In Pakistan, there are a lot of plastic factories, which are working in the Gujranwala, Lahore, and Karachi. These factories are producing the products, which are satisfying the demand of the customers in the Pakistan. The biggest sources of the old plastic are Shah Almi Lahore’s scrap yards and some are present in the Karachi.
Reusable plastic factories often don’t perceive to satisfy the need of the ultimate customer and they don’t research for evaluating the problems of the customers. This industry spends a very little amount on the promotion and it doesn’t use reusability process as equipment for promoting their products. They place their products well and provide the products in the bulk to all the cities and towns of Pakistan. They have well-established network of distributions. In fact, this industry war on the price to each other to attain the maximum share in the market. They often low the prices of products to compete their rivals but sometimes if some one makes the innovation then he enjoys the highest shares in the market.
Government should take the steps to which provide the lower taxation and relaxation to the plastic product manufacturers, in order to attain all the factories registered. Companies should then adopt the more sophisticated techniques to promote their products and also should spend money on the research and development. This industry is anxiously waiting for the WTO 2005 and they anticipate that they would market their products well at low tax payment. They take it as positive competition in this region. 1.1Marketing
“It is a total system of business activities designed to plan, price, promote and distribute want satisfying products to target markets in order to achieve organizational objectives.”
“Marketing is a delivery of the customer satisfaction at a profit.”
“Marketing is typically seen as the task of creating, promoting and delivering goods and services to consumers and businesses.”
“Reusability is the process of the making the things again in the form to be used by the customers.”
SO WE KNOW THE REUSABILITY IS THE PROCESS IN WHICH WE OBTAIN THE PRODUCT FROM THE USED INPUT, SO THE KEY DIFFERENCE IN THE REUSABLE PRODUCTS AND THE REAL PRODUCTS IS THIS, THAT IN THE REUSABLE PRODUCTS THE INPUTS ARE THE USED PRODUCTS OR ILL PRODUCTS BUT IN THE CASE OF THE NEW PRODUCTS THE INPUT IS PURELY A RAW MATERIAL.
Now many manufacturing companies use reusability and the basic objective to reuse the products in the manufacturing is to enhance their repute in the society and saving their cost of the manufacturing. In fact, the proportion of consumers who buy environmentally friendly products at least occasionally is growing gradually. By the mid of 1990s, almost one half of all consumers exhibited such behavior. Only a few consumers will purchase a product strictly because it is environmentally friendly. According to a market research firm a common mistake by companies in neglecting to mention the product’s benefit to the consumer, not just to the environment. Through using the process of reusing the product the companies are achieving these advantages:
1.2.1Advantages of Reusability
1) Saving the scarce resources of Earth: –
Companies or consumers who compel the companies to use the reuse process have the fundamental objective to save the scarce resources of earth, which are really very important for our future generations. These resources are in the shape of many forms. Before the 1990, the companies were using the resources of the earth at a very rapid speed, which seemed really a big threat for the earth hoods. Now, many company have got the knowledge of the reusability and they are practicing it.
2) Saving the cost of production: –
Now the companies are also saving the cost of their production by using this process. Now companies don’t need to attain the raw materials from their far markets, they can easily reuse the material and use it as the input in their manufacturing process. So companies are saving their money and earning the higher profits.
3) Environment protection: –
The products which were used in the past, were thrown and of no use and were causing the great pollution threats for the lives in the surroundings. The process of reusability has overcome this pollution dragon, now companies use this waste again to manufacture the products for the consumers.
“A marketing strategy is the marketing logic whereby the company hopes to achieve its marketing objectives. It consists of specific strategies for target markets, positioning, the marketing mix, and marketing expenditure levels.”
So it consists of the following contents,
a) Target market
c) Marketing Mix
d) Marketing Expenditure Level
“A set of buyers sharing common needs or characteristics that the company decides to serve.” There are three types of the target market strategies, which are as follows, i) Undifferentiated Marketing: –
A market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. ii) Differentiated Marketing: –
A market coverage strategy in which a firm decides to target several market segments and designs separate offers for each.
iii) Concentrated Marketing: –
A marketing coverage strategy in which a firm goes after a large share of one or a few sub markets.
Positioning is always of the product and product positioning is defined as,
“The way the product is defined by consumers on important attributes he place the product occupies in consumers minds relative o competing products.”
Example: In the automobile industry, Toyota and Subaru are positioned on economy, Mercedes and Cadillac on luxury, and Porche and BMW on performance.
“A set of controllable, tactical marketing tools product, price, place and promotion that the firm blends to produce the response it wants in the target market. The marketing mix consist of everything a firm can do to influence the demand for its product .The many possibilities can be collected into four groups of variables known as four P’s: product, price, place and promotion.
It means the goods and services and the combination a company offers to the target market. Thus Ford Taurus model consists of nuts and bolts spark plugs and pistons and thousands of the other parts.
It is the amount of money customers has to pay to obtain the product. Ford calculates the suggested retail prices that it dealers might charge for each Taurus.
It includes the company activities that make the product available to the target customers. Ford maintains the large body of independently owned dealerships that sell the company’s many different models.
It means activities that communicates the merits of the product persuade the target customer to buy it. Ford spends more than 1.2 billion dollars each year on advertising to tell he consumers about the company and its product.
Product| Customer Solution|
Price| Customer cost|
1.3.4Marketing Expenditure Level
Details a supporting marketing budget that is essentially a projected profit and loss statement .It shows expected revenues (forecasting number of units sold and the average net price) and expected costs (of production distribution and marketing). The difference is the projected profit. Once approved by higher management the budget becomes the basis for materials buying, production scheduling, personnel planning and marketing operations.
Now the question arises that where the products are launched and from where the demand is created. So the answer is that in the market Some Information:
“It is a set of potential buyers and customers of a product or a service.” There may be the two types of the market, which are as follow,
1) Consumer Market:
All the individuals and households who buy or acquire goods and services for personal consumption. Consumers around he world vary tremendously in age, income, education level and taste. They also buy an incredible variety of goods and services.
2) Business Market:
All the organizations that buy goods and services for use in the production of other product and services that are sold, rented or supplied to others. Companies that sell to other business organizations must do their best to understand business markets and business buyer behavior. It also includes retailing and wholesaling firms that acquire goods for the purpose of reselling or renting them to others at a profit.
Concatenating the concept of the reusability with the marketing: – History: –
In 1970’s the Japanese were the first who perceived about the reusability. In fact, they were severely encountering with the troubles of the wastes of the used products. It was causing the irritation for the metropolitan population and they were depriving for the fresh air and water due to this trash. So they started research and development project for the eradication of that waste and garbage. They worked in the way to use that garbage in the sense that it would become beneficial for their economy and environment. So that, they can save their scarce national resources for the future generations. It provided them a glance in the market over their competitors. Now this is the time that every company is practicing or trying to practice it.
Current Issue: –
Now it is the world of competition and everybody is seeking for the best opportunities to get in his favor, the same case is in the business world. Now the reusable products have their own marketing strategies and by invoking it a company can attain the advantages over the other competitors. It is the hottest issue of the new business era now a day to save the Earth’s resources and we often hear about the “Keep the World Green”.
2.0Plastic Industry in the Pakistan
The plastic industry in the Pakistan is reckoned as one of the frequent product producing industry. In each one-second, 1200 transactions or more than that are done of the plastic product within the Pakistan. Pakistan is producing the plastic products in the variety of the forms. Intense use of the plastic product is in the households, computer casing, and furniture, and crockery, stationary, heavy and light machinery and in much more industries. 2.1Types of the Plastic:
Our industry is using the two basic types of the plastic as the raw material, which are used for the manufacturing of the products, which are as follows,
1) Pure plastic:
Pure plastic is the kind of the plastic, which is basically formed by the first chemical reactions of the basic elements. This is the most durable and the purest form of the plastic. No impurities are present in it. Plastic is synthetic resigns which are rapidly becoming important in the everyday life. Bakelite and Celluloid are the examples of important plastics of early types.
2) Reuse Plastics:
These are the plastics, which are obtained by the molding the old plastic or the plastic already used plastic. This kind of the plastic has many impurities and has not such a melting point and establishment like the pure plastic. Now the plastic in our industry is classified into the two types further in retailing, i) Scrap: it is the cheaper and lower in the quality plastic than the pure plastic. It is the reuse plastic of 1st class. ii) Kachra: it is the cheapest and lowest in the quality plastic and it is molded so many times. It is the plastic of the lowest class.
These are the plastics types, which are used; in the retailing terms, but in the industry there are so many types of the plastic, which is used as the reused. We are concerned with the market point of view so that’s why we are restricted to these types and in the next sections we’ll discuss then their marketing mix as well. 2.2Marketing Strategies:
For describing the whole details about the reusability in the market industry , we need to know about the process of the product and then other marketing mix and other things which are affecting the market of this.
The concept of the product in the Pakistan plastic industry is not according to the new marketing concept and almost all the manufacturing companies basically are busy in producing the things. But, some of the companies are also using some kind of the innovations. Reality shows that no firm has ever asked the company’s repute in the sight of the ultimate customer. There are a lot of reasons for this deprivation, which are not necessary to discuss right here. Pakistan plastic industry is mostly getting the raw material or pure plastic for manufacturing the products form the international markets. The markets are as under, Iran
The best in quality and the cheapest in the price raw material are collected from the India. India is now getting the good share in the international markets. Most Pakistani plastic companies have switched to the India’s plastic now. In Pakistan, a plant is also started in the Karachi recently. 188.8.131.52Reuse plastic as source:
There is no need of seeking the used plastic for any company out of the country. They collect the sufficient amount of the old plastic for the reusability purpose. The companies collect the old plastic from the scrap yards, and then use it in the processing. Steps to make the raw Plastic (old Plastic):
First the children collect them from the streets and garbage.
Then this plastic scrap is handed over to the owners of the scrap yards.
Then the plastic scrap is classified according the classification of the industry plastic.
Then this plastic is taken in the molding process and then this plastic is kept for sometimes for the drying purposes.
Now the firms collect this plastic as per they required for manufacturing the products.
Plastic products, which are produced by this kind of the plastic, are lower in the quality and cheaper in the price. As we have said the earlier, that in the Pakistan there is no concept of the research and development in this industry so that’s why no innovation from their side is shown. But, the modern trend is copied very rapidly by the plastic industries. I want to give the example of a plastic firm manufacturer.
Azeem plastic industry in the Gujranwala, the owner of this company was the first one who adopted the product of the tray in the plastic, which was first offered by the Taiwan and China only. He manufactured the trays of the same quality in the lesser cost and got a major share in the market due to this successful switching.
The most common thing in the market is copying; this copying is also present within the local market. One company often copies the design and other features of the other company’s product. The quality of the products which are manufactured by the old plastic is not very good and sometimes the plastic is old 5 to 10times this type of the plastic is harmful for the health. So most manufacturers classify the plastic carefully and then use it in the production.
One of the important marketing mixes for the marketers to make the difference with their competitors. World of the information technology is fully utilizing this weapon for growing their sales and revenues. Promotion is of two types basically used in the most of the markets, which are as follows,
1) Electronic Media:
In which we use all the electronic equipments or the facilities for our promotion of the product. For example, T.V, Radio, and Internet are also included in it. 2) Print Media:
This media includes the newspaper, brochures and profiles over the paper. This is also an important stimulus for the promotion of the product and it is very old but still applicable kind of the
Now the companies in the Pakistan, which are using the process of reusability, are not using this tool of the marketing in their strategies extensively. Companies are just dealing with their limited set of the dealers and they just use them to promote their dealings further. In fact, we can say that they never use the reusability as the slogan for promoting their products. As we discuss this matter with an owner of a plastic company then he replied,
“Yes! In fact we never used this process of the reusability as a tool for the promotion even knowing its importance in the society.”
So, most of the owners of these firms just make their customers on their personal or relative’s references and then these dealers sometimes promote them in the market. When we asked the factory owner about the promotion then he said,
“Most of us mean factory holders are not registered by the Government and so how can we promote our firm broadly in the market.”
Another factory owner who has registered his firm in the 1986, was also asked by us the same question then he said that,
“ The Government taxes are so much so that we have no such a profit that we can spend our money on the promotion. I have just once or twice given the advertisement in the newspaper and the newspaper was also a domestic one, and I have also designed a website for promoting but I couldn’t get the good response.”
So still this time the owners of these types of the firms are not using the promotion techniques properly due to the external variables, which are influencing them very crucially. They are not using it as a service to the society for reducing the consumption of the scarce resources of the world. But some industries, which don’t use the promotion properly, are still enjoying the good market share. We asked from the Azeem plastic factory owner about it, which is enjoying more than 300 dealers within the Punjab region, and then he replied,
“In fact, I always prefer honesty and truth in my dealings and my dealers further transmit my message to others so now I am enjoying the good share in the market.”
So different firms are using the same or other techniques for their promotion but they use the reusability process as tool for promoting off and on or never. 2.2.3Placement:
The third very important and influencing factor for the marketers and each and every marketer must consider it for generating the good revenues and return of their efforts. Placement is concerned to the availability of the product to the target customer or market. So question arises that where the firms, which use the reusability process, place their products. As we have seen earlier that the quality of the reusable plastic is not as good as of the new and pure plastic. So it is dangerous for using the reusable plastic for the containers of the eatables, because the poisonous elements of this plastic can be mixed with the eatables and can be injurious to the health.
So most of the products which are made by the old plastic are of external use of human beings, such as the telephone sets, CD covers, mirror frames and in the wires. In the manufacturing of Wires, totally reused plastic is used. So the target customer is very sensitive to choose in such kind of the cases. If some company is in the Melamine items then it can use the pure plastic or the plastic of the first used otherwise the plastic would be harmful. So the companies of these firms carefully segment their ultimate consumers according to their demand and then target them to the wholesalers or retailers. In the toys industry, mostly the reuse products are used. Mostly products of the plastic are of many varieties and so that’s why the wholesalers or retailers buy them in the bulk and variety.
A plastic company in the Gujranwala totally uses the old plastic in their manufacturing. The company is not registered and the company is
manufacturing the wheel cups of the tires and they make them available in the market in the bulk. They have made the good contacts with the dealers. Usually they provide the FOB to the destination. But now a day the companies prefer that the dealers themselves would come and get their products to the places where they want. So companies are now a days looking restricted to the manufacturing only, and their agents or they themselves contact to the dealers and ask them to collect their required matter.
Each company tries their level best to provide their products more easily to the customer. So they use the mass distribution. This can be better illustrated by the example given below,
During surveying the retailers in the market, it is observed that the companies have their good networks to provide the products to the retailers. Its evidence is the reply of a retailer, who says that
“We collect the most of the products from the Green plastic industry situated in the Shah Almi Market Lahore, they provide the best things in the bulk according to the demand of the market.”
It means that Green plastic industry is placing their product very well that the retailers are happy to have their products.
Critics and most of the writers discuss this marketing mix at the prior to all others. We have already discussed that the price is the amount of the money a customer pays for having the benefits of the service or the product. So now we discuss the price in the terms of our focused industry.
Price is the leader element in the reusable market. This is the most frequent war weapon used against the competitor in the market for attaining the shares. Here all the competitors are competing on the basis of the price. Price is playing the key role in the market. This factor also becomes the more vital that promotion, customer need are not emphasized, so it is the basic war, which an owner keep in its mind. On the basis of the price our company is competing with the foreign industries as well, an example, which is given above of in the product about the tray, now in the further illustration it would be seen that how Azeem Plastic factory compete with the China and Taiwan made trays on the basis of the price.
“The owner of the Azeem plastic industry fond that the cost of the tray is just only 55 rupees if it is manufactured in the factory and it included all the costs. So in the market price of the China and Taiwan made tray were Rs.150. So he offered his product in the Rs.110 and his product sold like a hot cake in the market and got a major share in the market as well.”
This is how Azeem Plastic industry penetrates in the market. They provided the same quality plastic trays, which were composed of the old plastic and were used in the households very frequently. The owner of this factory used the “Market penetrating pricing”, which can be defined as, “Setting a low price for a new product in order to attract a large number of buyers and a large market share.” The pricing strategy, which was used by the owner of this factory, is according to the all requirements of the market penetrating pricing. He reduced his cost of production and distributed it into the market massively.
Now the same company practiced another pricing strategy as we discuss above its one, this company compete with the plastic factories in the market with a different kind of the price sword. We illustrate it below,
“When Azeem plastic factory got a major share in the market then other plastic factories took interest in the manufacturing of the same kind of the trays. Some companies manufactured the products in their factories and they also acquire the same costs for manufacturing it. But they want to enter the market with the “Market Penetrating pricing” and they offered their product in the market in just the Rs.80. Now owner of the Azeem plastic industry at once became conscious and he decided to stabilize its price and give more relaxations to his dealers. He strictly bounded his dealers to sale the trays on the same rate as before but he gave more margins to his dealers.
Now the people took the product of the Azeem Plastic industry as the more quality capable because they were the pioneer in the Pakistan for this product and customers perceive the quality of the Azeem plastic industry is good that that of the trays, which are offered in the market at the lower price. So again the competition became a healthy factor for increasing its growth of revenues. But after sometimes they reduced their prices and again competed with their competitors on the grounds of the lowering price.”
The strategy, which was used directly or indirectly by the Azeem plastic industry, is one of the influencing marketing strategy for price. This is somewhat related to the “Marketing skimming pricing”. Marketing skimming pricing is defined as, “Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price.”
So here, we come to know that the companies use different techniques for the competing the competitors on the grounds of the pricing. In the above example, the owner of the factory used the two different and opposite techniques for competing the external and internal competitors. He used the market penetrating pricing for excluding the external competitors and used the market skimming pricing for competing the internal competitors. The company showed the dual behavior for two different situations and it kept its share good in the market for this particular product.
But sometimes the situation may be quite different as Zahid Masood plastic company, which is unregistered and situated in the Gujranwala. The owner of this factory says,
“We usually don’t compete on the prices for those products which are already available in the market. The market itself sets the right price for the product and we have to charge the same price, if it is affordable for us, we continue otherwise switch.”
The statement of the Zahid Masood plastic company is right in some conditions of market. When many companies manufacture the same product and it is quite often in the case of the reuse plastic industry, then the customer becomes rational. He can logically think about the quality and price of the product and can compare with the alternatives. So margin of getting maximum revenue automatically shortened for the companies, because, now customer has sufficient knowledge of the products. In these situations the customers can set the price of the product with the help of fluctuating the demand. So market impose a particular price for that product and all the companies have to recognize it. Such as the rate of the CD cover in the market is same as of Rs.5.
Now how the reuse plastic products can compete with the pure plastic products?
The answer is quite simple the quality of the reuse product are not as good as of the pure plastic products and so they are cheaper automatically. The companies of reuse plastic products usually keep their price low and try to offer the good quality as well and some companies have got success in their goals as well.
Zahid Masood plastic company is manufacturing the lunch boxes as well. This company is using the old plastic for manufacturing the lunch boxes and they try their best to get the one time used plastic for manufacturing the lunch boxes. They have achieved this by proper searching the market of the raw material and then properly manufacture the lunch boxes those are not injurious to the health. One beneficial pint for this company is that the prices of their lunch boxes are lower than the price of pure plastic lunch boxes. So they are competing well.
When we analyze the market then we come to know that the reuse plastic products are not frequently used in the products those are directly related to the eatables. So excluding this segment the reuse plastic companies are competing well in order to attain good market share.
One more thing, that retailers usually have three qualities in their shops. We already discuss these qualities. But now we discuss them in the terms of the price.
“Ahsan Crockery store on the Alang Bohar gate Multan is a well known plastic retailing shop, he told us,
“ The plastic tub is available in the three kinds of the qualities and the prices for these three kinds are different, such as the price for the new plastic tub is Rs.140 and the price for the Scrap plastic tub (reused plastic) is Rs.110 and the price for the Kachra plastic tub is just only Rs.70.”
So the prices of the pure plastic products and reuse plastic products are different on the ratio of½. The prices of the reused plastic products will always be less than the prices of the pure plastic products.
Government should provide the relaxations in the taxes, which is the biggest problems, which these firm owners are facing.
Government should concentrate on this industry, while this one is a productive industry of Pakistan.
Government should provide the loans on the easy and lower interests.
All the companies should be registered.
All the companies should carefully analyze the plastic for the health concerns and then should manufacture the products from it.
All the companies should spend some budget for the promotion.
All the companies should spend on the Research and Development.