Serviceing market

SERVICE

MARKETING

OF

M.M.

ISPAHANI LTD.

Submitted By: Abu Saleh Mohammed Jahid.

Introduction: The name M.M. Ispahani is the symbol of trust, reliability, reality, which runs its business more successfully in this subcontinent since 1820 and achieved Business Award 2003. Ispahani group comprising over 11 departments engaged in various business activities in Bangladesh. Among them Ispahani Tea is a dynamic and customer oriented department.

The name M.M Ispahani indicates the leading and Nobel organization, which runs its business more successfully in this subcontinent since 1820.

Ispahani is one of the most successful private companies, which run its business all over Bangladesh. It is the organization in this subcontinent that has a hundred eighty years old golden history of business. We salute those legends that are the founder of this great organization.

Life sketch of Ispahani Ispahani is the spices brand name that moves to the western Indian city of SURAT in 1820 and moved to Madras where they made their base. They had extensive business interests in India, Iran, Burma and Egypt.

Ispahani established an office in Dhaka around 1875 to trade indigo and hides. An office in Calcutta followed this in 1900.

From the time the Ispahani office was established in Calcutta they concentrated on exports. Ispahani was the foremost company to promote the sale of Indian tea

to Iran who till then was drinking green tea from China. Ispahani developed the export of rice, lentil, Kapok and spices to the International markets.

With the outburst of World War (1) Ispahani established an office in mincing Lane, London in 1914. The London office exported Textiles and other products to Calcutta.

Mirja Ahmed Ispahani joined Ispahanis in Calcutta in1918. In 1924 his father, Mirja Mohammad Ispahani became the sole proprietor of Ispahanis.

Mirja Mohammad Ispahani died in 1925 leaving his business to his son Mirja Ahmed Ispahani.

In Calcutta between 1925 and 1947 Mirja Ahmed Ispahani had an uphill task to develop exports to many commodities. In this period Ispahanis were the largest exporters of rice, Hessian and shellac.

He also established the Ispahani chemical company Ltd., Shellac and Jute (Victory Jute products) Industries. He promoted the Muslim Commercial Bank, Orient Airways and took over the management control of Eastern Federal Insurance whilst still in Calcutta.

When he moved to Chittagong in 1947 Ispahani Chemical in Calcutta was sold.

Shellac Industries remained in India but the head office of Muslim Commercial Bank, Eastern Federal Union Insc Co. and Victory Jute products were move to Chittagong. The bulk of jute machinery of Victory jute was moved to Chittagong and a working mill established in a hanger at Pahartali. This was the foremost and first Jute mill in East Bengal.

Mirja Ahmed Ispahani was called upon by Govt. to serve as a member of Jute board.

Founder Haji Mohammed Hashem was the founder of the house of Ispahani. Ispahani came from Ispahan city of Persia to the western Indian city, Surat in 1820. They move to madras where they established business concern. Then they extended their business interest in broader India, Iran, Burma, and Egypt.

Developer

Haji Mirza Mehdy Ispahani, grandson of Haji Mohammed Hashem, shifted the corporate Head Quarter to Madras. He opened a branch office in Dhaka in the year 1875 Mirza Mohammed Ispahani, son of Mirza Mehdy Ispahani, established the Calcutta office and named M. M. Ispahani & Sons in the year 1900.

Contributor Mirza Ahmed Ispahani, eldest son of Mirza Mohammed Ispahani joined the partnership business with his younger brothers Mirza Abul Hassan Ispahani & Mirza Mohammed Ispahani in 1918. He also established the private limited company M. M. Ispahani Ltd. in 1924 in Calcutta. In 1947, the corporate Head Quarter was shifted to Chittagong where it stands today. In 1965 it was taken over by the Indian government.

The visionary leader, Mirza Ahmed Ispahani expanded the business so rapidly that by 1947 M. M. Ispahani Limited was the main exporter of Shellac, Kapok, Jute bags, Hessian, Tea & chemicals.

In 1948, after the division of the Indian Sub-continent, Mirza Ahmed Ispahani left family business and joined public service. He and his brother Abul Hassan played a vital role in the formation and industrialization of the new country.

He was the pioneering spirit and driving force behind orient Airways Ltd. and was a founder director.

• He was the longest servicing chairman of Pakistan International Airlines (PIA) from its inception.

• He was the founder director of the Jute Board and Industry development Corporation that oversaw the industrialization of the region in Jute, Textiles, Sugar, Paper, and Matches etc.

• He was the director and a major shareholder of Eastern Federal Insurance Company.

• He was a founder director of Muslim Commercial Bank Limited.

Mirza Ahmed Ispahani returned to the family business in 1969 and continued as a senior director until his demise in Dhaka in 1986.

He made the organization as an institution. All mission, vision and values are institutionalized. Now all of his successors follow him in all aspects.

• In 1934, the paid up capital was Rs. 2.5 million when it was incorporated as a private ltd. company.

• In 1947, the paid up capital was Rs. 10 million when it was converted into a public limited company.

• In 1990, the paid up capital was raised to Tk. 34 million.

Its shares are not open for public subscription and it is not listed with DSE/ CSE though it is a public limited company.

Today the brilliant 180 years business in the sub continental, the house of Ispahani is still dedicated to the cause of excellence in providing high quality goods and services. By virtue of its commitment to professionalism, the Ispahani group has carved the name of itself in the international as well as the national market.

STRATEGY MISSION AND VALUES OF ISPAHANI Ispahani has its own defined organizational culture. Some of these are stated and some are not, which have been developed over the years of its existence. The set of values, beliefs, philosophies, attitudes etc. are very apparent in this company and one has only to step into to get a feeling of the atmosphere of the company.

As we know the best way to understand the corporate culture is through example and Ispahani plenty of it can be found, to be convinced that a lot of effort is given toward developing a very positive corporate culture.

STRATEGY Ispahani strategy requires high standards of performance in • Understanding the changing needs and expectations of customers and acting promptly to meet them.

• Setting clear objectives and measuring performance in achieving them.

• Creating supportive environment in which employees can realize them.

• Potential and receive acknowledgement for their efforts.

• Communicating honestly and openly

• Teamwork.

MISSION Ispahani has a defined mission that goes a long way in explaining what they are and how pursue their business. The missions of Ispahani are: • Maximizing profit through increasing total scales volume.

• Affordable prices.

•

Providing better services to the people.

VALUES In all its activities, M. M. Ispahani Limited gives stress on • High standard of customer service and care.

• Respect each other as individuals and encourages to work.

•

A commitment to aid to all roles that human development plays in the aid process.

• Make good relationship with suppliers and other supplement partners.

•

Providing opportunities for personal development.

• Conducting business with confirming ethics.

Ispahani Group is one of the most successful and respected business houses in Bangladesh. The company has corporate offices in Dhaka, Chittagong and Khulna. Through diversified businesses the group employs approximately 20,000 people.

UNCTIONS OF M. M. ISPAHANI The present function of the company, as described in their brochure and through the Intern’s reports is briefed below: Today M.M. Ispahani Ltd. is completely professional outfit. The organizational strength comes from a dedicated workforce. The team has some of the best planners, architects, engineers, financial experts and marketing professionals.

Each area of work is departmentalized on a purely functional basis and each directed to achieve qualitative superiority.

The Ispahani Group is a very large & old company comprising over 10 separate companies engaged in various business activities including – Branding: Ispahani Ltd. is well reputed organization and operated tea and chips business in Bangladesh. Now-a-days, the people are going to more quality and price conciseness and they always find branded product. Also, to-days markets are very competitive and various homogeneous products exist in the markets. Brand helps the customers to identify a specific product. For the above reasons Ispahani feel the need of branding. In 1980, structural branding culture has started in Ispahani.

After 1987, Ispahani use most modern technology for packaging to offer consumer the freshest most tea and chips. In the year 2004, Ispahani has introduced three layers laminating pouch in their pack and it is first in Bangladesh.

In 1993-95, Ispahani extend their brand of tea . Also in 1993-95, Ispahani provide single chamber “Green Spot” tea bag. In 1997, Ispahani is first in Bangladesh to introduce double chamber tea bag. In 1997-98, Ispahani operates a demonstration program which creates brand image. In 1998, Ispahani introduce “Zarin Jar” to extend its brand. In 2000, Ispahani also introduce “Bag in Bag” tea bag as the brand extension. They introduce “Bag in Bag” tea bag for the more quality sensitive customer. They also introduce “Scheshe pack” branded as “Easy Pack”.

For creating and keeping brand image, Ispahani first maintain quality and then emphasis on packaging and advertising. Ispahani develop their brand by introducing “Bag in Bag” tea. The brand “Ispahani” means trust and which provide quality tea.

Pricing: Price is the controllable element that marketer can manipulate in fever of company interest. Price is all around me. So companies handle price in a variety of ways. The pricing strategy of Ispahani tea is handled by top management to achieve five objectives that are mentioned in the following: • Survival • Maximum Current Profit • Maximum Market Share • Maximum Market Skimming • Profit Quality Leadership

Setting pricing policy: Ispahani considered many Factors in setting its pricing policy that are mention in the following ways: Selecting the Pricing Objectives Determining Demand Estimating Cost Analyzing Competitor’s Offer Selecting The Final Price Costs involve: Ispahani costs are taking by following two forms: • Fixed cost/ overhead; that costs don’t vary with production or sales revenue, for example Ispahani must pay the utility bills and rent, salaries and so on.

• Variable cost; Vary directly with the changing production.

Pricing Methods: There varies method of pricing, but Ispahani follow tow types of methods.

• Cost base pricing • Competitive pricing The pricing of Ispahani tea mainly depend on the auction price. The auction price is one type of variable cost. So production cost varies with the changing of auction price. Ispahani is counting the cost by the following way.

• Variable cost = 10 Tk. • Fixed cost

= 2000000 Tk.

• Expected unit of sales = 20000 Kgs.

Unit cost = Variable cost +

Fixed cost Unit sales Per unit cost (kg) = 10 + (2000000 ÷20000 kgs) = 110 Tk. The Ispahani measure its profit margin with the comparison of competitor’s price.

Their margin method is; Unit cost Markup price = (1 – Desired return on sales) For example, Ispahani would like to make profit/ markup 20% on per unit, then the calculation will be following way; 110 = (1- 0.2) = 137.5 Tk. (per unit/kg) But the changing auction price 2Tk. to 7tk. (Per kg) would not effect on price on Ispahani tea.

Promotion In this Modern economy the promotion is the best way to Reach Consumer’s mindset. Basically Ispahani’s promotion has provided in into two parts. One is regular and another is irregular part.

Promotion Of Ispahani

Regular

Irregular

Advertisement Print Media Electronics Media

Public relation

Hoarding board/ Billboard

Captive Program

Gifts

Ispahani provide their advertisement in three ways; firstly Electronic Media such as Television, digital Billboards, radio, internet etc. Ispahani spend 90% of total Media budget in Electronics media. Among the all Electronics media Ispahani uses the television to reach their actual and potential customers for its coverage.

Ispahani use some advertisement on Digital billboards in the city. Ispahani also advertises their product in radio which reaches the message to the rural people.

Secondly, Ispahani use some print media for advertise their Newspapers, Magazines, Posters and banners etc. Ispahani do everyday/regularly. They use it sometimes or when they feel use some hoarding billboards in the highway by which message.

product. These are not use print media need. Ispahani also they express their

Thirdly, they also use some advertisement programs. Sometimes they use gift program for the retailers for increase sales volume. This program also called sales promotion tool. From 2002 Ispahani is offering captive program for its retailer.

Ispahani join some public relation programs. They also take some project of social welfare and they always sponsor in sports and in various programs.

Ispahani operates some school and college and donates in charity as a social works.

SALES AND DISTRIBUTION NETWORK Ispahani marketing, sales and distribution network has been geographically divided into nine divisions with a total number of 250 sales depots and the number of depots is increasing day by day. For each division the number of sales depots varies from a minimum 12 depots to maximum 59 depots. Although it is difficult to estimate the actual coverage of Ispahani's present marketing network, the company covers about 90% of the districts in an extensive form.

Distribution and Sales Sales and distribution of tea originates from each division. Generally the divisional manager prepares a list of requisition items and sends it to the factory manager through the assigned marketing manager. Goods are dispatched from the factory to the respective division and from here it moves on to the different sales outlets. The divisional sales centers maintain a set of register for stock held and goods dispatched.

Marketing and Sales Policy The policy makers of the Ispahani feel that the company can make more money and sustain its marketing department profitably on the goodwill that it has gained in the market. This belief is substantiated over the time and it can generally said that the good will is probably its single most important asset. Ispahani’s goodwill in the tea trade also has an overwhelming edge over all its competitors in the trade. The company sells its product at one price, which means that they have a uniform price all over Bangladesh. All sales are made on the wholesale price, the retail price is fixed by the company and the retailers can make profit around 7% to 10% on wholesale price by retailing to the consumers.

Conclusion: Limo Electronic Ltd. is well known company and it has made a regulation in the marketing of elections appliance. They are selling high quality product expanding their sales and service network.

After analyzing the findings it becomes clear than an intense competition is going on in the market and the computation is mostly based on price. The companies are using different method to attract the attention of consumer. The companies are divided in their opinions in

respects of price quality and service but it is not possible for a single company to meet all expectation of the consumers.

Thus from all the discussions is revealed that Limo Electronic Ltd. have market potentiality in Bangladesh. Though huge competition is going around, if the recommendation are taken into consideration, I hope that Limo will be the brand leader in the field of consumers Durable Home appliance i.e. color television, Refrigerator Air Con Micro Oven, Washing Machine etc.