakola is the oldest and the leading beverage brand of our country. Pakola was established on 14th August 1950. The flagship Pakola Ice Cream Soda with its green color and tingling fruity flavor is nearly as young as the nation itself. Mehran Bottlers have divided and introduced their products in many flavors for different target market such as Pakola-Ice Cream Soda, Pakola Orange, Pakola Rasberry, Pakola Lychee, Bubble up, Apple Sidra, Double Cola and last but not least Vital drinking water. Currently Mehran Bottlers hold 10-15% market share in the Cold drink industry. The annual sale of Mehran Bottles on average has 10-15 lakh cases. Mehran Bottlers core competitors are Pepsi Cola and Coca Cola.

On average the industry consumption is about 40,000-50,000 crates monthly, out which Pepsi hold 65%, Pakola hold 10-15% share and rest by other players of the industry.

As far as product ingredients are concerned, majority and core ingredients are imported from various countries such as USA, UK, Malaysia and so forth. Similarly, our products is not only available in Pakistan we also export in North America, Africa, Europe, India, Afghanistan & Middle East.

Products of Mehran Bottlers

Serving Size 1 Can (330ml)

Serving Per Container 1

Amount Per Serving

Calories 170

Calories From Fat 0%

Daily Value

Total Fat 0g 0%

Saturated Fat 0g 0%

Trans Fat 0g

Cholesterol 0mg 0%

Sodium 13mg 0.6%

Total Carbohydrate 44g 5%

Dietary Fiber 0g 0%

Sugars 44g

Protein 0g

Vitamin A 0%

Vitamin C 13%

Calcium 0.6%

Iron 0.2%

Percent daily values are based on 2,000 calories diet. Your daily value may be higher or lower depending on your needs.

Ingredients:

Sugar, Treated Carbonated water, Citric Acid, Natural & Artificial Flavors, Colors FD&C Blue #1 & FD&C Yellows (E133&E102) & Sodium Benzoate (As Preservative).

Also Available in: 175ml, 250ml, 330ml, 1 Litre & 1.5 Litre.

Serving Size 1 Can (330ml)

Serving Per Container 1

Amount Per Serving

Calories 180

Calories From Fat 0%

Daily Value

Total Fat 0g 0%

Saturated Fat 0g 0%

Trans Fat 0g

Cholesterol 0mg 0%

Sodium 11mg 0.5%

Total Carbohydrate 45g 15%

Dietary Fiber 0g 0%

Sugars 45g

Protein 0g

Vitamin A 0%

Vitamin C 13%

Calcium 0.4%

Iron 0.2%

Percent daily values are based on 2,000 calories diet. Your daily value may be higher or lower depending on your needs.

Ingredients:

Sugar, Treated Carbonated water, Citric Acid, Natural & Artificial Flavors & Sodium Benzoate (As Preservative)

Also Available in: 175ml, 250ml, 330ml, I Litre & 1.5 Litre.

Serving Size 1 Can (330ml)

Serving Per Container 1

Amount Per Serving

Calories 180

Calories From Fat 0%

Daily Value

Total Fat 0g 0%

Saturated Fat 0g 0%

Trans Fat 0g

Cholesterol 0mg 0%

Sodium 8mg 0.4%

Total Carbohydrate 34g 11%

Dietary Fiber 0g 0%

Sugars 34g

Protein 0g

Vitamin A 0%

Vitamin C 10%

Calcium 0.4%

Iron 0.2%

Percent daily values are based on 2,000 calories diet. Your daily value may be higher or lower depending on your needs.

Ingredients:

Sugar, Treated Carbonated water, Citric Acid, Natural & Artificial Flavors, Colors FD&C Red #40 & Sodium Benzoate (As Preservative)

Also Available in: 175ml, 250ml, 330ml, I Litre & 1.5 Litre.

Serving Size 1 Can (330ml)

Serving Per Container 1

Amount Per Serving

Calories 180

Calories From Fat 0%

Daily Value

Total Fat 0g 0%

Saturated Fat 0g 0%

Trans Fat 0g

Cholesterol 0mg 0%

Sodium 10mg 0.4%

Total Carbohydrate 45g 15%

Dietary Fiber 0g 0%

Sugars 45g

Protein 0g

Vitamin A 0%

Vitamin C 10%

Calcium 0.5%

Iron 0.2%

Percent daily values are based on 2,000 calories diet. Your daily value may be higher or lower depending on your needs.

Ingredients:

Sugar, Treated Carbonated water, Citric Acid, Natural & Artificial Flavors & Sodium Benzoate (As Preservative)

Also Available in: 175ml, 250ml, 330ml, I Litre & 1.5 Litre.

Serving Size 1 Can (330ml)

Serving Per Container 1

Amount Per Serving

Calories 180

Calories From Fat 0%

Daily Value

Total Fat 0g 0%

Saturated Fat 0g 0%

Trans Fat 0g

Cholesterol 0mg 0%

Sodium 0.8mg 0.4%

Total Carbohydrate 32g 11%

Dietary Fiber 0g 0%

Sugars 32g

Protein 0g

Vitamin A 0%

Vitamin C 10%

Calcium 0.4%

Iron 0.2%

Percent daily values are based on 2,000 calories diet. Your daily value may be higher or lower depending on your needs.

Ingredients:

Sugar, Treated Carbonated water, Citric Acid, Natural & Artificial Flavors, Colors FD&C Red #40 (E129) & Sodium Benzoate (As Preservative)

Also Available in: 175ml, 250ml, 330ml, I Litre & 1.5 Litre.

Serving Size 1 Can (330ml)

Serving Per Container 1

Amount Per Serving

Calories 140

Calories From Fat 0%

Daily Value

Total Fat 0g 0%

Saturated Fat 0g 0%

Trans Fat 0g

Cholesterol 0mg 0%

Sodium 32mg 1%

Total Carbohydrate 37g 11%

Dietary Fiber 0g 0%

Sugars 37g

Protein 0g

Vitamin A 0%

Vitamin C 13%

Calcium 0.6%

Iron 0.2%

Percent daily values are based on 2,000 calories diet. Your daily value may be higher or lower depending on your needs.

Ingredients:

Sugar, Treated Carbonated water, Caramel Color (E150) Phosphoric Acid, Caffeine & Natural Flavorings

Also Available in: 250ml & 1.5 Litre.

Serving Size 1 Can (330ml)

Serving Per Container 1

Amount Per Serving

Calories 140

Calories From Fat 0%

Daily Value

Total Fat 0g 0%

Saturated Fat 0g 0%

Trans Fat 0g

Cholesterol 0mg 0%

Sodium 15mg 0.6%

Total Carbohydrate 34g 11%

Dietary Fiber 0g 0%

Sugars 34g

Protein 0g

Vitamin A 0%

Vitamin C 13%

Calcium 0.7%

Iron 0.2%

Percent daily values are based on 2,000 calories diet. Your daily value may be higher or lower depending on your needs.

Ingredients:

Sugar, Treated Carbonated water, Citric Acid, Natural & Artificial Flavors, Sodium Citrate & Sodium Benzoate (As Preservatives).

Also Available in: 175ml, 207ml, 250ml 1 Litre & 1.5 Litre.

Serving Size 1 Can (330ml)

Serving Per Container 1

Amount Per Serving

Calories 0

Calories From Fat 0%

Daily Value

Total Fat 0g 0%

Saturated Fat 0g 0%

Trans Fat 0g

Cholesterol 0mg 0%

Sodium 30mg 1%

Total Carbohydrate 0g 0%

Dietary Fiber 0g 0%

Sugars 0g

Protein 0g

Vitamin A 0%

Vitamin C 0%

Calcium 0.6%

Iron 0.2%

Percent daily values are based on 2,000 calories diet. Your daily value may be higher or lower depending on your needs.

Ingredients:

Treated Carbonated Water, Aspartame (Artificial Sweetener), Citric Acid, Sodium Citrate, Artificial Flavors, & Sodium Benzoate.

Also Available in: 250ml & 1.5 Litre.

Serving Size 1 Can (330ml)

Serving Per Container 1

Amount Per Serving

Calories 150

Calories From Fat 0%

Daily Value

Total Fat 0g 0%

Saturated Fat 0g 0%

Trans Fat 0g

Cholesterol 0mg 0%

Sodium 10mg 0.4%

Total Carbohydrate 39g 13%

Dietary Fiber 0g 0%

Sugars 39g

Protein 0g

Vitamin A 0%

Vitamin C 13%

Calcium 0.5%

Iron 0.2%

Percent daily values are based on 2,000 calories diet. Your daily value may be higher or lower depending on your needs.

Ingredients:

Sugar, Treated Carbonated Water, Citric Acid, Natural & Artificial Flavors, Caramel Colors (E1500) & Sodium Benzoate (As Preservative)..

Also Available in: 207ml, 250ml & 1.5 Litre.

Nutrition Facts

PH 7.5

Mineral Contents mg/1

TDS 170.0

Sulphate 16.0

Chloride 36.0

Bicarbonates 43.0

Calcium 8.0

Magnesium 6.0

Sodium 14.0

Potassium 1.0

Quality Drinking Water is obtained from scientific purification processes employing revese osmosis and debacterisation through exposure to ultra-violet rays. This water is free of impurities, additives and bacteria. Bottled in accordance with internationally accepted WHO standards.

License #: CM/L-1334/2002 ® PS 4639 / 2002® Approved By PSQCA.

Also Available in: 100ml, 250ml, 600ml & 1.5 Litre.

Logistics

The key distribution is in the hands of the company it self. Starting from manufacturing the product in which it produces Pakola most frequently and following that Bubble up and then Apple Sidra. After the production the inventory is transferred into the Warehouse, which is also the company's self established distribution network. After the goods has been received there is a proper labeling takes place on every batch according to its manufacturing date till the date of its expiry and the inventory will be distributed by the (FIFO First In First Out) inventory system. The company has 56 trucks of its own in which 50 trucks are on field every day. On daily bases, as an average a truck can carry 600 cases, which is combination of 80% regular bottles and 20% cans, and the major areas are covered by the company it self. We have altogether 3,000-4,000 distributors that comprises of dealers, whole sellers, retailers, agents and so forth. In Karachi Mehran Bottlers have 5 agents, they are located in Saddar, Soldier Bazar, Old City, Bombay Bazar, Rancho line. There are basically two ways the company is following to perform its distribution task.

First is directly approaching to the Retailers & Hotels (Self Distribution)

Retail outlets, on daily basis and in very rare case thrice a week, but the company fully tries to distribute it as much as it can.

Hotels & Restaurants, mostly on daily basis and the company's sales rep tries to push the product as much as he could because the company believes that in beverage industry there is a lot of impulse buying takes place and that's why on spot selling is the best method which it could adopt in this case.

Whole Sellers (Depot), there are several depots working in Karachi which are helping Mehran Bottles to improve more sales as well as to hold more stock. Normally the retailer approach the whole sellers by them selves when they need more stock or in other case the consumer approach the whole seller when they need to purchase in larger quantities.

Transportation Structure

Retailers

Whole Sellers

Manufacturing Unit

Warehouse

Self Distribution Network

Places can not be covered by company

Depot

Retailers

Consumers

Restaurants / Hotels

Consumers

Consumers

Self Transportation Structure

Goods received from Manufacturing Unit

Warehousing

Based on FIFO INVENTORY System

Labeling the Stock waiting for distribution

PLEASE DO NOT ISSUE

F

I

F

O

READY FOR ISSUE

F

I

F

O

PLEASE DO NOT ISSUE

F

I

F

O

Expired

Transportation (Thatta)

Transportation (Karachi)

Disposed off

Holding

Whole sellers

Whole sellers / Retailers

Whole sellers

Consumers

Daily

1 or 3 times a week

Daily

Sales Rep orders

Retailers

Hotels / Restaurants

Received the inventory (push)

Go and get the inventory (pull)

2 to 3 mini trucks move

6 days of holding inventory

Retailers

Marriage Lawns

Consumers

Recovery of cases and bottles

Consumers

Recovery of cases and bottles

Territories have been assigned by the company.

To good whole sellers company provides assistance.

The Whole seller's Structure Chart (Mehran Bottlers)

Whole sellers Structure

The Structure of the whole sellers is basically dependant upon the push which the company creates it self or the pull which the whole sellers create in terms of fulfilling its own market demand. Mainly the whole sellers have been appointed by the company to fulfill its,

Financial assistance.

Operations Assistance.

More Market Coverage (where the company can not reach it self).

These are the basic factors for which the company has appointed its whole sellers although the key distribution is done by the company it self because they think that the beverage industry is very much based on impulsive buying behavior and spot selling is the key point through which they can achieve their distribution objectives. The whole sellers normally approach to the retailers directly and not the whole sellers (depot) and the whole sellers are mainly covered by the company it self.

The whole sellers are obligated to get minimum 1 to 3 or more trucks and not less then that, other wise Mehran Bottlers will not drop any inventory if the quantity is less than that. A whole seller also covers the distribution of the marriage lawns which requires normally lesser quantity for the Mehran Bottlers to distribute itself. Normally it requires minimum 10 cases up to 60 cases.

It is also the responsibility of the Mehran Bottler to recover all the cases and bottles from the retailers and from marriage lawns and provide them the new stock against the returned bottles.

The whole sellers commission is approximately is Rs. 21 per case, and if the retailer/ whole seller has a good relation so the company provide the necessary financial assistance to its whole sellers for instance if the they need more trucks for distribution and it has good relations in terms of good sales, good market coverage fulfilling the company's distribution objectives so in that case they would provide assistance to its whole sellers.

The areas which are coved basically show that, the major or the middle part of the city is covered by the company it self and the rest or the part which can not be called the main city is given to the whole seller & retailers. Another important aspect of them is that they only cover the retail stores and shops it may be because they are not considered to be in the main city or it could that the places where they do the distribution does not have any Depots. And for those areas which are not considered in the main city has been given to the whole sellers the reason being that either it carries lot of cost to go into these areas where,

The consumption level is low.

Low Market Potential

Small Retail Shops

Whole seller has all the information about this market.

Distribution house of the whole seller is near in that area of distribution.

Whole Sellers

By Whole Sellers in beverage industry we mean Depots. Depots are usually run by Pathans in which they carry Ice and other beverage items like Juice, colas etc they mainly they are known as Ice Depots. The reason why these companies choose these depots to perform their whole sale tasks is mainly because of the space they have those huge rooms in which they keep ice and the cooling capacity because in between those giant Ice blocks they can store or keep the beverages cold and chill so that the retailer or the consumer who ever needs it in bulk can easily get it from there whether normal or chill. Another aspect of using these depots as a whole seller could be that these pathans does not have more issues regarding so many things, incentives and all, and they consider that if the company is doing this favor that it is delivering coke every day and according to the requirements, so in return the whole sellers would help the company to achieve its objectives those who linked at the whole sale level. The margin at the whole sale level is approximately Rs. 21 per case.

The major aspect involved here is that these depots usually engaged in selling Ice and with the ice if they could get another item like Coke or Pepsi and other beverage items some are on cash and some are on credit and the whole seller also knows that he could sell these items and this is an option for him to do a better business and to gain more profits instead of just selling Ice which might not have higher returns in terms of profits, so he would love to have an opportunity to carry beverages in which the returns are high if he will get good sales, the margin at the whole sale level is high because the company (Mehran Bottlers) is directly distribute it product range to the whole sellers (Depots) it self, and that's the reason company would give the same profit margin to both that is separate that they would call it with different names because the profit or the return the whole seller gets is known as Commission, and the profit which whole seller gets called profit or profit margin. The whole seller gets the new inventory every day, every day the truck comes and deliver the Mehran Bottlers as per the whole seller requirements or in another case the S.M.O would suggest the Depot owner that how much inventory level he should maintain on the daily basis and if there is a season coming up. Normally the whole sellers would work on credit but as far as Mehran Bottlers is concern so they are working on cash at the whole sale level, and if the depot owner gets the delivery today so he must pay the cash by tomorrow when he gets the next inventory of Mehran Bottlers.

The Market Survey at the Whole sale level

The market position of Coca Cola at the Whole sale level is very tragic; the whole sellers are not satisfied with the services which the company is providing. It is not because the whole sellers have high expectations which are not in fair practices but it may be because the industry practices are different and usually companies in the beverage industry are becoming more flexible it is either Pepsi the main competitor of Mehran Bottlers who is doing it or the new companies who are coming up now a days, but they are not considered to be a big threat for a Mehran Bottlers and only the company which could give a tough time is considered to be none other than a Pepsi & Coke.

What happens is that whole sellers the depot owners are not very happy with the attitude and behavior of Mehran Bottlers, according to them the policies of the company is very Rigid. Few of the major problems which they have discussed are as follows,

Order placing position is very week a whole seller can not place an order if they want to because most of the time the response which they get is the factory is close or don't have someone to deliver the Mehran Bottlers.

The second major problem at the whole sale level is that the company does not provide the credit facility to its whole sellers, this is what they communicated them selves, while as Pepsi do provide one week credit facility.

Pepsi people can be called any time for the delivery, but Mehran Bottlers people are very rigid in that case they can not be called at any time every time they refuses to do it so.

Problem in Returning the bottles (means they create a problem in returning the bottles in the case of complains etc)

Mehran Bottlers does not provide other facilities like Freezer at all and only provide Fridge but that is also very difficult it get it from them, while Pepsi provides a Fridge, Freezer and the Fountain machine if needed easily.

These are the major reason why Mehran Bottlers has a week position at the whole sale level and this could be one of the major reasons why Coke & Pepsi are doing well in Karachi in terms of its sales which directly leads to the market share.

Manufacturing

Transportation

Received by Whole Seller

Order (place by Whole Seller)

Warehousing/ Distribution

Payments

Payments Every time receive the order.

Mehran Bottlers daily distribution schedule at the Whole Sale level

Retailers

Mehran Bottlers at the retail level is considered to be every shop which contains whether general items or whether it's a Pan shops or a super stores or at any level whether it's a huge Super Market or a small Dhaba (hotel). They believes that like every other general item or even more than a general item sale of there items is based on the spot selling like chewing gums or chocolates people just see and make a decision without even thinking for seconds to purchase it same as that in they deal it with Mehran Bottlers. The few forms of retailers for Mehran Bottlers are,

Super Stores

Small Muhalla shops

Pan Shops

Select or Smart Shops at the Petrol Pump.

Canteens (University, Hospital and School etc)

Milk Shops

Hotels

Five star or less Hotels

Dhabba

Restaurants

Or it could be Marriage Lawns (because they also consume their)

These are the forms which they consider at the Retail Level, because they all goes directly to the consumer level. Talking about hotels and restaurants so at coke, they are also considered at the retail level because they directly approach to the consumer level.

Mehran Bottlers basically deals with the retailers by it self as well as through whole sellers (as mentioned earlier in the distribution chart) the retailer's margin is up to Rs. 1 per bottle. The retailers which exist in the main city it tries to capture them by it self, but those retailers who are no in the main city are all given to the whole sellers it may be because approaching to those retailers are considered feasible for the company due to the low sales volume or another reason could be that coke does not have much information about that areas that's why they think that whole seller knows how to deal with the people living in his area. Majority of the huge stores and big super markets are all covered by the company it self as well as the areas which has a potential so that company covers its distribution cost.

Distribution comparison among Mehran Bottlers and its competitor Pepsi & Coke (Competitors Practices)

The analysis between Mehran Bottlers and its major competitor Coke & Pepsi in terms of distribution can not be separated as far as the major industry practices are concern, because both of them are some how engaged in the similar practices. Both of them are doing major distribution of their products by them selves and the profits and the margins are also the same in the case of all three of them.

When it comes to the policies and the services both the firms are providing, so there are some differences among both of them, at the whole sale level Mehran Bottlers & Coke does not provide any credit facility but Pepsi does. Other differences are that Coke & Pepsi give more incentives such as the main sign board of the shop is also made by Coke & Pepsi with their name along with the shop name.

Another important aspect over here is that Coke & Pepsi have a larger distribution capacity of its own as compare to Mehran Bottlers, Coke & Pepsi are currently using 73 & 200 trucks per day of their own for distribution purposes while as Mehran Bottlers is using approximately 50 trucks per day, the matter of scalability come into play in this case. In the case of interacting with its channel members Pepsi & Coke are more flexible rather than Mehran Bottlers, according to the whole seller and retailer Pepsi & Coke can be call out anytime to get the bottles and Mehran Bottlers can not because in Mehran Bottlers they give so many excuses for not doing it at the required time period.

The point of serviceability over here means to fulfill the demand of whole seller and retailers as well as give them after sales services for instance to give the proper feedback to the complains coming up just like returning the bottles or replace the expired stock. Coke & Pepsi perform all these duties properly by giving them a proper time and feedback while as Mehran Bottlers does not give them a proper feedback. And the Mehran Bottlers representative knows all these negativities about the company but still they are helpless to do something which improves the image of Mehran Bottlers in those areas.

This is the major point where Mehran Bottlers, Coke and Pepsi differentiate themselves even though their services it is constantly and Mehran Bottlers because of its lack of service losing its market share, as there is not much pull in Karachi's market, so the company should give emphasis to push the product into the market because in the real market what happens is that if a consumer ask for Mehran Bottlers so he can be served by Coke & Pepsi without any objection and vice versa. And at this point Coke & Pepsi are emphasizing to push its product as much as it could while Mehran Bottlers still thinks that it could pull the market by its demand due to its strong and pre build brand equity which is not very effective to capture the Pakistani market. Else the structure of both the companies is almost same Coke & Pepsi are also engaged in the self distribution more as like Mehran Bottlers and specially covering all the outlets which are in the main city, similarly both the companies have appointed whole sellers who distributes Coke & Pepsi where Pepsi & Coke they themselves can not reach or does not know much about that market.

The major differences between the companies are as follows,

1. Serviceability (means order taking system and after sales service) of Pepsi & Coke is good.

2. Channel Members are more satisfied with the Pepsi & Coke.

3. More Capacity (Pepsi &Coke have more capacity in terms of its distribution network and its sales are also more)

4. Position of the Pepsi & Coke at the whole sale and retail level is very strong due to the incentives it provides.

5. More distribution power, Pepsi & Coke have their own high distribution capacity of its own as well as the third party whole sellers.

6. The organization culture of Pepsi & Coke is better organized as compare to the Mehran Bottlers.

How Mehran Bottlers arrived at this decision

Industry practices

Cost analysis (operating manufacturing plant or distribute it from Karachi).

Based on Resources (as the market share started decreasing the distribution structure changing accordingly.

Balance between capacity and consumption level.

Based on buying behavior of channel members (Whole sellers and Retailers).

Buying behavior of End Consumers (impulsive, on the spot buying).

The target market influence (according to the target market hotels, restaurants, youngsters, house hold etc).

Competition influences (always tries to perform better and different from its competitors).

The warehousing capacity Mehran Bottlers has (the stock holding capacity also influences the distribution Mehran Bottlers has a large warehousing).

The market coverage (Mehran Bottlers wants to have a mass market coverage)

Seasonal factor (the Mehran Bottlers distribution also have a seasonal effect when ever there is Eid or any other holidays are coming up the distribution changes accordingly).

Other three marketing mix (the product Mehran Bottlers, and its price as well as its promotion would effect its distribution and that's what they see initially at the time when making a distribution strategy).

Backward Integration

Mehran Bottles Pakistan opens the letter of credit or contract to different vendors. They source material all around the world including UK, USA, and Singapore. Around more than 90% imported from sea mode. The delivery modes are C&F Karachi bases. The company to the shipping line paid terminal handling charges and port charges which is all done by the clearing agent. All the taxes and duties directly paid by the company. The average inventory turnover is 3 times and the industry trend is 4.5 times.

It takes 45 days to import any raw material to remain on save side and to avoid stoppages in the production therefore we start working 90 days before such that we are on time and we can alter any changes if they want. Further, the imported raw material includes: Flavors from USA, Citric Acid from Singapore, Sodium Benzoate for preservatives from UK and so forth.

On arrival of consignment & negotiation from the bank, Mehran Bottles clearing agent clears the goods and transported to Mehran Bottle Concentrated Plant and store the goods in Palletized form on the clearing agent expense under the supervision of warehouse in charge. All the process is outsource by the company.

On the other hand, we also procure different raw material locally such as bottles. Glass bottles procure from Baluchistan Glass Bottles Limited (BBl) located in Karachi. Baluchistan Glass delivers goods from their warehouse directly to the Mehran Bottles Factory. The prices are delivered at warehouse or factory bases. Plastic bottles are purchased from two different vendors, 1) Mehran Plastic located in S.I.T.E area of Karachi, 2) Continental Plastic located in Karongi area of Karachi.

On arrival of goods, quality control department check each material with the help of certificate of analysis and 70% or above shelf life is acceptable. After QC approval the material is label OK and date is mention and stores the material in raw material warehouse. If the consignment is rejected from QC all the material were replace or cancel the order and the supplier replace or lift the material at their cost.

Production Control

Mehran Bottlers operates one of the most modern can filling plants in Pakistan with a filling capacity of 300 cans per minute. The plant is fully computerized and conforms to the highest international quality standards. Apart from the above, Mehran bottlers also operates a bottle filling plant with a capacity of 240 bottles per minute. The plant can fill both glass and pet bottles of various sizes.

All production and market forecast is done manually, there is no implementation of ERP, MRP or any other software or application. As stated by Mr. Irfan Hanif, we do not require any software right now at this point of time, because our estimation and analysis of market is 90% accurate and up to our expectation. Our research and analysis are entirely based on the responses of our agents, whole sellers and worthy retailers. Therefore we do not require any software.

As we are not following any of the application tools or software to understand, how to maintain our stock, at what temperature and so forth, to tackle all this kind of issue we receive Material Safety Data Sheet (MSDS), this sheet is detailed guideline provided by the supplier in terms of handling the material, temperature-how to store and preserve them, expiry dates and all sorts of minute but important aspects are taken care with the help of MSDS. Further to increase the shelf life of any drink it is always helpful to provide the temperature below 0°C, more the temperature in minus more better quality of finished product you receive. Moreover, every glass bottle has a shelf life of 1 year at room temperature, and pack bottles 5 months.

Mehran Bottlers has one major warehouse and it covers the land area of approximately 1 acre, out of which majority of area is occupied by 50 fleets and rest is covered by 10,000-15,000 cases. They have altogether 6days inventory-3 days in house and 3 days at warehouse.

Factory pictures (Mehran Bottles)

Conclusion

Supply Chain Management is a profound science which enhances the value and profitability of a corporation and allows it to maximize customer satisfaction thereby catapulting a company from obscurity to the heights of business excellence.

It is a customer driven process which help a company define its operations and products and enhances its ability to deliver them effectively and efficiently.

The Process integrates suppliers, manufacturers, warehouses and stores so that products are produced and distributed at required quantities, places and times in order to minimize system wide costs while enhancing service level requirements.

Operating in the Beverage industry of Pakistan, Mehran Bottlers follows a stringent supply chain process which helps it compete effectively in the market and satisfy end customers completely by providing quality products as per their requirements.

The Beverage industry is increasingly price competitive and the focus is on minimizing costs to ensure profitability. In the post conditions the importance of an effective Supply Chain cannot be emphasized enough and to fulfill this requirement, every industry in Pakistan needs qualified and dedicated professionals to achieve maximum growth potential and become a force in the industrial world.