PRAN – the Largest Agro Food Processor in Bangladesh Essay
PRAN – the Largest Agro Food Processor in Bangladesh
Agricultural Marketing Company Limited (AMCL) was set up at first in 1981 and then 1985 for farming and marketing of agricultural products for local and export market. Subsequently a modern fruit processing plant with bottling and earning facilities was added in 1993 to produce fruit juice, squash, sherbet, jam, jelly etc. the company processing unit started commercially production in July 1993 and launched its products in the market under the brand name “PRAN”. PRAN stands for Programme for Rural Advancement Nationally. The brand Pran has established itself in every category of food and beverage industry and can boost a product range from Juices, Carbonated Drinks, Confectionery, Snacks, and Spices to even Dairy products. Pran Group was born keeping in view the corporate mission of the group. Today Pran is the largest processors of fruits & vegetables in Bangladesh. Pran is the pioneer in Bangladesh to be involved in contract farming.
They encourage contract farmers and help them grow quality crops with increased yields and to obtain fair prices. They procure raw material directly from the farmers and processes through the machineries at their several factories into hygienically packed food and drinks products. The Group comprises of 10 companies. The head offices are located at Dhaka with production facilities around the country. Their management is modern adapted to the environment & culture and Pran’s largest asset is their competent team of hands-on-mangers & dedicated employees. Pran is listed with the Dhaka and Chitttgong stock exchanges in 1996. Pran agriculture marketing company limited has controlled the nine individual Business Units on their umbrella.
Agro Industrial Park
Bangladesh’s first-ever agro-industrial zone, Pran Agro Industrial Park, was inaugurated in Natore. The park is comprised of automatic rice mill, spice, peanut, honey, tomato, pickle, jam and jelly processing units, fruit pulping units, pulses mill, puffed rice mill, cattle feed mill, plastic molding and milk collection units to produce wide range of products, which is using for export.
Plant in India:
Now Pran is going for FDI (Foreign Direct Investment) in India by building its first foreign factory in India, taking advantage of the country’s recent decision to lift its ban on Bangladeshi investment. The plant will be built in the north-eastern Indian state of Tripura. It will initially produce jelly and drinks and is expected to come into operation by 2009 with an annual turnover of around Tk100 crore. It will supply the markets of northeast India -Assam, Nagaland, Tripura, Meghalaya, Manipur, Mizoram and Arunachal Pradesh -known as ‘Seven Sisters’, said a senior official of Pran Exports Ltd. The plant will initially produce jelly and drinks, which have already won popularity in those areas, said Paramuddin Hossain, senior manager of Export of Pran Group.
Related and Supporting Industries
Pran Food Limited produce different types of food products which require many other related and supporting products in their different stages of production and distribution.
I.Mango and Other Fruits Industry:
Pran’s mango juice is their most selling item and most of their earnings are earned by selling mango juice. So they need a large amount of mango as a raw material in mango juice production. They also need mango in producing Jam, Pickles and Mango Bar. Besides Mango they also need many other fruits like Orange, Pineapple, Apple, Litchi, Lemon and many other fruits to produce Juice, Jam, Fruit Bar and Pickles. At present they supply mango and other fruits from their own garden as well as import from other countries like India and Bhutan. But the importing amount is more than the amount of supply from their own garden.
Sugar is an inevitable raw material for production process in Pran Food Limited. They need sugar in juice production to candy production. They use our home countries sugar because they do not import sugar for high tariff rate. So sugar industry is a related and supporting industry for Pran Food Limited. There are many local sugar industries that depend on Pran.
Pran has the country’s largest milk producing centre. Pran’s own dairy firm supplies milk to produce Ghee, Milk candy, Mango Milk, Chocolate Milk, and in many other production process. If supply from their own dairy firm can not satisfy the need of raw materials in future other dairy firms can give them the supply.
Pran needs a bulk amount of wheat to produce snacks, like Crackers & Chips, Bakery Items, Biscuit, Chanachur, Dal etc. They import wheat from other countries for their production process.
To distribute all products Pran needs quality and colorful packaging. At present they are importing all packaging materials excluded the glass bottle from China and Korea. And they use local glass bottle to distribute juice and pickles.
Organizational Structure of Pran The Pran agriculture marketing company limited constructed their organizational structure in standard way which could efficient for their production and job.
The structure is given below:
Marketing Strategy of Pran To achieve its marketing objectives Pran uses the customer centered orientation program to gain large bulk of customers. First of all they set Segmentation Targeting Positioning (STP) for their products.
Pran segment their market to divide the market into distinct groups of buyers who have distinct needs, characteristics, or behavior and who require separate products or marketing mixes. For example: they segment their mango juice to think about the people of different age and who have different taste. Like Pran Mango Juice-Classic for generalized group, Pran Mango Juice-Premium for the group who want thick mango juice, Pran Joy Juice for the young generation and Pran Junior Juice for the children.
Pran target the middle class people who wants verified taste of foods. As consumer percentage is high in this group they think that this target market is highly profitable for them. So, they don’t go for high priced product rather than they try to serve low price but competitive quality of product. That is why their main object is to serve quality product at a lower price and they do a lot of promotional activities for being the best in the competitive market.
Pran positioning their products in their customers mind by offering special features and benefits. To occupy a clear, distinctive, and desirable place relative to competing products in the minds of their target market Pran tries to position their each and every product. For example; Pran tries to position the Mango Bar as a taste of the happiness of their childhood, in the mind of every consumer.
IV.Marketing Mix of Pran:
Pran has a set of controllable tactical marketing tools –product, price, place and promotion, which they blend to produce the response wanted by their target market.
Products act as customer solution for their demand. Pran has an extensive line of product which can easily satisfy the need for any food demand of the consumers. Consumers are getting all sorts of food products they need to consume from Pran.
Bangladesh has a huge shortage of fruit, vegetable, raw materials. So Pran make up this shortfall by importing from the neighboring and different countries like India, Bhutan, and China etc. But, for that, Pran needs a relaxed tariff structure to keep their products competitive. So, Pran follows competitive pricing strategy to compete in the market. But they also take care of the limitation of their customer. So they always try to keep the price low to compete in the market and to make their product’s price affordable for their consumers.
Pran has an extensive sales network throughout the country to reach their product to everyone. Their products are available even to the remote part of the country. Company appointed sales force to cover every part of the country.
Pran communicates with their consumers by various means of promotion. To maintain a good public relation they take intensive sales promotion. To promote Pran’s product to their customers, they are conducting some promotional activities.
Advertisement in print media such as news paper, magazine
Advertisement in visual media with opinion leaders
Sponsoring in different cultural occasions
V.Countrywide Sales and Distribution Network:
Pran maintains the following distribution network
Pran sales force comprises 137 Executives. Number of Sales Representatives is 1510. They are performing the responsibility of Selling to retailers all over Bangladesh through Distributors. At this moment company appointed total Distributors are 720.
Mode of Transportation
Pran use transportation in the following activities:
I.To Import Raw Materials:
To import the raw materials Pran use Freight on Board (FOB) and C&F both transportation system. On FOB the supplying company takes the responsibility to import raw materials up to Chittagong port and on C&F the supplying company imports the raw materials up to the factory. But Pran use the C&F system more than FOB system.
II.To Export Processed Foods:
Pran Food Limited uses the shipping system to export processed food to many other countries. To avoid the high transportation cost, they use shipping system instead of air. III.To Distribute In The Local Market:
To avoid high freight Pran use their own distribution channel to distribute their products inside Bangladesh. They also take help of the local transportation agencies to distribute their products on payment. The names of some local transportation agencies that they use more frequently are given below:
Haji Mostafa Transport
Multi Star Transport Ltd.
N. Mohammad Transport
Packaging is the science, art and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging is very important part for the marketers because by looking at the packaging of product, consumers take the decision of buying a particular product. That is why Pran does colorful packaging which attracts customers a lot. Pran gives a lot of efforts in packaging. They are in a good position in doing packaging compare to other companies in Bangladesh. Pran export their product in the international market, so comparing with the international market their process of packaging is not in a good pos
ition at all. Pran is doing their best to compete with the international standard of packaging. For doing packaging they use foreign technologies to compete with the world market. They import package mostly from Thailand. Then they prefer China. They import different packing materials like- Aluminum Foil, Crown Cork, Flexible Packing material, Glass Bottle, Glass Jars, HDPE, Lug Cap (30, 53 & 63mm), PET, Shrink Labels, Shrink caps, Tin Can, U-Straw.
Pran is doing packaging because of following reasons:
Products should be packaging in such a process which is convenience for the consumers. Pran package their products in such a way that it is very convenience for the consumers to take products from one place to another. Pran do standardizing and grading their products according to different weight of their product.
Pran always try to have bit more profit from customers. So Pran emphasize on appearance, dependability, and prestige of better package for having consumer affluence.
iii.Company and Brand Image:
Packages contribute to instant recognition of the company and brand. Pran packages their product in such a way that it’s become very easy for the customers to recognize their product.
When Pran package their product, they emphasize a lot in few factors like-
Physical means the physical product. They emphasize whether products are secure after packaging or not.
There are some problems that create product unhygienic, dust is one of them. To hygienic the product, Pran does their packaging very carefully. They concentrate on whether the packaging is protecting the products from different barrier or not. Pran use new types of technology for protecting these types of problem.
In packaging, Pran gives a lot of information about how to use products and what chemicals are their in the product. By doing these they do the work of information transmission which help a lot to the customers.
There is possibility of damaging goods when products are going for shipment. Some time because of some defect in the packaging, products can not reach in there destination. For that reason companies loss their profit as well as their goodwill. That is why Pran emphasize a lot on security in packaging to prevent from these problems.
Way of Packaging:
The way that Pran packages their products can be shown in the following tables-
Local Demand Condition Pran is the Bangladesh’s largest selling processed food company. The local demand for Pran’s product has increased day by day. The marketing officials explained that their current production volume even failed to satisfy the local demand condition in last year.
The local demand condition of Pran’s product can easily determined by their sales volume. Here we examine Pran’s sales volume for last five years which shows that the local demand condition of their products has increased drastically. In 2004 the sales volume was worth of 50 crore taka which increased to 250 crore taka in 2008. That means the sales amount has increased by 40% in last five years.
Foreign Demand Condition Like local demand condition Pran has a vast demand to the foreign market. They started to export from 2001 and from then on their foreign demand condition has just increasing and increasing.
The foreign demand condition of Pran can be easily drawn by their exporting volume of last 8 years. We can see from the graph that at the beginning the only export worth 12 crore which increased by 16.67% in next year (2002). They had a slow increase in export up to 2005. Till then they had average increase of 17% each year in export. But they had a drastic change in export from 2006 when their exporting volume rises by 55.55% from the previous year. They had exporting volume of 56 crore taka in 2006 and 80 crore in 2007. In last year they export worth 120 crore which break the all past record of increase in export.
Market Access Issues Pran, Bangladesh’s largest agro process company produces and export different kinds of food products. Now they have access to many countries and have potential to export many other countries.