PEL Research PU Group Aug-11

PAK ELEKTRON LIMITED.14-km, Ferozpur Road, Lahore

PRESENTED toHUMAN RESOURCE DEPARTMENT

PRESENTED by

UNIVERSITY of the PUNJAB, LahoreDuration: 22-07-2012 to 15-09-2012

Pak Elektron Limited

TABLE OF CONTENTS

ContentsTABLE OF CONTENTS.................................................................................................................1

EXECUTIVE SUMMARY..............................................................................................................5

HISTORY AND BACKGROUND......................................................................................................6

Energy Meters............................................................................................................................14

Board of Directors...........................................................................................................................17

PRODUCT ...............................................................................................................................37

A/C Competitors ........................................................................................................................38

Refrigerator Competitors ....................................................................................................38

PLACEMENT .........................................................................................................................38

PRICING ............................................................................................................................40

SEGMENTATION .................................................................................................................40

North Zone ....................................................................................................................................40

SOUTH ZONE ...............................................................................................................................41

Regions ...........................................................................................................................................41

PROMOTION MIX (APPLIANCES) .............................................................................41

ADVERTISING ......................................................................................................................41

MESSAGE FOR REFRIGERATOR .............................................................................41

MESSAGE FOR AIRCONDITIONER .........................................................................42

TYPES OF MEDIA ..............................................................................................................42

1. Electronic Media ..................................................................................................................42

2. Print Media ..............................................................................................................................42

INCENTIVES FOR CUSTOMERS & RETAILERS ............................................42

INCENTIVES FOR DEALERS ....................................................................................42

CUSTOMER .........................................................................................................................43

PUBLIC RELATIONING .................................................................................................43

1


DEDICATIONS

TO My Honorable Teachers, Parents and Friends who showered their wisdom and knowledge

enabling me to come to grips with the worldly life and attain my Objectives.

2


ACKNOWLEDGEMENTS

We are extremely grateful to Allah for granting me the opportunity, perseverance and

determination for handling the internship at PEL for six weeks duration. i extend many

thanks to my supervisor Mr. Kashif Jafri who was extremely co-operative and guided me

throughout the Internship Program, and Mr.Waseem ,Mr. Sohaib,Mr.Abrar, Mr.Afraz and

Mr.Tanveer for their prowess in Excel and for also taking out time to explain. They helped

me a lot in performing all the activities and in gaining the practical knowledge of marketing.

They monitored my all activities and gave me the best suggestions to complete all the

assigned tasks in an effective manner.

We are so thankful to my institute and my teacher Internship Advisors for giving me the

opportunity of this internship during my course of studies, that build my personality and

enable me to do some creative work be a successful person in practical life.

3


EXECUTIVE SUMMARY

We have worked as intern at PEL (Pak Elektron Limited) for the duration of 6 week. We

made this report about the working of PEL specially appliances division. Whole staff is very

co-operative. We have learnt a lot from this organization which I mentioned in this report.

This report will give its reader knowledge about the history and background of PEL, its

strategic alliance with LG, its products, owners, organizational structure, departments and

their working, its competitors and goals. It also provides SWOT analysis for the overall

analysis in the market. Finally, this report contains my practical learning, recommendations

and suggestions.

The purpose of this exercise was to learn while working in the practical field, especially, the

knowledge related to the Marketing division. It has really helped me observe as to what

extent the text book knowledge is being practiced in real field.

4


HISTORY AND BACKGROUND

5

BACKGROUN

DANDHISTORYPART

1


Pak Elektron was setup in 1956 as a Public Limited Company with the object of

initially producing transformers, switchgears, and electric motors. AEG experts and PEL

personnel carried out the designing and production of this equipment jointly.

After the conclusion of joint venture agreement with AEG Saigol Group acquired the PEL

COMPANY in October 1978.

The company floated its shares to the general public and was listed on Karachi Stock

Exchange (KSE) and Lahore Stock Exchange (LSE).

In 1980, Appliances Division was established and in 1981 it started the production of

Window Type Air Conditioners with the technical collaboration of General Corporation of

Japan. These air conditioners were well received in the market for its quality. Subsequently

in 1987 the production of Refrigerators and Deep Freezers was started.

In 1993 the company has started the assembly of Compressors for Refrigerators and Deep

Freezers under technical collaboration with Messrs. NECCHI COMPRESSORI of Italy.

It was in early 70s that PEL became known in overseas markets due to its quality. The

company started its export to countries like Saudi Arabia, Abu Dhabi, Qatar etc. Later on

PEL supplied electrical equipment to various other countries in the Middle East, Far East

and Africa with great success.

PEL (Pak Elektron Limited) is the flag holder of the Saigol Group of Companies. Pak

Elektron Limited (PEL) is the pioneer manufacturer of electrical goods in Pakistan. It was

established in 1956 in technical collaboration with M/s AEG of Germany.

In October 1978, the Saigol Group of Companies bought the company. Since its inception,

the company has always been contributing towards the advancement and development of

the engineering sector in Pakistan by introducing a range of quality home appliances.

In the year 1980 the company expanded into consumer products with the introduction of

Window Type Air Conditioners and today also manufactures Split Air Conditioners,

Refrigerators, Microwave ovens, Deep Freezers and Compressors etc.

PEL products right from the beginning have been of a high standard and the name PEL is

synonymous with QUALITY all over Pakistan. Since its inception, the company has been

acting as an institution working for the advancement and development of engineering know

6


how in Pakistan. The company has produced hundreds of engineers, skilled

workers and technicians through its apprenticeship schemes and training programs.

In October 1978, the company was taken over by the SAIGOL GROUP, which is one of the

leading industrial groups in PAKISTAN, having diversified business activities in the fields of:

Textile, Engineering, Banking & Finance, Fuel & Energy, Trading, Automobiles.

PEL has two divisions of its business.

1. Home Appliances Division

2. Power Division

Home Appliances Division:

Home Appliance Division includes the products like WRAC (Window Room Air Conditioner),

Split Air Conditioner, Refrigerator, Fridge, and Microwave Oven.

Power Division:

Power Division includes the products like Transformers, Switchgear and Energy Meters.

The present range of power products includes Transformers up to 33KV 5MVA capacity,

Switchgears up to 33KV, Cage Induction Motors up to 40HP, Single Phase Energy Motors,

Small Generators, Shunt Capacitor, Banks and Recloses etc.

7


VISION STATEMENT

Toexcel in providing engineering goods and services through continuous

improvement.

MISSION STATEMENTS

To provide quality products & services to the complete satisfaction of our customers

and maximize returns for all stakeholders through optimal use of resources

To focus on personal development of our employees to meet future challenges

To promote good governance, corporate values and a safe working environment with

a strong sense of social responsibility.

SLOGAN

Change your Life

8


PEL-LG STRATEGIC PARTNERSHIP

Pak Elektron Limited, held a press conference (April 21, 2009) to announce the strategic

alliance between Pak Elektron Limited & LG Electronics. An agreement in this regards was

signed at the ceremony by Mr. MuradSaigol, Director Operations, Pak Elektron Limited &

Mr. E. D. Choi, General Manager, LG electronics, Pakistan Liaison Office. Mr. Saigol

announced this to be the biggest partnership in the history of home appliances and air

conditioners in Pakistan and this strategic alliance will expand in the times to come. PEL

has been appointed the official distributor for LG Air Conditioners, Refrigerators, Microwave

ovens, washing machines and vacuum cleaners from June 2009. The addition of LG for

Pak Elektron will now mean Pak Elektron will have two leading brands, PEL and LG, in both

the categories of home appliances and Air conditioners.

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This synergy of brands will bring technologically better products

to the customer at competitive prices. PEL will be offering

innovative products made from cutting edge technology of LG.

LG Electronics has 30 R&D centers globally and spends

hundreds of millions of dollars on R&D making it one of the

leading brands in the world. This will be possible as LG has a

wealth of global expertise in terms of designing the right

product for the consumer. LG will also enhance the production

capabilities of Pak Elektron through technology transfer which

will translate into more smart and sophisticated designs, with

competitive cost of production.

As the facility is upgraded it will be fully capable for export of LG products thus improving

the foreign exchange earnings for Pakistan. Pak Elektron will benefit from economies of

scale as a result maximizing return to all stakeholders.

The partnership has now been ended due to some reasons and now both companies are

woking separately.

10


COMPANY PRODUCTS

The company comprises of two divisions:

1. Appliances Division

2. Power Division

1) APPLIANCES DIVISION

This Division of PEL consists of appliances manufacturing.

Pel Air Conditioners

PEL window-type air conditioners were introduced in 1981 in technical collaboration with

General Corporation of Japan. Ever since their launch, PEL air conditioners have a leading

position in the market. PEL air conditioners cooling performance has been tested and

approved by Copeland and ITS USA. With the shift of users’ preference from window type

to split type air conditioners, PEL has started manufacturing split type air conditioners.

PEL Refrigerators

The manufacturing of refrigerators started in 1986-87 in technical collaboration with M/s

IAR-SILTAL of Italy. Like the air conditioner, PEL's refrigerators are also in great demand.

Today, PEL Crystal has 30% market share. Its cooling performance is tested and approved

by Danfoss, Germany and its manufacturing facility is ISO 9002 certified by SGS

Switzerland.

PEL Deep Freezers

PEL deep freezers were introduced in 1987 in technical collaboration with M/s Ariston of

Italy. Because of durability and high quality, PEL deep freezers are the preferred choice of

companies like Unilever.

2. POWER DIVISION

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PEL Power Division is one of the major electrical equipment suppliers to WAPDA

& KESC. Over the years, PEL electrical equipment has been used in numerous power

projects of national importance within Pakistan. Since 1956 the company manufactures

Transformers

Energy meter

Switchgears

Kiosks

Compact Stations

Shunt capacitor banks

Transformers

PEL’s first major power product being produced since 1956.The company

manufactures Transformers upto 5000KVA capacity. These oil-immersed transformers

are suitable for both indoor and outdoor installations, being manufactured as per IEC

76, BSS 171 or VDE 0532 standards. Sealed tank designs are available up to 200KVA

while all larger sizes are conservator type. PEL Transformers have been tested in

KEMA labs Holland, against short circuit withstand in addition to Routine Type and

Impulse Tests in Pakistan.

Besides the standard 11/0.415 KV transformers, PEL also manufactures. 33/11 KV

transformers up to 45000 KVA, pad mounted transformers and Silicon Oil Transformer etc.

Switch Gears

PEL’s second major power product is High Tension and Low Tension switchgears being

produced for indoor and outdoor installations complying with the latest international

specification i.e. IEC, BSS or VDE, PEL’s switchboards are sheet fabricated totally

enclosed, floor mounting vermin and dust proof. These are supplied with factory fitted

relevant components and copper bus bars internal wiring, terminal blocks etc. in preprinted

form. Out switch gear manufacturing line consists of High Tension Indoor or Outdoor type

switch gear, metal clad, draw out type with vertical or horizontal isolation can be supplied

up to 33 KV voltage during rating and short circuit level of 750 MVA as per customers’

requirements. These panels can be supplied complete with triple-pole, minimum oil/bulk

oil /SF6 Air Magnetic / Vacuum Circuit Breakers, Current and Potential Transformers,

meters protection relays and other standard accessories PEL’s 11KV switchgears have

been tested for short circuit withstand if the KEMA International Laboratory.

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Energy Meters

PEL’s third power product is the high tech, high quality single-phase wattmeter being

produced under licensed from ABB (Asea Brown Boveri Power T&D Company) of USA.

In the range 10-40 amps and rated 240 volts. It is also being planned to expand in

other metering areas in near future. The plant with an annual production capacity of 5,

60,000 meters became the first unit of its kind in 1997, to be awarded ISO-9002

certification, in Pakistan.

Special products like 11KV and 33KV Auto Re-closers and 11KV shunt capacitor

banks were also supplied to WAPDA under IDA and USAID International contracts

through open international competition

PEL CHRONOLOGICAL LAUNCH PRODUCTS

YEAR PRODUCT INTRODUCEDTECHNICAL

COLLABORATION

1956 Distribution Transformers, AEG West Germany

13


Switch Gears, & Three Phase

Induction Motors

1978PEL was taken over by Saigol

Group

1981PEL Window Type Air

ConditionerGeneral Corporation Japan

1987 PEL Refrigerators SILTAL SPA Italy

1987 PEL Deep Freezers ARISTON Italy

1993PEL NECCHI Fractional Horse

Power Compressors

NECCHI COMPRESSORI

Italy

1994PEL Single Phase Watt Hour

Meters

ABB, Power T&D Company

USA

1995PEL DAEWOO Color

TelevisionDaewoo Electronics, Korea

1997Carrier Window & Split Type

Air ConditionersCarrier Corporation USA

2001Samsung Window & Split

Type Air ConditionersSamsung Corporation Korea

2003PEL Split type AC imported

from China.Galanz&Midea, China

2004PEL Washing Machine & Floor

Standing Air Conditioners

Local assembling in Washing

Machine

2005PEL Digital Energy Meters &

Split AC ManufacturingLicense from ABB of USA

2006PEL Generator & Mini

RefrigeratorsJapanese Technology

2006Unilever Deep Freezer (Walls

Ice-Cream)Local Manufacturing

2007 MWO assembly Kit import from GALANZ.

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2008 PEL Water Dispenser Trading Item

2009 LG Titan LG

2010New Microwave Oven at

Lowest pricePEL

COMPANY PROFILE

Pak Elektron Limited (PEL) is the flag bearer of the Saigol Group of Companies.

The products manufactured by PEL have always been of high standard and the name 'PEL'

is synonymous with QUALITY all over Pakistan. Since its inception, the company has been

working for the advancement and development of engineering know-how in Pakistan. The

company has produced hundreds of engineers, skilled workers, and technicians through its

apprenticeship schemes & training programs.

PEL has been continuously adding new products to its range. As a result, PEL has

registered a significant increase in its sales volume, during the last ten years.

The company has always been contributing towards the advancement and development of

the engineering sector in Pakistan by introducing a range of quality electrical equipments

and home appliances and by producing hundreds of engineers, skilled workers and

technicians through its apprenticeship schemes and training programs.

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Board of Directors

Mr. M. NaseemSaigol Chairman / Chief Executive Officer

Mr. M. AzamSaigol

Mr. M. MuradSaigol

Mr. Muhammad ZeidYousafSaigol

Mr. Muhammad Abdullah HaroonSaigol

Mr. Haroon Ahmad Khan Managing Director

Mr. Syed Zubair Ahmad Shah NIT Nominee

Mr. Syed Iqbal Ashraf NBP Nominee U/S 182 of the Ordinance

Mr. WajahatA. Baqai NBP Nominee U/S 182 of the Ordinance

Mr. Rizwan Hameed NBP Nominee U/S 182 of the Ordinance

Audit Committee

Mr. AzamSaigol Chairman/Member

Mr. Wajahat A. Baqai Member

Mr. Rizwan Hameed Member

Mr. Haroon Ahmad Khan Member

Company Secretary

Mr. M. Omar Farooq

Chief Financial Officer

Syed ManzarHasan FCA

16


Auditors

M/s YousafAdil Saleem & Co. (A member firm of Deloitte Touche Tohmatsu)

Chartered Accountants

Legal Advisors'

M/s Hassan & Hassan Advocate

17

BUSINES

SOPERATIONSPART

2

chiarman

Managing Director

Appliances DivisionPower Division

Director Operations

SalesQuality Control & Assurance

Marketing Customer Services Manufacturing

IT

Human Resource

Industrial Relations

Finance & Accounts


ORGANIZATIONAL STRUCTURE

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HIERARCHY OF MARKETING APPLIANCES

DIVISION

Description of Marketing Departments

19


Marketing department is main nerve of any organization as far as PEL is

concerned; PEL has two different marketing departments i.e. separate for the two divisions:

Appliance Division.

Power Division.

Appliance Division

The products marketed and managed in Appliance Division are as follows:

Refrigerators

Microwave ovens

Split and Window Air Conditioners

Washing Machine

Water Dispenser

The primary duty of marketing department is to make an overall marketing plan for each

product and also analyze the current market situations by monitoring the competitors

separately and constructing strategies accordingly.

It includes the development of daily sales report region wise, location wise and to compare

it with the annual sales plan and in case of fluctuation take corrective actions and make

necessary arrangements. Another task of marketing department isallocation of advertising

budget and to develop promotional plans for retailers, wholesalers and end consumers

within limited financial budget for the whole year.

Beside these activities this department is also responsible for check and balance of dealers.

This department not only motivates the dealers but also check their activities. It also checks

their credit limit because dealers have awarded different credit limits according to their

potential of sales. Whenever any dealer’s credit crosses its limits they stop the supply and

first they try to motivate dealer to clear his credit then they restart his supply. These all

things happen because much of PEL’s sale is on credit.

Marketing department is a blend of following departments:

Customer Service Department

Credit Control Department

Consumer Marketing Department

Dispatch

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Customer Service Department (CSD)

CSD is a customer service department under the Marketing Head. Where the after sale

service is provided to satisfy customers having problem in their appliances. PEL is well

known for their customer care service.

Credit Control Department (D&C)

D&C is a credit control department under the Marketing Head. A responsibility of this

department is to maintain record for all the credit transactions.

Dispatch

Dispatch is another department under the Marketing Head. In this department all the things

are maintained which are send out of the factory or to dealers.

Consumer Marketing Department(CMD)

There are three main tasks done by CMD

Processing

Debit and Credit

Recovery

The main function of this department is the collection of the monthly installments from

customers and develops monthly installment reports and ledger. It also includes the

presentation of monthly cheques, their report as well as preparation of bounced cheques

Sheet.

Cash inflow & Cash Outflow Position is Checked on daily basis. Balance with different

banks is matched with Ledger.

Working of Marketing Department

This department is headed Market ing Manager.

Then Further down in h ierarchy there are:-

Brand Managers.

Manager Dist r ibut ion Credi t .

Customer serv ice of f icers.

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Inst i tut ional sale Manager.

There are s ix branches of PEL in Pakistan. They are headed by

Regional Sales Manager. (RSM). The sales pol ic ies are recommended by

head of f ice for a l l regions. The pol ic ies for customer serv ice are def ined

by General Manager Customer Service at head of f ice. Targets are given

to regional sales Manager of each part icular region and then the RSM

gives fur ther target and incent ives to sales of f icers to achieve the demand

targets.

In Lahore the market is d iv ided into 3 areas:-

Abid Market

Pat ia la Market

Out ski r ts

· In Abid Market there are 20 dealers and 30 sub dealers.

· In pat ia la Market there are 16 dealers and 21 sub dealers.

· In outski r ts there are 35 dealers

In Lahore there is : -

RSM (1)

Area Sales Manager (2)

Sales execut ive (10)

Market ing department contro ls the 4P’s in the company i .e.

Product ,Promot ion, Placement, and Pr ic ing. They are also responsib le for

the al terat ion and Modi f icat ion in the di f ferent brands of the company and

of new product e.g. they can suggest color change, s ize of product etc.

which is being demanded by the customers. They t ry to br ing innovat ions

in the products to make them at t ract ive for the customers and to compete

wi th the compet i tors i .e. Dawlance, General , and Waves etc.

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There are pr int as wel l as e lectronic media for

promot ion act iv i t ies.

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DESCRIPTION OF DIFFERENT DEPARTMENTS

HUMAN RESOURCE DEPARTMENT

Human Resource Department is the most important and key department of every

organization. It not only deals with the employees of the organization but also help in

management of the affairs of the company.

PEL has a full fledge HR Department known as HR&A or administration department with

the staff strength of 38 employees. The GM is the top executive in the HR department and

there is one manager of HR to facilitate the work of G.M. and 2 personnel and an admin

officer.

HR Department’s activities are spread over the whole organization. The following areas

come under direct supervision of HR department at PEL.

Hiring and right sizing of employees

Training and development

Compensation system

Security and fire fighting

Gate supervision

Telephone exchange

Fair price shops

Canteen supervision

Dispensary and health care

As the security in the company like PEL is very much important so there is 24-hour

arrangement of security by three shifts in charges headed by a security officer. He is also

responsible for the firefighting activities and for the placement and checking of all the

firefightingequipment. For the purpose of security and for the visitors there are two gates

under the supervision of a supervisors with two gate assistants who are responsible for all

the in and out transport and movement activities in the organization.

There is a telephone exchange in the organization having a facility of 13 lines. The

organization is providing the basic necessities to the workers e.g. flour, ghee, sugar etc.

from the fair price shop at very controlled price and quality. Because this is part of fringe

24


benefits these benefits are provided to the employees. There is a fair price

supervisor who is responsible for the purchase and distribution.

PEL is also providing the facility of mess to the workers, officer as well as to the interns.

Mess is provided at very nominal charges. Mess supervisor is responsible for the

purchases and cooking.

There is not a particular hospital in PEL but there is a dispensary with two dispensers and

one senior dispenser. For the medical checkups and for any detailed curves the employees

are sent to social security hospital.

FINANCE DEPARTMENT

Finance Management is the lifeblood of any industry. If this area of corporate activities is

improperly handled, a company may lead insolvency despite having all the resources and

opportunities. Therefore proper financial management is vital for every business concern

and PEL is not lacking behind over here.

At PEL finance department for both division (Appliance and Power) is separate but their

procedure are same. To control both another departments called “Finance Center” is

established. Functions of finance are:

Perform as a workstation and as an integrated circuit amongst all department of the

company.

Arrange monetary resources / funds at favorable prices and at proper time.

Allocate resources / funds throughout the organization.

Financial deals with the banks, investment firms, leasing companies, modaraba

companies, DFIs and other government agencies through Finance Center.

Carry out final auditing of financial records prepared by Accounts department of

Appliances and power division.

The finance department maintains record of all its expenses through vouchers. Generally

the following types of vouchers are used for this purpose.

Cash payment vouchers for cash transactions recording.

Purchase vouchers

Bank payment vouchers

Journal vouchers for general expenses.

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Income Tax /Sales Tax Recording

The Finance Center prepares and keeps up to date record of income tax & Sales Tax

deductible at source on the payments made to its buyers i.e. WAPDA and others, income

tax/sales tax deductible on the salaries / wages or on sales of its employees/dealers and

tax payable to the government on the company’s profit.

ADMINISTRATION (IR & A) DEPARTMENT

Key responsibilities are:

Maintenance of Attendance

Maintenance of Stores

Check the material in & out from the factory

Maintenance of factory

Provide assistance to all departments regarding material

PROCUREMENT DEPARTMENT

PEL has state of the art methods of production and they also outsource the products and

raw material not only from Pakistan but also from Asia, America, Europe, and Africa.

So for this purpose PEL has two different departments for procurement, which are:

Local Procurement

Foreign Procurement

LOCAL PROCUREMENT DEPARTMENT

Local Procurement department is responsible for all the raw materials that are required for

making various products in the factory. It includes from nails to large metal sheets. At the

start of each financial year they receive a major plan from the management, which

highlights all the raw material required for each product. Dates and maximum time limit for

raw material requirement is also mention in this major plan.

Now procurement team makes small benchmarks and milestones from the major raw

material required plan in order to ease them for remembering the required time limit and

also reminds finance department to arrange finance for such purchases.

26


FOREIGN PROCUREMENT DEPARTMENT

Responsibilities and duties are same as Local procurement but they vary in the dimension

that, they have to arrange the raw material from abroad. They also receive same plan as

local procurement for the whole financial year and develop milestones to carry out the plan

execution properly.

The skill of this department is to purchase the raw material in the optimum cost that best

satisfy the need of production department and also to finance department in quality as well

as in monetary terms respectively.

INTERNAL AUDIT DEPARTMENT

The internal audit department is made to keep record and track of each department.

The main responsibilities of this Dept. are as follows:

How things are working in each department?

Avoiding of illegal use of company resources

Creating a check and balance procedures for each department.

Keeping track for misuse of responsibilities

Indicating unnecessary usage of Budget allocation

INFORMATION TECHNOLOGY DEPARTMENT

IT department’s key responsibilities are as follows:

Troubleshooting and problems facing in computers

Installing and deletion of software’s

Rights protection and issuance

Developed and maintain internal network.

Developed and maintain domain of each person.

Create and enhance internal software’s running

currently.

27


Hardware and all software issues

PRODUCTION DEPARTMENT

Production department’s key responsibility is to develop and create products that are

required for the specific department. They also receive a major plan for the whole financial

year that indicates the number and models of each brand and the deadline time for each

lot. PEL’s production department is comprised of different units according to the products.

Following are the names of production department:

Refrigerators Production Department.

Transformers And Switchgears Production Department

Electricity Meters Production Department.

ACCOUNTS DEPARTMENT

The Accounts Department looks after the financial matters. Accounts department for both

power and appliances division have similar functions as below

Financial keep of daily, including the income statement and balance sheet.

Book keeping of daily monetary transactions.

Production maintenance reports

Cost data on labor, materials and overheads.

Remittances and loans

Expense reimbursement

Tax statement

Employees Salary Recording

Cash payment vouchers for cash transactions recording.

Purchase vouchers

Bank payment vouchers

Journal vouchers for general expenses.

Income Tax /Sales Tax Recording

Controlled by Account Officer, this section is responsible for keeping three types of

employee’s salaries record. These records pertain to workers, staff and officers /

managers.

28


When a person joints the organization he needs to submit a joining report to

HR&A for verification. Only those employees are eligible for salaries that have salary

authorization and appointment letter issued by HR&A department. Every month HR&A

department send an absentees report to salary controller of Finance Center. This list

contains names of those employees who were on unauthorized leave. The salary

controller deducts required amount of money for unauthorized leave. No salary is

deducted if casual / sick / earned leave is properly applied for.

The monthly salary record of each employee is entered in the permanent master file of

computer. Necessary changes are made if any increment is observed in the employee’s

salary.

INDUSTRY ANALYSIS

There are two major local brands i.e. Dawlance and PEL.

Dawlance

The company started their operations in early 80’s. Currently United Refrigeration Limited is

the leader in the Industry, its annual sales are approximated up to 240,000 refrigerators per

annum, and they are also dealing in deep freezers, Microwave ovens, washing machines,

Split air conditioners, Televisions and kitchen appliances.

Like every other brand, they also got into agreements with different financial institutions to

cater the hire purchase customer. Company also got its own network of retail outlets in

Karachi to cater the same.

29


Company’s R&D made them the most progressive and dynamic brand in the

market; they normally introduce new design after every two – three years. Dawlance offer

their products at competitive rates to their customers. They used to offer very controlled

credit and incentive policy but now they have increased their incentives and relaxed credit

policy, because of improved competition products.

Reasons for Dawlance Growth

Following are the reasons for growth in the market share.

Quality product

Strong brand name

Strong dealership network

Better product range

Timely availability

Heavy advertising

PEL

PEL got into appliances business in 1983 with window room air conditioners. The product

was a big success and became the leaders in this product. In 1987 PEL added refrigerators

in their product line. The initial product didn’t get a good response from the market

PEL re-launched refrigerators under the silver bullet brand CRYSTAL in 99. During the first

year of launch 50,000 units were sold against 27,000 units in 97-98. Before the launch of

Crystal, the product was at the decline stage of product life cycle. From ’99 onwards PEL

refrigerator sales grew at an average internal growth of 36% per annum and emerged as

the second largest manufacturers in Pakistan market.

Reasons for PEL Growth

Following are the reasons for growth in the market share.

Improved quality product.

Restoration of dealer’s confidence in product.

Introduction of differentiated features i.e.

Jumbo Freezers, water dispenser etc.

Relatively better retailer margins as compared

to core competitor Dawlance.

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SWOT ANALYSIS OF PEL

SWOT Analysis is a strategic planning method used to

evaluate the Strengths, Weaknesses, Opportunities,

and Threats involved in a project or in a business

venture. It involves specifying the objective of the

business venture or project and identifying the internal

and external factors that are favorable and unfavorable

to achieving that objective.

In many competitor analyses, marketers build detailed

profiles of each competitor in the market, focusing especially on their relative competitive

strengths and weaknesses using SWOT analysis. Marketing managers will examine each

competitor's cost structure, sources of profits, resources and competencies, competitive

positioning and product differentiation, historical responses to industry developments, and

other factors.

Marketing management often finds it necessary to invest in research to collect the data

required to perform accurate marketing analysis. Accordingly, management often conducts

market research (alternately marketing research) to obtain this information. Marketers

employ a variety of techniques to conduct market research, but some of the more common

include:

Qualitative marketing research, such as focus groups

Quantitative marketing research, such as statistical surveys

Experimental techniques such as test markets

Observational techniques such as ethnographic (on-site) observation

Marketing managers may also design and oversee various environmental

scanning and competitive intelligence processes to help identify trends and

inform the company's marketing analysis.

SWOT analysis is just one method of categorization and has its own weaknesses. For

example, it may tend to persuade companies to compile lists rather than think about what is

actually important in achieving objectives. It also presents the resulting lists uncritically and

32


without clear prioritization so that, for example, weak opportunities may appear to

balance strong threats.

STRENGTHS

PEL has the following strengths and is in more competitive position in these areas than its

competitors. Following are the main strong points of PEL:

Strong brand image

Strong dealer network

Good product quality and service

Number 2 in refrigerators in Pakistan

Firm grip in home appliances

Strong Management

Distribution of Authority

Free customer service

WEAKNESSES

Like other companies PEL has some weaknesses in operating the business. If PEL

overcome on these weaknesses then it can become a market leader in the home appliance.

PEL loose some competitive edge in the following points:

Financial Problems

Lack of advertisement

System variations

Lack of Product range

Lack of Job Rotation

Lack of Co-ordination

Lack of coordination with dealers

Poor after sales services

Defects in new products

OPPORTUNITIES

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For the PEL there are more opportunities for expansion the business. If PEL

realize that opportunities then it will be more fruitful and profitable for the company. Even if

company does not take advantage of these opportunities then it will lose its competitive

position and high profit. Its `competitors will give PEL tough time to pursuing the

opportunities that are adopted by them. Following are the

opportunities for the PEL.

Exploration of market in Pakistan

Increase in product range

Export opportunity

THREATS

PEL Company in such a competitive era has many threats as well. These threats are for the

present situations and future. Company should make its policies and strategies according to

these threats. So following are the main threats for the PEL:

PEL facing tough competition.

Mostly companies Give High Credit in market and get current market

High Credit market is big fever for the company

Slow growth rate in Pakistan

Instability of government

Tax department

MARKETING STRATEGY

Target consumers are at the center of the marketing

strategy. The company identifiesthe total market, divides it

into smaller segments, selects the most promising

segmentsand focuses on serving them. To make success

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in today’s competitive market place, companies need to be customer centered.

PEL understands the importance ofcustomers and that is why it has a customer-driven

marketing strategy.

MARKET SEGMENTATION

PEL‘s Marketing Department is responsible for identifying the attractive segmentsandto

target the best of them. As PEL does mass marketing so it is good for company. Itdesigns a

marketing mix using mechanisms under its control: product, price, place andpromotion. The

company engages in marketing analysis, planning, implementation andcontrol to find the

best marketing mix and to take action. The company uses theseactivities to enable it to

watch and adapt to the marketing environment. PEL doessegmentation of the market

according geographic and demographic variables like ruraland semi-urban areas and

income level of the customer.

MARKET TARGETING

Market targeting involves evaluating each market segment's attractiveness andselecting

one or more segments to enter. PEL’s target markets are customers fromlower middle,

middle and upper middle income level and PEL also targets rural and suburban areas

markets. PEL targets these markets because it has differential advantagesof economical

and durable products over its competitors; where it can generate thegreatest customer

value and sustain it over time.

MARKET POSITIONING

PEL positions itself as an electronic company offering durable products of bestperformance

at economical rates. PEL plans positions durability and low prices thatdistinguish its

products from competing brands like Mitsubishi, Sabro etc. and give it thegreatest strategic

advantage in its target markets.

MARKETING MIX

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PEL plans to focus around key object ives of

bui ld ing a st rong demand for core products through

ef fect ive market ing and product improvement. Under

the di f f icul t business environment PEL are conf ident

to perform sat is factor i ly in the coming year by

keeping a watch on qual i ty , achieve cost reduct ions

through improved ef f ic iency and growth momentum.

PRODUCT

Our report concerns about home appl iances sector of PEL. There are

three main categor ies of products.

( i ) Refr igerator

( i i ) Ai r Condi t ioner

( i i i ) Deep Freezers

( iv) Spl i t

(v) Washing Machines

PEL is market leader in Air condi t ioners throughout Pakistan. Due to the

bet ter qual i ty of i ts A/C the brand loyal ty is h igh. I t has int roduced

di f ferent new models to at t ract the customers. General is No.2 in market .

In refr igerator PEL is 2 n d in the Market in respect of sales. Whi le Dawlance

is number 1. PEL is st r iv ing to become No.1 in next 3 to 4 years by

int roducing new Models and modi f icat ions in their products. The market

for ref r igerator is growing whi le for Air -condi t ioner i t is stagnant .

There is very intense compet i t ion in the home appl iance industry. The

companies in the industry are t ry ing to capture the market by aggressive

advert isement new product launching, br inging innovat ive features in

exist ing products.

The act ive companies in th is industry are:

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PEL

LG

Dawlance

Waves

General

A/C Competitors

General

Waves

L.G

Refrigerator Competitors

Dawlance

Samsung

L.G

Waves

PLACEMENT

The dist r ibut ion set-up of PEL has undergone many

changes.

In 1988 the set up was very s imple. There were only

four sale of f icers who use to manage area of f ices

in Mul tan, Rawalpindi , Lahore and Faisalabad.

1989 the company decided to form an ef fect ive

dealership network. The company had i ts dealers in

a l l major c i t ies.

In 1993 management p lane to form a region to

fur ther improve the dist r ibut ion system. The whole

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country was div ided into four major regions. 1996 i t is fur ther

improve by increasing region f rom 4 to 6.

Dist r ibut ion system of PEL is designed in such a way as to cover the

whole market and ensure t imely del ivery of products to the consumers.

Detai ls of their d ist r ibut ion setup are given below.

PEL has two channel levels.

( i ) Direct Market Channel

I t has no intermediacy level . The Corporat ion, through sales of f icers,

d i rect ly sale to large organizat ions and corporate sector .

( i i ) Indirect Market Channel

I t is a channel wi th one or more intermediary level . The general publ ic can

buy PEL products through author ized dealers.

PEL has been network; Regional sales force is connected wi th dealer .

Core customers are di rect ly at tached. Dealers are also v is i t and analyze

dist r ibut ion system.

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During the select ion of dealers for PEL, they consider =>

Worthiness of dealers, => Potent ia l demand. They of fer them incent ive,

schemes for cost sales and always adopt pol ic ies in response to

compet i tors.

PRICING

Prices are kept according to compet i tor level . PEL

considers market should not shr ink because of pr ic ing.

Pr ices do not depend on seasons.

The pr ices are st r ic t ly observed by the Co e.g. A dealer

sel ls a product below the pr ice given by company to any

customer then the company can f ine dealer up to 5000 Rs.

and can cancel h is dealership. The company has appointed

var ious “ Informers “who constant ly v is i t and check that company pr ice is

being maintained. These people inform the company i f any i r regular i t ies in

pr ic ing and then company take appropr iate act ion against dealers. Pr ic ing

is important to contro l sales. Pr ic ing depends upon market condi t ions.

Market ing Manager is independent in h is region but has to get approval

f rom company for g iv ing more incent ives to dealers. The dealers p lay

important ro le in sales.

SEGMENTATION

( i ) Geographic Segmentat ion

Segmentat ion is done on the basis of geography. Pakistan is d iv ided into

two zones; => North, => South.

North Zone

North Zone includes:-

F Punjab

F NWFP

SOUTH ZONE

South zone includes:

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F This zone Sind

F Baluchistan

Regions

There are s ix regions of PEL in Pakistan. They are:-

1. Karachi

2. Lahore

3. Mul tan

4. Gujranwala

5. Rawalpindi

6. Faisalabad

PROMOTION MIX (APPLIANCES)

ADVERTISING

The object ives of advert is ing are:-

1. To increase sales

2. To increase recal l of products

3. To restore message in consumer’s mind

MESSAGE FOR REFRIGERATOR

“Al l New PEL, Al l New Technology, Al l New

Sty le” .

MESSAGE FOR AIRCONDITIONER

“Every Second Air -condi t ioner sold in

Pakistan is PEL, so we are # 1

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TYPES OF MEDIA

1. Electronic Media

I t inc ludes T.V. i .e. Geo, ARY etc.

2. Print Media

( i ) Nat ional Newspaper e.g. Jang, News, Dawn and etc.

( i i ) Magazines => Herald, News l ine, banking business.

3. Out Door Media

( i ) Boarding

( i i ) Neon Signs

( i i i ) Tr i Vis ions

PEL uses al l these above ment ioned Media Act iv i t ies to promote i ts

products.

INCENTIVES FOR CUSTOMERS & RETAILERS

PEL uses “Push and Pul l Strategy ” for at t ract ing dealers and customers.

The main aim is to push dealers to sel l PEL products and pul l customers

to buy products.

INCENTIVES FOR DEALERS

1. Credi t for s ix ty days

2. Rs.400/- Per set i f dealer sel ls the target No. of sets.

3. Haj j scheme for dealers

4. Car is g iven to best dealer which set target

5. Dubai tours.

CUSTOMER

For customer PEL gives some addi t ional g i f ts wi th products i .e. Wal l

Clock, Watches.

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Power DivisionAppliance Division

Telecommunication


PUBLIC RELATIONING

In promot ion mix PEL considers value of publ ic re lat ionship because i t is :

1. Qui te Inexpensive

2. Publ ic Relat ions have more Credi tabi l i ty then publ ic re lat ions

3. Publ ic re lat ions can increase sales i .e. sponsor ships of cr icket

matches.

BCG MATRIX

PEL divides its Strategic Business Units (SBUs) into the following divisions;

Appliances Division

Power Division

Telecommunication Division

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The appliances division is considered as the “Star” as its market share as

well as growth rate is high.

The power division is considered as the “Cash Cow” for the company as its growth

rate is relative low but it has a great market share

The telecommunication division is considered as “Dog” because company seemed it

as not profitable and hence now company is not investing in this division.

PEL has no “Question Mark” in its BCG Matrix

COMPETITIVE STRATEGY

The competitive strategy of PEL is that it has a

wide range of products and at relative low prices.

•

PEL focuses on cost leadership strategy in its

power division appliances. The prices of its power

division appliances are high but they are of very

high quality. PEL has a competitive advantage of

its brand name.

•

PEL has high quality products both in appliances and power division because most of the

raw materials are imported from different countries and these raw materials are of very high

quality.

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PurchaseRaw Material

Dispatch Order Receive

Raw MaterialStore

ProductionFinished

Goods Store


Market share of air condition

BUSINESS PROCESS ANALYSIS

The raw material is processed in the production departments of different products

andcontrolled by their divisions. This raw material is put into the process where the

qualitycontrol inspection is occurred at every stage of production, and defected units

areseparated from the good units. The quality checked products are packed and then

sentto the finished goods stores in the factory. The finished goods store

departmentsmaintain the inventory of the finished goods and issue a units receiving note

toproduction department as a proof. On the other hand units received are entered in

thesystem of network of the company.

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The Sales department receives orders from the customers and confirmed the

orders ifstock are available in the factory. The units from finished goods store are sent to

thecustomers by the dispatch department after receiving request from the

Sales department.

DIVISION OF LABOUR

In Pak Elektron Limited (PEL), two types of employees hired

1. Permanent Workers

2. Temporary Workers

Temporary workers are employed for about 6 months, and when the seasonconcludes

the temporary workers are laid off. Temporary workers are employed ashelpers and

assigned those jobs where skills are not required.

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46

LEARNING AS AN

INTERNE

EPART

3


DUTIES

Throughout the duration of our Internship, we were assigned the

following tasks which we were supposed to work on:

During first week, we observe company culture, rules and

regulation, norms and the working of Marketing

department (AD). We observe marketing manager

Mr.Kashif Jafri and Mr. Shahid.

We were asked to check the cards and envelop for if there

are some card with wear and tear and not printed well.

We were assigned a task to prepare a PowerPoint presentation for marketing

department for their meeting where they have to discuss the current situation of

product and market.

Task assigned to us was to calls the customers and inform them about the delay in

the delivery of their orders. We called several customers and inform them the

reasons of delaying their orders. As there were some changes taking place in

government policies and taxes, so our finance department took some time to finalize

the price list. So supplies delayed for about 4 to 6 working days.

We visited many departments for different assignments like accounts and finance

departments for signing of different documents and delivery of various documents.

The most important task that was assigned to me was to conduct a survey for

Appliance department regarding the products at display and sales of various

appliances at dealer’s shop.

We have written a proposal on how to conduct this survey and what areas I will

cover in it and receive an acceptance from the Marketing manager to conduct the

survey.

We also have designed a questionnaire to obtain the desire level of information form

the survey.

We have visited 25 dealer shops to conduct this survey.

We also have joined staff in promotional activity at Hyperstar for its home

appliances.

ACCOMPLISHMENTS

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The most promising accomplishment at PEL was to do a field work and to conduct a survey

for Appliance Department.it was really a great experience for me.to deal with giants of

dealer market and to fetch the desired information was really a

tough job at the start but after some time everything settled and

went smooth.

We are going to share the detail of this survey below:

We have asked to conduct survey of 20-25 dealers’ shops. The

main purpose of the survey is to check for the displays of various

shops and to check in what ratio Pel products and competitors’ products were there and to

know the sales of all the brands available at the display.

We have submitted a proposal to Mr.Kashif Jafri about this research and he had accepted

it. He asked us to do a sample survey to find out if all the required information can be

obtained from it.

We have completed the survey and let it be checked by him. All the required information

cant not be obtained by it so we have made some amendments in the questionnaire. We

have conducted our sample survey at Abidmarket which is a well-known market in term of

home appliances shops.

After marking amendments in the questionnaire we have surveyed Walton, Ghazi Road,

General Hospital, Main Bazar, Ismail Nagar, ChungiAmarsidu, Peco Road, College Road

areas to obtain information regarding the survey.

We have presented the finalized report to Mr.Kashif jafri.

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NEW KNOWLEDGE ACQUIRED

Some new things, which we have learned here, are:

The way to work individually as well as in groups under

relaxed and stressful environment.

Patience is very important in dealings, as anger can lose your

customer.

To increase your sales and stay in competition with top brands it is necessary to

keep your dealers happy by giving them incentives.

The way to deal with your customer’s complaints in such a way to satisfy them.

The way to behave in business environment

Importance ofdocuments

Importance of shelf spacing of your products in market.

We have learnt how much promotional activities an integral role in the growth of a

product.

How to deal with people and how to obtain information from them.

How to work in a group and how to lead it and how to tackle minor and major

disputes.

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PROBLEMS ENCOUNTERED

As such we didn’t face any type of problem during our

internship. The only thing I found problematic was that it was a

bit harder for me to take time from employees to teachme new

things and the working of Appliance department from their

extremely busyschedule. Initially, we had difficult time in

forming relationship with staff and felt uncomfortable in the

new place with new people. However, after some time, we

becamea part of it just like everyone else and felt completely

comfortable. The real problem we faced in the PEL was the

difference between what we had learnt from the books and what was in practiced. Practical

application of the theories learnt during academicsessions was a great challenge, which we

had overcome by the cooperation of the staff.

There was also a problem that we have assigned a field work, a survey, and for that reason

my stay at the office was less than we expected and that’s why we have learned a little

about the department working instead we have learnt more about the market and the

product image in customer’s mind and the dealers as well.

HOW EXPERIENCE IMPACT MY CAREER

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Our internship experience has given me a realistic

preview of practical life. Now we feel that we better

prepared to enter the world of professional work. We

have come to know and been appreciated by a number of

professionals who are lending their services to the PEL

for more than a decade. We feel honored that we have

worked with such experienced professionals. We must

admit that such interaction in this respectable

professional community will help me in seeking out good

job opportunities in the near future.

Our knowledge of Microsoft Office especially MS Excel came in handy while

working here in PEL, as daily reports were made in Excel .Our knowledge of

Marketing Research and Marketing Strategies helped us while working with

Mr.Kashif Jafri (Marketing Manager) whatever we asked from him, he was so

kind to guide us in detail. So, our urge for learning in field of Marketing

Research and Marketing Strategies helped me a lot. We learnt in Business

Communication how to interact with clients/peer groups/customers with good

communication skills, which came in handy, here in PEL. We realize the

importance of research work for any organization by seeing its application.

Each task we performed was a different experience in itself. By the end of it,

we must say I realize my potentials, we have realized that practical life is not

so easy after all; it takes a lot of hard work and devotion, and not to forget

time. And we now know that if we want we can make things possible, and we

also know how good it feels to having accomplished something and being

appreciated for it. We definitely have learnt things, which will impact our career

and our character.

RECOMMENDATIONS

After looking into different weaknesses and future threats

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We recommend following steps to PAK Elektron in order

to cope with future problems:

PEL must introduce a true decentralize setup in the organization, giving everyone

some grounds for decision making, increase employees involvement in dayto day

planning and retain back the morale plus satisfaction of the employees.

PEL should also consider the importance of Advertisement for its microwaves and

Splits, which plays an important role in increasing awareness, customer

preferences and in maximizing market share. It should also use some

promotional tools like organizing shows, schemes, gifts, etc.

PEL should at least ensure same level of growth and packages amongemployees

working at each level like its competitors are offering to its employeesin order to

retain the old employees as well as to attract new talent.

PEL should also tighten up its monitoring and inspection Networks in order

tominimize the miss-utilization of the resources by the employees and verify thedata

accuracy gathered by them.

PEL should also form especial skilled and efficient sales collection team inorder to

collect Receivables amount from the retailers and the wholesalers especially from

ones located in Karachi, Lahore and at least reduce their payment time period from

180 days to 90 days. Further should also negotiate with them to ensure that we care

for you and for the best in time delivery we need you to be more responsive in

making early payments to the company.

PEL should also ensure equal incentives to all the distributors in order toincrease

their willingness to offer more shelf space to the company.

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PEL should also negotiate with the public leasing institutions in order to

buydesired equipments such as machines, cars at low interest rates than private

ones. Similarly ask them to introduce new packages to the company like private

sector. This will significantly help it in having a tight control over cost of

production.

PEL should also take care of the Economical, Political Factors such asinflation,

Government Policies while projecting the Cost of Production for future because this

will help the company in entering into a fix price contracts for the purchases of

material at a single time similarly than it will be able to charge stable prices to its

customer.

PEL should also adopt any other methodology for projecting upcoming time period

sales which should include seasonal factors consideration in order to getaccurate

future estimates rather than using that silly old average methodology.

Pel should also increase the efficiency of its after sales services department because

after conducting survey I have found this to be the root cause of dealers being rude

with Pel.

Pel should also increase the shelf space for its products because right now it has the

least shelf space in dealers’ shops.

BIBLIOGRAPHY

We were not alone in making this report many people were directly

and in directly involved in this effort. Where ever we went to get the

information related to Pak Elektron Limited, We got the positive

53


response. In the organization there were many persons who should be getting

words of thanks form our side

We are very grateful to the following persons for helping us to complete our internship

under their guidance and supervision.

http://www.pel.com.pk/

http://www.google.com.pk/

Mr. Kashif Jafri (Marketing Manager Appliance Division)

Mr. Sohaib Irfan (Marketing Executive)

Mr. Tanveer Ahmed (Marketing Officer)

Mr. Waseem akram (Merchandiser)

Mr. Abrar Bajwa Marketing Executive)

Mr. M.Afraz (Media coordinator)

Above all we are especially thankful to our ALLAH who always helped us out in tough times

and helped us in compiling this Report.

GLOSSARY

PEL – Pak Elektron Limited

AD - Appliance Division

AD - Appliance Department

IEC- International Electrotechnical Commission

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RSM – Regional Sales Manager

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Documents

PEL Research PU Group Aug-11