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					                        INTERNSHIP REPORT ON
                    PAKISTAN TOBACCO COMPANY




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Internship Report   3
                                        PREFACE

       If we mull over the significance of internship program then we will be able to bare the
facts that internship enhance ones practical loom towards work and provide maximum
chances for learning, which will obviously help out candidate in the practical fields. The
intention at the rear about internship program is that the students can analyze, observe, feel,
examine the organization environment and equip themselves with the tools to face the ever
shifting challenges in the organizations. In short internship plays a pivotal role in the future
sensation & stir of the candidate. This Report is specially meant for the student of MBA . It is
concerned to a brief study of the marketing operations, Function, Tasks and Services of
Pakistan Tobacco Company.
In preparation of this Report is have tried my best to provide all Possible information about
the operation, function and tasks of Pakistan Tobacco Company in brief and comprehensive
form. It also includes a brief department worked during internship. I have also tried my best
to use simple and easy words and language.
This report is an anthology of my views pertaining to Pakistan Tobacco Company operations
& practices. In my view it is a credible and comprehensive compilation of facts. In this report
I wrote principally on the issues pertaining to job duties & responsibilities, operations &
practices and its future prospects with some recommendations.
When the time came to give this information a convenient shape I was confronted with a
dilemma of what to put in. One leeway was to include all details with explanation & second
preference was to point out some worthy issues with some details. Last solution looked more
practicable to me therefore I opt for second solution i.e. to present some relevant feasible
details. These details entail information about management philosophy, practices, and
functions, strong and weak areas of Pakistan Tobacco Company.
I take this opportunity to express my gratitude to all who helped me in the preparation of this
valuable report.




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                                 DEDICATION

I dedicate my work to my most respectable parents and teachers whom prayer made
me able to have such an opportunity of working in the Pakistan Tobacco Company and
get experienced




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                             ACKNOWLEDGEMENT


All praise to Almighty Allah, the most merciful and compassionate, who give me skills
and abilities to complete this report successfully
I am grateful to my parents who are always been a source of encouragement for me
throughout my life and from start to the end of this report
I am thankful to all my staff members so Pakistan Tobacco Company.
I found every one very co-operative and helpful for providing me the Theoretical as
well as practical knowledge about the function and operation of the Pakistan Tobacco
Company.
I like to express our gratitude to Ali Raza (Area Manager),Gulsher
(TMO) and the whole Pakistan Tobacco Company
team that helped me by providing all the needed information i needed to
complete this report.
I express my greatest gratitude to my kind-hearted Supervisor Fahad who was the
Person who made me able to write this report, His enthusiasm shows the way
forward to me to achieve this success and who kept me in high spirit through his
appreciation. He helped me a lot each time I went up to him.




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                                                Table of Contents


  EXECUTIVE SUMMARY ................................................................................................... 9
  WHAT IS TOBACCO?..................................................................................................... 10
  HISTORY OF TOBACCO ................................................................................................ 10
  Tobacco in 1800s: ........................................................................................................... 10
  First commercial cigarettes:............................................................................................. 11
  Tobacco in 1960:............................................................................................................. 11
  Tobacco in 1970s: ........................................................................................................... 11
  Tobacco in 1980s: ........................................................................................................... 11
  BRITISH AMERICAN TOBACCO .................................................................................... 12
  HISTORY OF BAT .......................................................................................................... 12
  WHAT IS BAT TODAY ? ................................................................................................. 12
  PAKISTAN TOBACCO COMPANY ................................................................................. 13
  MISSION & VISION STATEMENT .................................................................................. 15
  VISION............................................................................................................................ 15
  MISSION ......................................................................................................................... 15
  MAJOR PLAYERS IN PAKISTAN‟S MARKET ................................................................ 16
  PRODUCT ...................................................................................................................... 16
  STRUCTURE HIRERICHY OF PTC................................................................................ 19
  ROLE OF AM .................................................................................................................. 21
  ROLE OF TMO & AREA TEAM....................................................................................... 21
  TRADE MARKETING & DISTRIBUTION (TM&D): .......................................................... 21
  AREA STRUCTURE & DISTRIBUTION SETUP ............................................................. 22
  SALESMAN ATTACHMENT (DSD & VDSD) .................................................................. 22
  SALES TARGET TO THE SALESMAN ........................................................................... 23
  CUSTOMER RELATIONSHIP MANAGEMENT .............................................................. 23
  MAJOR DOCUMENTS OF DISTRIBUTION .................................................................... 23
  TRADE-MARKETING OFFICER –ATTACHMENT .......................................................... 24
  DISTRIBUTION STRUCTURE ........................................................................................ 25
  SALE PROMOTER ATTACHMENT ................................................................................ 26
  ATTACHMENT WITH SPC ............................................................................................. 27
  ADMINISTRATIVE OFFICER ATTACHMENT................................................................. 30
  COMMUNICATION CO-ORDINATOR ATTACHMENT ................................................... 30
  RCE (Regional Communication Executive) ATTACHMENT ............................................ 31


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  IMPORTANCE OF ONE-TO-ONE COMMUNICATION ................................................... 33
  PURPOSE OF STARTING PROJECT SKY WALKER ................................................... 34
  SKY WALKER STRUCTURE HIRERICHY...................................................................... 35
  SUPERVISOR ATTACHMENT ....................................................................................... 37
  AREA MANAGER (SKY WALKER PROJECT) ATTACHMENT ................................... 38
  REGIONAL MANAGER (SKY WALKER PROJECT)                                          ATTACHMENT ........................... 39
  DEPARTMENTS OF PAKISTAN TOBACCO COMPANY ............................................... 41
  SECONDARY MANUFACTURING DEPARTMENT ........................................................ 42
  HUMAN RESOURCE DEPARTMENT ............................................................................ 42
  EH&S DEPARTMENT ..................................................................................................... 43
  SECURITY DEPARTMENT............................................................................................. 44
  ENGINEERING DEPARTMENT ...................................................................................... 44
  SWOT ANALYSIS OF SKYWALKER PROJECT............ Error! Bookmark not defined.53
  PEST ANALYSIS ............................................................................................................ 46
  FINANCIAL ANALYSIS ................................................................................................... 48
  RATIO ANALYSIS........................................................................................................... 55
  Conclusion ...................................................................................................................... 61
  RECOMMENDATIONS ................................................................................................... 62
  APPENDIX ...................................................................................................................... 63




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                               EXECUTIVE SUMMARY


One of the great pleasures of writing the project is acknowledging the efforts of many people
whose names may not appear on the cover but whose hard work, cooperation, friendship
and understanding were crucial to the production of this report.
To get the first hand knowledge, one should put itself in practical and natural environment.
This is the utmost purpose of internship, which we supposed to do for at least six to eight
weeks. Pakistan Tobacco Company is a well-reputed multinational organization. PTC uses
state of art technology in every department. It is great prestige and honour for me to work in
an environment, which has utilized our energies to fullest. Being internee here I have learnt a
lot, and environment here was friendly and conducive for learning. This introduction is
regarding to report, which consists of Background of study, Purpose of Study, Scope of
Study, Methodology of Research.
During my 6 weeks of intern ship, the aim of my struggle is to know about the market and its
difficulties. I have been attached with different PTC's officers, from whom I learned market
exposure ,management, structure hierarchy and market knowledge. I also have been
attached with salesman and SPs.
This internship report carries all information about Pakistan Tobacco Company and my
internship working areas.




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                                 WHAT IS TOBACCO?


The tobacco plant is in the same botanical family as tomatoes, potatoes, peppers or
eggplants. An adaptive species, it can be grown economically from 50° Northern to 40°
Southern latitude.
Tobacco is a green, leafy plant in warms climates. After it is picked, it is dried, ground
up, and used in different ways as,


      Cigarette Pipe or Cigar
      Chewing Tobacco (smokeless tobacco or chewing tobacco)
      Snuffed Tobacco (sniffed through the nose)


More than 100 countries grow tobacco. China grows the most, then the USA, Brazil,
India, Zimbabwe and Turkey. Tobacco thrives in poorer soils, providing farmers with a
welcome alternative crop. In many cases, it provides a higher income than any other
smallholder crop.    It integrates well into environmentally friendly crop rotations,
benefiting subsequent crops like maize. (source internet)


                              HISTORY OF TOBACCO


Tobacco has a long history in the America. The Indians of Mexico engravings show
tobacco use. These drawings date back to somewhere between 600 to 900 A.D. tobacco
was grown by Americans Indians before the Europeans came from England, Spain,
France and Italy to North America. Native Americans smoked tobacco through a pipe for
special religious and medical purposes. They did not smoke every day. Tobacco was
given to Christopher Columbus as a gift from the Americans Indians. The tobacco was
later taken back to Europe where it began to be cultivated all over the country. John Rolf
was the first European to cultivate a successful commercial crop in Virginia in 1612.


                                     Tobacco in 1800s:


Many people had begun using small amounts of tobacco. Some chewed it. Other
smoked it occasionally in a pipe, or they hand-rolled a cigarette or cigar. On the average,
people smoked about 40 cigarettes a year.




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                            First commercial cigarettes:


The first commercial cigarettes were made in 1865 by Washington Duke on his 300-acre
farm in Raleigh, North Carolina America.
                                    Tobacco in 1960:


In 1960s it was recognized as health hazard by the doctors. Soon after the Cigarette
companies were required to print surgeon‟s warning on packs of cigarettes. In 1969
tobacco advertisement was banned on TV and Radio. But it did not take effect till 1971.
In 1964, there were 70 million smokers in the United States, and the tobacco industry
earned $8 billion a year. Pall Mall was the leading brand of cigarette in the United States
for the 1st half of the „60s, and then Winston-brand cigarettes led until the‟ 70s.


                                   Tobacco in 1970s:


Cigarettes have become the most heavily advertised product by this decade, with
Winston, Pall Mall, Marlboro and Kool being the leading brands. In 1972, Marlboro
became the best –selling cigarette in the world, and subsequent introduced Marlboro
lights, which many mistakenly saw as a “safer” cigarette. Cigar consumption increased
as well, with Americans using 9 billion a year. A British study sales bring in more money
than it costs in health problems and disabilities.


                                   Tobacco in 1980s:


The 1980s was a time of health awareness. However, tobacco still pervaded society. In
superman 2, Lois Lane (then a role model for teenage girls) begins smoke Marlboro
Lights. Philip Morris purchased 22 exposures of the brand in the movie.


                                   Tobacco in 1900s:


FDA declares nicotine a drug in 1955. Under age sale was prohibited.


                                   Tobacco in 2000s:



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Tobacco faced different bans and restriction by government and anti Smoking lobbies.
                                                                      (source internet)


                         BRITISH AMERICAN TOBACCO


British American Tobacco has been in business for more than 100 years, trading through
the turbulence of wars, revolutions and nationalizations as well as all the controversy
surrounding smoking.


                                   HISTORY OF BAT


The business was formed in 1902, as a joint venture between the UK‟s Imperial Tobacco
Company and the American Tobacco Company founded by James „Buck‟ Duke.

Despite its name, derived from the home bases of its two founding companies, British
American Tobacco was established to trade outside both the UK and the USA, and grew
from its roots in dozens of countries across Africa, Asia, Latin America and continental
Europe.

British American Tobacco's brand strategy differentiates it from its competitors and
underpins its approach to product development. The Group continues to build a focused,
segmented and differentiated brand portfolio and allocates resources to a full range of
brands deployed in the key industry areas that offer the most robust source of volume
and profit growth. The Group continues to invest in its four global drive brands - Dunhill,
Kent, Lucky Strike and Pall Mall, which account for 26 per cent of global volumes and
grew by 16 per cent in 2008. Vogue, Viceroy, Rothmans, Kool, Benson & Hedges, 555,
Peter Stuyvesant, and John Player Gold Leaf are also part of the Group's international
brand portfolio, playing a key strategic role in the different regions where the Group does
business.


                              WHAT IS BAT TODAY ?


Today, British American Tobacco is the world‟s most international tobacco group with its
brands sold in more than 180 international markets. With over 300 brands in the
portfolio, the Group makes the cigarette chosen by one in eight of the world‟s one billion


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adult smokers. The Group holds robust market positions in each of its regions
and enjoys market leadership in more than 50 markets. Bat‟s global market share is
about 16%. Almost 90000 people are working for BAT worldwide and it pays some $13
billion a year to government through taxes.



                      INTERNATIONAL BRANDS OF BAT


      Kent
      Dunhill
      Lucky strike
      Pall Mall
      Vogue
      Viceroy
      Rothmans
      Kool
      Benson & Hedges
      555
      Peter Stuyvesant
      Silk Cut




                       PAKISTAN TOBACCO COMPANY


From being the first multinational to set up its business in Pakistan in 1947 and
beginning operations out of a warehouse near Karachi Port, we have come a long way.

From being just a single factory operation to a company which is now involved in every
aspect of cigarette production, from crop to consumer, we have evolved and grown with
Pakistan. However, what is significant about these 62 years is the effort that Pakistan
Tobacco Company has demonstrated in the development of the country. By being
instrumental in the campaign for modern agricultural and industrial practices, we have
helped in the development and progress of the agricultural and industrial sector in the
country. We have been supporting and contributing to various causes of national
interest. Educating growers in the latest techniques and technology in agriculture, a
forestation and free health care in designated areas are but a few examples.



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Throughout these 62 years, our continuous investment in people, brands, technology,
innovation and the communities in which we operate has borne fruit in many ways. We
are deemed as a partner of choice by many, our Environmental, Health and Safety
standards are a source of inspiration for local companies, our industrial relations
practices have led and influenced local practices, and as a result of all these, our
managers are highly valued and sought after people in the Pakistani corporate world
based on the training and exposure we give them from very early on in their careers.

Suffice it to say that the history of the Pakistan Tobacco Company is closely linked with
the development and history of the areas in which we operate. Be it corporate practices,
social investments, advancements in agricultural techniques, or establishing new ways
of marketing and distribution, we have always been instrumental in establishing the
benchmarks against which others are measured.




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                        MISSION & VISION STATEMENT




                                         VISION



                               “1 st Choice for everyone”




                                        MISSION

                             “To transform PTC to perform
   with he speed, Flexibility and Enterprising spirit of anInnovative consumer focused
                                     “Dare to be Different”




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                MAJOR PLAYERS IN PAKISTAN’S MARKET


The major players involved in the manufacture of finished goods are as following.


      Pakistan tobacco company
      Lakson tobacco company
      Mardanwala
      International cigarette Industry
Of these firms Pakistan tobacco company is the market leader with Lakson tobacco
company in second place.


                                      PRODUCT


PTC has always considered it-selves a consumer-focused company. They aim to offer
aproduct that excels in all aspects and exceeds the expectations of the consumer. In this
section, you will find the story of our brands and their origins. PTC has particular
emphasis on its five national drive brands.


Benson & Hedges:
In 1873, Richard Benson & William Hedges started a partnership in London. From the
very start, the idea was to make Benson & Hedges a style statement, which is why the
business started from London‟s fashionable West End. PTC launched Benson & Hedges
in Pakistan in March 2003. Made with the finest hand picked golden Virginia tobacco
from across three continents, the brand is packed with perfection to seal its freshness.
The objective of introducing this brand is to establish the locally manufactured B&H
Lights as the most preferred offer amongst consumers, in the premium lights segment
and to add image to the B&H family by offering a wider product range. It was launched in
the three metros of Karachi, Lahore and Islamabad/ Rawalpindi.


JOHN PLAYER GOLD LEAF:
The story of John Player Gold Leaf has to start from the story of its founder, John Player.
An enterprising businessman, John Player started a small tobacco selling business in
1877 and turned it into a thriving cigarette company, John Player and Sons.




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With a distinct lifebuoy and sailor trademark, John Player Gold Leaf has an identity
entrenched in sailing and maritime adventure. Thus staying true to John Player‟s very
first big brand -Player‟s Gold Leaf Navy Cut cigarettes. Gold leaf is the key value and
volume contributor for PTC. It remains the most aspire brand in Pakistan. From 2000,
the brand is showing continuously growth.
Capstan:
Capstan has a rich heritage, originating in Britain in the 19th century. The brand was
created under the auspices of W.D. & H.O. WILLS at Bristol and London. Capstan has
grown by leaps and bounds to become the fastest growing brand of Pakistan Tobacco
Company (PTC) in the year 2001, recording a staggering growth rate of 104%,
overtaking sales volume of the major competitive brand in the early part of the year, and
consistently outselling it throughout.




Gold Flake:
Gold Flake, like many of our brands, also boasts its origins at W.D. & H.O. WILLS where
it was a premium brand around the end of the 19th century. Launched in 1982, in a 'soft
cup' packaging, the brand took off when it was repositioned in the value for money
segment and later a 'hinge lid' variant was introduced in 2000. Gold Flake is PTC‟s
largest brand in volume terms and is also a significant contributor towards the value
share. A highly successful pack design change in 2004, soon after the new pack was
lunched in the market and Gold Flake smokers accept the new design of the pack, at
this point an aggressive promotion in the market that would ensure the maximum
exposure of competition smokers to the new pack. There are three new variants were
added into the family; Gold Flake 14HL, Gold Flake 10HL and Gold Flake 10SC, in order
to offer the consumers a wider choice.


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Wills King:
WILLS takes its name from the heritage of one of the original Imperial Tobacco
Company families: the Wills Brothers of London. Wills is also a well known brand in
Pakistan.
Embassy:
The third leading volume brand in Pakistan is most popular in the Punjab where it enjoys
a leading position due to its equity and loyalty. Embassy continued its growth in the year
2001fortifying its position in the market. The brand registered a growth of 3% over 2000.
Major focus during the year remained on the introduction of more consumer relevant
packaging variants. In the 3rd quarter of 2001 the brand family was extended with the
introduction of Embassy filter 16ss pack followed by Embassy kings 14HL variant. With
the launch of these variants, the family now offers more choice to its consumer at
affordable price.




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                    STRUCTURE HIRERICHY OF PTC




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                                                  ROLE OF RM


To develop and implement a Regional Trade Marketing and Distribution plan in line with
the National Plan keeping into account the National objectives of the brand, volume and
value share. These objectives are to be pursued and achieved through the most
effective and efficient utilization of material and human resources. Besides this he is also
to proactively act as a Sharper for making his region ready for the new regime of
marketing in the Wake of New Marketing Standards.
The Regional Managers Report to the Head of Trade Marketing and Distribution.
Four Pillars of PTC:


       Growth ........................................................... In terms of Value and Volume
       Production ............................................................... Of high quality products
       Responsibility ................................. Prove to work in a controversial industry
       Winning Organisation .................................. One team one dream all for one
Introduction with the Regional Office Staff :


Mr. Naeem Bhatti ............................................................. Sales Promotion Co-ordinator
Mr. M. Naeem ................................................................... Contingent Fund Accountant
Mr. Masood ................................................................................................ Data Analyst
Resources :
Multan Region is further divided into four Areas. Each area has an Area Manager who
reports to the RM. These areas are:


Multan ...................................................................................................... Ali Raza (AM)
Sahiwal ......................................................................................... Ahmad Ahsaan (AM)
Bahawalpur ........................................................................................... Asghar Ali (AM)
DG. Khan ............................................................................ Sajid Zarar(Area Incharge)
Volume and Shares:                                                                    National               Regional
Total Industry Volume per Month (Million Sticks) ..................... 5814.00                                 1523.00
Total Volume of PTC (Million Sticks) ....................................... 2254.00                             518.00
Market Share PTC ................................................................... 38.77%                     34.04%
Market Share LTC.................................................................... 38.28%                     33.35%
Market Share Others (Mardanwala Brands) ............................. 20.96%                                    32.09%
Market Share ITB (Imported/Smuggled Brands)....................... 01.99%                                       00.51%




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Share of PTC Brands (Own Volume):                                          National       Regional
Dunhill (Premium Category)………………………………..
Benson & Hedges (Premium Category) ................................... 00.10%               00.10%
John Player Gold Leaf (High Category) .................................... 17.90%           28.90%
Capstan Original (Medium Category) ....................................... 12.00%           13.00%
Wills (Kings and International) - Medium Category................... 04.00%                  4.00%
Gold Flake (Low Category) ...................................................... 48.00%     40.00%
Embassy (Low Category) ......................................................... 18.00%     14.00%


                                             ROLE OF AM


To develop and implement Trade Marketing and Distribution Plans and Strategies for the
area, in line with company‟s trade marketing and distribution strategies on brands,
volume, market / value share and coverage objectives to achieve the overall mission.


                                 ROLE OF TMO & AREA TEAM


To assist the AM in the implementation of all assigned TM&D activities in the area in the
most efficient and effective way. Team members also carry out actions to achieve SOP
and merchandizing objectives along with the distribution‟s human and financial resource
management.




               TRADE MARKETING & DISTRIBUTION (TM&D):

TM&D Mission:
Reach our target customers in the most efficient and effective way by becoming
benchmark Suppliers to the trade within strategic channel in every market where we do
business.


Critical Success Factors (CSFs):
There are six critical success factors for the TM&D team and each factor has its own
specific activities:


             1. Strategy and Planning                                           2. Supply Chain Management


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           3. Resource Management                                  6. Information    Management
           4. POP Management (Retail
               Marketing)
           5. Account Management




                    AREA STRUCTURE & DISTRIBUTION SETUP


                                       Area
                                      Manager


  TMO                TMO                  TMO                  TMO             TMO
  Vehari             Khanewal             Multan           Kabirwala          Muz. Garh




                     SALESMAN ATTACHMENT (DSD & VDSD)

Role of Salesman:
Salesmen reports to Field Sales Officer. Matriculate, preferably Intermediate degree holder with
good communication and selling skills.
The core responsibility of salesman is to get order from the outlets and to deliver the stock
requirement in line with the TM&D instructions. Salesmen build excellent business relations with
the shopkeepers to get optimum benefit from trade. Salesmen deliver stocks to the outlets by
following the „Nine Steps of Call‟. Moreover, sales team is also responsible for providing after
sales service in case of any complaint.


                                 NINE STEPS OF CALL
It is important for each Trade Marketing representative to understand and value the NINE
STEPS of call as one of the critical tool to accomplish their roles. These steps provide a logical
sequence to the functions, a representative must perform during every outlet visit to ensure that
they meet their requirements and the call time is optimized.


   1. Preparation
   2. Approach
   3. Stock Check
   4. Presentation
   5. Close
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     6. In-store marketing/merchandizing
     7. Consumer Contact
     8. Administration
     9. Evaluation


                          SALES TARGET TO THE SALESMAN
Sales targets are assigned to the salesmen on the basis of the Sales Operational Plan (SOP)
given to distributors by the section TMO.


                    CUSTOMER RELATIONSHIP MANAGEMENT
Salesmen usually have very good relations with the trade, which they have developed overtime.
The important factor is achieving the portraying behaviour, guiding the retailer in his
business/investment, informing them about company upcoming plan like promotions, budgets,
shortages, etc. Moreover, the regularity of a salesman is very critical in developing good
relations with a particular retailer. Most of the salesmen even have family terms with many of
retailers which add to their best performance.
                         MAJOR DOCUMENTS OF DISTRIBUTION
SD – 20: (Stock Register)
As per the legal requirements of Govt. of Pakistan, Stock Register (SD-20) is maintained by the
distributors on daily basis. This document is maintained by all the distributors of Pakistan
Tobacco Company Limited indiscriminately.
It Shows:
                         SKU wise sales volumes
                         Split of DD, VDD, WS and Village Wholesales
                         Total stock available at month start
                         Stock received during the month
                         On hand stock (at day/month end)
                         Scheme-sale is also recorded separately during the promotion/TO.


               SD – 9: (Annual Marketing Information Register)
This document is also maintained by all the distributors of Pakistan Tobacco Company Limited.
It tells:
                    Market volume/universe/coverage
                    Village coverage and productivity
                    Secondary sales volumes
                    Accumulated sales trends and brand wise sales trends
                    Competition activities

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                   Own promotions and activities
                   Stock procurements




                   TRADE-MARKETING OFFICER –ATTACHMENT


Role Profile of TMO
To develop and execute a territory Trade Marketing and Distribution Plan that meets brand,
volume, merchandizing and promotional objectives for TMO focused outlets, through the most
efficient and effective utilization of time and materials in order to achieve area trade marketing
objectives. Other important dimensions of TMO's job are:
                Distribution Management
                Merchandizing Selection and Placement
                Cycle Activity Execution
                Administration of Record and Stock
                TMO-200 Outlets Visit
                SP Management
                FSO Management
                Wholesale Management
                On Job Training of Field Force
                Promotion Communication
                Development of Good Relations with Trade
                Market Intelligence
                Planning and Execution of all Activities Relating to TM&D etc.




Journey Planning
It is also called monthly activity plan of TMO which is approved by the area manager. These
monthly activities are divided into following main objectives:
                   TMO-200 outlets
                   SP contact
                   DSD contact
                   Rural area visit
                   Whole sale visit
                   Overall distribution/distributor management



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                               DISTRIBUTION STRUCTURE



                                                   TMO



                             SP - U             DISTRIBUTOR            SP - R




                         Accounts
                        Department                 FSO                     Godown




                               Urban Salesmen                 Rural Salesmen
                                  (DSDs)                        (VDSDs)




Distributor Resource Deployment:
Effective Resource Deployment and Proper Management is one of the Critical Success Factor
of TM&D plan for TMO. It is TMOs‟ responsibility to effectively manage human and financial
resources of a distributor and to utilize these resources in the best interest of PTC in the most
efficient way to achieve the set goals/targets. It also includes activities like target market
coverage plan through rationally prepared salesmen beats.
Route Shipment Planning:
TMOs send the distributor‟s lifting plan to the area office considering the estimated requirement
of the month. Then Warehouse Executives prepare and communicate route shipment plan to
TMOs keeping in view the SOP and available resources. Goods are generally sent to the
distributors on receipt of one day advance payment. It is TMO‟s job to ensure remittance, one
day prior to the planned route shipment date.
Urban & Rural Coverage:
Urban coverage through the DSDs is usually planned on twice or thrice weekly service. But the
rural coverage is generally made on twice or once weekly basis.
Merchandising Selection and Placement:
Merchandising process starts with the availability of funds/budget. To merchandize an outlet
following criteria must be followed:



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       Selection by TMO or recommendation by field staff
       50 meter clause implementation
       High visit frequency/percentage of ASU 30
       Selection of material in-store/on-store
       Good retailer behaviour and relations with PTC staff
       Retailer agreed on written contract for safety, protection & maintenance of
         merchandising material.
DRP – (Distributor Resource Plan):
The arrangements to carry out the decided route plan. TMOs manage and monitor the stock
lifting of distributors to avoid any deviation from the route plan, regularly. Also appropriate
measures are taken to carry out the route plan with cent percent accuracy.
                            SALE PROMOTER ATTACHMENT
Role of Sales Promoter:
Sales Promoters report to the section Trade Marketing Officer.
The core function of SP is Communication of product and promotion both. Out of Stock
tracking/topping up, display, merchandising maintenance, consumer contacts, market
intelligence, demand Generation, POP, etc are other important aspects of sales promoter‟s job.
We learned and performed sales promotion activities with the Sales promoters of Bahawalpur
and Multan Areas in the markets of local and in other rural markets
Sales Promotion Activities:
We participated in the implementation and execution of promotional activity „Capstain Original ‟
in the Bahawalpur and in Multan.
      Brand                                       =        Capstain Original
     Activities                                   =        Trade & Consumer
                                                            Promotion.


                                 PROMOTION OBJECTIVES
     To accelerate brand growth
     To strike Morven Gold's and Red & White consumer
Temporary POP Placement: (Point of Purchase)
Temporary POP means the temporary merchandising material placed at sale points/outlets to
communicate the brand or promotion. Commonly used Temp POP material includes:


                     Posters
                     Stickers
                     Buntings
                     Wobblers
                     Mobiles
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                   Shelf Talkers
                   Sun Shades etc.


These are allocated to SPs with certain guidelines of placement. Temporary POP material is
always positioned inside or outside the outlet at prominent places to get maximum attention of
the consumer.
.
                                ATTACHMENT WITH SPC


We spent our full day with Mr. Naeem Bhatti


Role of SPC
Sales Promotion Co-ordinator reports to the Regional Manager. The role is to develop and
execute promotion plans through TMOs, TMEs, HoReCas and key accounts, in line with the
promotion strategy in conjunction with the cycle planning process and to ensure maximum
benefit out of BTL muscle and advancement of communication objectives as part of cycle plan
implementation.


                         Promotion Planning and Execution:


SPC plans promotion with the co-ordination of the regional marketing team keeping in view the
available budget, objectives and type of promotion required.


After the finalisation of promotion mechanics the cycle plan for execution is made. Suppliers are
asked to provide quotations. On receipt of POS, instructions are cascaded for the
implementation and execution.


TM&D team fully participates in the communication of the promotion. Prior to communicate
promotion in the market all SPs, FSOs and salesmen are briefed accordingly, all aspect of
promotion/offer are re-discussed for better understanding to the field force.
Ware House Executive Attachment
We visited Ware House located at Bahawalpur and Multan



                            Role of Warehouse Executive:

Ware house executive is accountable for the supply chain management of stocks from area
warehouse to the distributor.

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Warehouse executive‟s other responsibilities are inventory control, system administration, route
planning, record maintenance and stock management as per Supply Chain guidelines.
The function of warehouse is to provide right product, at right time, in right quantity in an
efficient manner to satisfy customers.
Warehouse Executive is assisted by „Warehouse In-charge‟ and an „Excise Officer‟ in the
routine operations. Area warehouses are controlled by Production & Supply Chain Department.



                                            Remit Plus:


Local distributors are also called remit plus. They get the stock on the same day of remittance of
invoice value in collection account of bank on their own arranged transport. PTC pays them the
agreed ICA per M. Transport expenses (ICA) are claimed on monthly basis.


                                           Collect Plus:


Stock is provided to the collect plus distributors on the next day of remittance on PTC arranged
transport. Route plan is forwarded to all markets every month.
If distributor fails to remit the invoice amount in the bank one day prior, the company will not be
responsible for providing the stock on company arranged transport. In that case, missed route‟s
transportation will be the responsibility of distributor.



                                          Supply Chain:


PTC supply chain consists of the following departments in the same mentioned sequence:




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                                     Supply Chain




                                  Seed/Leaf Department


                                  Production Department


                            Material Management Department


                           Primary Manufacturing Department


                             Stick Manufacturing Department


                                    Factory Warehouse

                                     Area Warehouse


                                  Distributor Warehouse


                              Supply to Wholesale and Retail


                                 Sales to End Consumers




SAP – (System Application Product):
System application product is a highly advanced computer based programme. It is only used by
few multinational companies in Pakistan. PTC head office, factories, regional offices, area
offices and ware houses are interlinked with this programme.
It facilitates the monitoring of all the activities relating to finance, budget, production, supply,
merchandising, etc. in the most efficient and accurate way. The use of SAP in warehouse
operations is as:




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                    ADMINISTRATIVE OFFICER ATTACHMENT


Role of Administrative Officer:
To maintain and up-keep office records & returns according to the specified standards and
retention schedule. To ensure data security and safety as per Company set guidelines. To carry
out all the necessary secretarial works (i.e. letters, returns, telephone/fax, photocopy etc). And
to support all the routine activities of Regional Office.



                              Other Major Responsibilities:

              Office Staff Administration – (Peon, Security Guard, Sweeper)
              Assist RM in completion of every day assignments
              Equipment maintenance
              Premises maintenance



               EH&S Overview - (Environment, Health & Safety):
EH&S Symbol:
The symbol of EH&S is based on the Leonardo da Vinci drawing called „Petruvian Man‟, which
shows the symmetry of the human body. This image is often used to indicate health and
environment awareness. BAT has adapted it by showing the globe behind the figure to
represent BAT's global business.
PTCs’ EH&S Policy to:
Provide and maintain safe and healthy working environment including use of cleaner
technologies and safe systems of work for all its employees and non company personnel on
company premises.



               COMMUNICATION CO-ORDINATOR ATTACHMENT


We spent full day with Cc „Mr. Jahanzaib‟ at Bahawalpur and M,r. Ahad Khakwani at Multan


Role of Communication Coordinator:


Cc is responsible for back check of BA‟s. He is to check the 20% consumer contacts as well .
He also manages the tour plan and Beats of BA‟s. Other tasks are as
      Activity Planner of BA‟s

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      BA‟s Contact Report
      Tracker
      Monthly brand wise report
      Total CC Summary


      FCP of BA‟s
      CC back check
      CC pitch
      Back Check of Log Books
There are 9 BA‟s are working in Bahawalpur and 17 BA‟s in Multan market working on BVS-1
and BVS-4


         RCE (Regional Communication Executive) ATTACHMENT

I spent full day with RCE „Mr. Fahad Gillani‟ at Multan
Role of RCE (Regional Communication Executive)
RCE ensures 100% implementation of cycle instruction in-line with cycle brief given by HO. The
responsibilities of RCE are as following.


Resource Management:
CC (Communication Coordinator)
BA‟s (Brand Ambassador)


Target of Consumer Contacts:
Ensure the 100% target achievement


Quality Consumer Contacts:
20% consumer contacts are checked by Communication Coordinator of RCE.
Third party has been hired to have a back check of consumer contacts. Slab system been
maintained and the incentive to Brand Ambassadors is given on Good Quality Contacts
Percentage.




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                                 PROJECT SKYWALKER

RCE told us about project Skywalker and for the completion of our project he attached us with
Contact Plus team for 3 weeks.



One to One Communication
One to One communication consists of direct connections with carefully targeted individuals
consumers to obtain an immediate response and to build customers relationships. Direct
marketers communicate directly with consumers on one to one basis. One to one
communication is a medium or marketing channel for marketing the products that contains no
intermediaries



Types of One to One Communication
There are seven types of one to one communication which are as following.
   1. Personal selling


   2. Telephone marketing


   3. Direct mail marketing


   4. Catalog marketing


   5. Direct response television marketing


   6. Kiosk marketing


   7. Online marketing


   1. Personal Selling
   Personal selling involves two ways personal communication between sales people and
   individual customers, which can be face to face, by telephone, through video or web
   conferences, or by other means.


   2. Telephone Marketing
   In telephone marketing, telephone is used to sell directly to consumers. It has become major
   direct marketing communication tool. Telemarketing provides many benefits, including
   purchasing convenience and change in product service information.


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   3. Direct mail marketing
   Direct mail marketing involves sending an offer, announcement, reminder, or other item to a
   person at a particular address. This kind of marketing is through singles mailings that
   include letters adds samples. Direct mail has proved successful in promoting all kinds of
   products, from books, magazines subscriptions, clothing, foods and industrial products.


   4. Catalog Marketing
   A kind of marketing through print, video or electronic catalogs that are mailed to selected
   consumers, made available in stores presented online or providing through hand.


   5. Direct Response Television Marketing
   Marketing via television, including direct response television advertising and home shopping
   channel.


   6. Kiosk Marketing
   Some companies place information desks and ordering machines called Kiosk which can
   be in stores, airports and other locations.


   7. Online Maeketing
   Online marketing is a very good communication tool by which companies advertise their
   Product through internet and through online marketing buying and selling are also takes
   place.


              IMPORTANCE OF ONE-TO-ONE COMMUNICATION


The importance of one to one communication is very vast. Now a days, companies are using
one to one communication to reach carefully targeted consumers more efficiently and to build
stronger, more personal one to one relationships with them.


Tobacco Bans:
According to printing rule SRO 1219(1)/2008 health warning took place on the front of cigarette
Packs and it would have prominent colour contrast. Other tobacco bans are as follows,
      All kind of ATL activities.


      Limitations in BTL activities.


      50 meter Clause


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      Consumer Promotions


      All kind of on-store such as Fascias, Tube-shades, Banners etc.


      Consumer contacts with incentives


      Branded key chains, lighter other promo-material which could motivate the tobacco
       smoking.




Smoking has been suppressed in hotels, restaurants and public places. Promotion health
warning took place on the front of cigarette packs. ATL activities were restricted. On-store
merchandising & consumer promotion were banned. While consumer contacts were given the
limitations were supposed to be done any incentive.


IMPORTANCE OF ONE-TO-ONE COMMUNICATION IN DARK MARKET


After the restrictions imposed by local Government and WHO on advertisement of cigarettes, in
this dark market where all the ATL activities are banned so cigarettes companies have only one
option to advertise their product through one to one communication.
Through the one to one communication you can easily transfer your message into consumer
mind. In the dark market where every type of promotional activities ATL are banned and BTL
are limited so in this scenario cigarette companies can hire the Brand Ambassador for their
brand promotional activities. Now a days there is a trend towards more narrowly targeted and
focus on specific consumers, so in this scenario one to one communication can play a very vital
role in smoking industry to capture the end consumers.


PURPOSE OF STARTING PROJECT SKY WALKER
After the restrictions imposed by the Government on advertisement of cigarettes as mentioned
above so, in this dark scenario PTC got only one option to advertise their brands through one to
one communication with end users.
Overview of Skywalker’s Project
PTC hired field force from third party named Contact Plus and HRSG for the Skywalker‟s
project. For the Skywalker‟s project, there are 52 Brand Ambassadors working in Multan and 9
supervisors are supervising them. These 9 supervisors daily report to AM Multan and on daily
basis AM (Project Skywalker) report to RM (Project Skywalker). For the implementation of plan
RM (Project Skywalker) coordinates with RCE (PTC).

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The purpose of Skywalker„s project is to give awareness to the people about the repositioning of
brand Capstain (original). PTC cut off the price of Capstain and 52 Brand Ambassadors make
consumer aware about the new price.


                      SKY WALKER STRUCTURE HIRERICHY




  RCE (PTC)                                    RM (Sky walker)


                                                 Coordinator

                AM (BWP)        AM (Multan)                      AM (Veharri)     AM (Sahiwal)




      CC                         Supervisors




     BA’s                            BA’s




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Schedule of project Skywalker


1st week----------------------------------BA‟s
2nd week---------------------------------Supervisor
3rd week
       First two days----------------------------AM (project Skywalker)
       Last three days--------------------------RM (project Skywalker)




BA’s Attachment


As per induction plan we spent our 1st week with BA‟s. we visited many areas of Multan with
BA‟s. During internship period we fully participated in the consumer contact exercise of    BVS-
4(Capstan original) brand. we learned that it is a very healthy exercise to gain attention of the
end consumer.


Roles of BA’s


BA daily report to team supervisor. It is the duty of every BA to achieve the target of consumer
contacts.
BA---------------------------------------target of 30 consumer contacts daily
There are 52 BA‟s are working in Multan.




Consumer Contacts:


This terminology is used where one-to-one contact with the consumer of competition brand is
made. The consumer of competition is offered an own brand of same value/profile for trial. To
convince the contact and to generate trial, keeping in view the high prestige of brand and
company, below are the few steps guided to perform in the same manner:


              Introduce yourself and company


              Mention best known brands


              Ask if the contact has time and willing to talk


              Find out if the contact has purchased cigarettes for self consumption or for others


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           Then tell the consumer about the brand.




Documents of BA’s:


      Swap sheet


      Tracker sheet


      Route plan


      Data book


Other responsibilities of BA’s


      Route riding


      Pack swapping


      Target Achievement


      Trade relationships


      Pack selling


      Quality of 121 & motivation


                                  SUPERVISOR ATTACHMENT


As per induction plan we spent our 2nd week with Supervisor who leads a team of 6 or 7 BA‟s.
Supervisors daily report to AM of Skywalker Project. we visited many areas of Multan with
Supervisor and learned about how to manage the stock, how to make supervisor report, checks
and control and field force management.
Roles of supervisor
Supervisor is responsible for back check of BA‟s. He is to check the 20% consumer contacts as
well. He also manages the tour plan and Beats of BA‟s. Other tasks are as


      Activity Planner of BA‟s

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        BA‟s Contact Report




        Tracker


        Monthly brand wise report


        FCP of BA‟s


        Checks & Control


        Stock Management
There are 9 supervisor are working in Multan.



         AREA MANAGER (SKY WALKER PROJECT) ATTACHMENT

As per induction plan we spent first two days of 3rd week with Area Manager „Mr. Javaid‟ of
Skywalker Project. We visited many areas of Multan with AM and learned how to control the
field force, checks & controls and how give report to RM. AM follows the FCP which he receives
from PTC. AM of Skywalker daily report to Regional Manager of Skywalker Project.


Roles of AM (Skywalker Project)
AM is responsible for check of the Supervisor‟s team as per fix plan. The other tasks of AM are
as


        Team management


        Reporting


        Checks & Controls


        Market surprise Visits




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       REGIONAL MANAGER (SKY WALKER PROJECT)                                ATTACHMENT
As per induction plan we spent last three days of 3rd week with Regional Manager „Mr. Munir
Ahmad‟ of Skywalker Project. He told us about field force management, team building and
motivation, and resource over view. RM reports to contact plus head office on daily bases.


Resource Deployment
There are three steps involved in resource Deployment which are as following


       Hiring


       Training


       Deployment


Resource overview


The total resource is based on reporting. There are three types of reports that RM receive.


Daily Progress Report


Every AM send this report to RM about its daily Progress it includes


       Quantity of Exchange Packs


       Supervisor Progress


Weekly Progress Report


Every Supervisor sends this report to RM on weekly basis it includes


       Supervisor Overview


       Detail of supervisor Visits


Monthly Progress Report


Every Supervisor make the report of BA‟s and send this report to RM after every month it
includes

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      BA‟s Productivity


      BA‟s attendance sheet


Turn Over Management


Consumer engagement is very tough job so that‟s why some employees left their job due to
work load so it is the duty of AM and RM to motivate their subordinates regularly and by offering
performance based bonuses to reduce the turnover.


Rate of turn over


There is very minute percentage of turnover which is only 5%.


                             Team Building & Motivation

Team Building:


There are two ways to build team;


   1. Take reference from the existing field force


   2. Team can be build by;


            Hiring


            Training


            Deployment


Motivation:


    Target achievement allowances


    Presence allowances


    Bonuses

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Field Force Management


Field force managed according to this hierarchy


BA‟s         Report          Supervisor           Report          AM     Report
        RM




DEPARTMENTS OF PAKISTAN TOBACCO COMPANY

MATERIAL MANAGEMENT DEPARTMENT
This department knew as “MMD”. Flowing are the main sections of “MMD. Prime function of
dept. is providing quality material for production. Local Purchase       (Purchase sundry &
miscellaneous items, on Behalf of company) Traffic (Provide transport for factory and clearing
builties).
Reclaiming (Resale, auction of remaining items).
Godown         (In time supply of finished good to “Zone” For market)




LEAF DEPARTMENT
              The tobacco is received from leaf go downs from the various places. One type of
tobacco is imported and the other comes locally. Lamina is received in the form of cases and
the stem is received in the bags. Both are used in manufacturing of cigarettes. From the Leaf
Reception Room, this tobacco is sent to the primary manufacturing department




PRIMARY MANUFACTURING DEPARTMENT
             This is known as “PMD”. The bale of tobacco is converted into blend in this
department. This department creates differ types of blend with different ratios. The stem and
lamina of the tobacco are treated into blend in this department. The required moisture is added
into tobacco and flavors are added into this. Flavor mixing is known as “casing process”. The
ready tobacco is known as “Cut Tobacco.” This is stored in cut tobacco store. In addition,
through “Automatically 90seconds are taken to fill a machine. According to Product Steward
Policy, “we shall design our products and processes in conformance the principles of
sustainable development for the betterment to the environment and society.”


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            SECONDARY MANUFACTURING DEPARTMENT

       This department is further divided into two departments.
      Cigarette Making Department.
       Cigarette Packing Department.




CIGARETTE MAKING DEPARTMENT
            In this department, the cut tobacco is filled in the cigarettes. The filter rods come
from the Filter Rods Department and they are combined to prepare the cigarettes. There are
different types of cigarette making machines high and low machines. Tow Loga Machines,
which have a capacity of manufacturing 850 cigarettes per minute and one machine, which
have a capacity of manufacturing 8000 cigarettes per minute and two machines, which have
7500 capacities per minute. Eight Mark-8 machines running in this department, which have
capacity of manufacturing 2000 cigarettes per minute. Loga machine run 24 hours.




CIGARETTE PACKING DEPARTMENT
            The cigarettes come in the ready form to be packed here in his section. Deferent
machines are used for the purpose. The material management department provides the packing
material required in this department. The cigarettes are first packed in packets, and then these
packets are put into the outer, which are further packed in the big cartons known as the CBCs.
From the packing department, the cigarettes are transferred to the shipping godowns from
where they are shipped out of the factory.
            According to the speed, there are four types of packing machines running in the
Cigarette Packing Department. GDX2, which have capacity of 380 packets per minute. Another
machine is a soft Cup his capacity 160 or 180 packet per minutes.



                          HUMAN RESOURCE DEPARTMENT

This department is also known as“EMPLOYEE RELATION DEPARTMENT”. Department deals
with the employees of the “FACTORY”. Flowing are the main functions.


      Maintains industrial relation between Labor management and Employer.
      Binomial agreement relation between Labor management and Employer.
       Maintain worker services record.
       Worker Training & Promotion.
       Legal obligation on behalf of Labor and management.
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QUALITY DEPARTMENT
Quality excellence is the foundation for every management, and key for “GOAL” of
CUSTOMERS SATISFACTION.
Consistently provide product and services that meet the      quality expectations of customer.
Actively pursue ever-improving quality through programs that enable each employee to do his or
her job right the first time.




INFORMATION TECHNOLOGY DEPARTMENT
             This department is also known as Management Services Department. It connects
all offices and factories of the company with one computer network function. Following are the
some functions of the IT department:


        IT risk analysis
       Backup cycle
       IT system standing instruction
        System development methodology
        Request for system modifications
        Fixed assets movement
        Email access policy-MEEG (Managed External Email Gateway).
       Internet browser access request/policy
       IT logs


                                    EH&S DEPARTMENT

This department is known as “Environment Health and Safety Department”. This department
provides and maintains safe and healthy working environment including use of cleaner
technologies and safe system of work for all its employees and non-company personnel on the
company premises. Pay due regard to all impacts of its activities on the physical environment.
Comply withal applicable national laws, regulations, and BAT (British American Tobacco) policy
pertaining to environment health and safety. Establish procedures for regularly assessing and
reviewing the EH&S impact of its present and future activities. Adopt a pro-active role to
continually identify cost-effective measures, which it can take to safeguard the health and safety
of its employees, non-company personnel on company premises, the neighboring communities
and the physical environment.




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                                  SECURITY DEPARTMENT

            To ensure that the company property, assets, material & information are protected
from loss, criminal activity, fire damage and other forms form of waste. Thus ensuring that men
are working under congenial environment without any fear, terrorism and sabotage activities are
the functions of the security department. There are seven permanent employees and 44 are on
contract basis. The contract is with the Phoenix Company


                              ENGINEERING DEPARTMENT

            All goods must be checked physically by counting/weighing/ measuring. All receipts
form outside sources other than imported spare will be inspected ensuring that their quality is
according to the specification.
            All goods received from outside sources must be detailed on Goods Receiving
Register immediately on the day of receipt. This register forms the only record of goods within
the factory an interim period until the goods are inspected and finally G.R. sheeted. G.R.


            Register will therefore, always be stored overnight in the safe in shift Manager‟s
Office/Main Engineering Office along with Engineering Stores keys.
            In the event of goods being short, excess or damaged as compared to delivery
Challan / invoices, an endorsement will be made in red against the items on the G.R. Register
and the suppliers will be advised accordingly
STORE RETURNS
New or useable machine spares received from Factory Departments should be accompanied by
Store Return (R 15). New or useable must be recorded on Store Return for new and used
spares respectively to enable correct valuation by the system for used spares i.e. 10% of the
value of stock. For new and reconditioned items the Finance Department will report values.
Training and development
We recognize that getting the right start is crucial to building a successful career. This is how we
approach your early training and career development


      Managerial skills
      Business Awareness
      Performance Appraisal


                              MARKETING DEPARTMENT

The consumer is at the centre of our business. Marketing in the tobacco industry requires skills
beyond the demands of other products. The ability to differentiate our marketing initiatives, to
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manage productive and profitable relationships with our key accounts, to integrate strategies
above and below-the-line and to innovate while always marketing responsibly are the
fundamentals of the marketing challenge


                             SWOT ANALYSIS OF COMPANY



STRENGTHS


      Continuous learning and improvement.
      Sustainable growth.
      Environmental standards achievement.
      Market leadership in the world.
      Being beneficial to the community (Corporate Social Responsibility)
      Diversified workforce and environment.
      Technologically advanced machinery and equipments.
      Good salaries packages.
      Focus on health and safety on the company premises.
      Training and development of its employees.


WEAKNESSES


      Salaries difference between workers who work more and the one who put minimum efforts.
      Technological advancement would decrease the workforce and unemployment will increase.
      Very minimum marketing as compare to its competitors.
      Workers are always under threat because of downsizing.
      Improper distribution of work


OPPORTUNITIES


      Greater opportunity of promoting lower brands in rural region.
      PTC has the potential to further improve the cost reduction method.
      Create a better work environment in GLT department because of more hazards in this
       department.
      Lowering the downsizing will create a good image in the eye of regulatory authorities and
       government.
      Focus on its key brands i.e. high growth like Gold Flack this year‟s growth was around 27%.

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      Export of premium brands


       THREATS


       Some of its competitors are also producing high quality brands like Marlboro by Lakson.
       Internationally some countries are continuously promoting anti-smoking slogans like the ban
       of smoking in Bhutan in 2002.
      Better marketing campaigns by rivals.
       Their well-established brands are highly copied by some local manufacturer.
      The political, economic situation is not stable in Pakistan.
       Limitation of their product,
       Decline in tobacco growth

                                       PEST ANALYSIS

Political


Pakistan‟s political situations have always been in fluctuation. Even then PTC is long since
contributing in the country‟s wealth in terms of taxes and providing employment to hundreds of
people. Although it is never denied that tobacco is hazardous to health but PTC‟s aim is not to
create more customers but to provide quality of tobacco to those who are already addicted.


Marketing Standards: PTC has long accepted that smoking is risky.
“Its business is not about persuading people to smoke; it is about offering
quality brands to adults who have already taken the decision to smoke. “


Economical


As a company it understands that its roots are firmly embedded with the nation‟s, it has been
the part of industrial development in the country. Pakistan tobacco has maintained its growth
momentum during the years scaled new heights with the achievement of millstone and made
progress in the every facets of its business. PTC has contributed RS 26,472 m in year 2007 in
the form of government levies and taxes which is the indicator of how PTC is contributing in the
economic development of the country along with the job creation and installation of advanced
and sophisticated machinery and equipments.


Sociological



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PTC‟s marketing is not designed to “sell smoking”. It is marketing in a long established, mature
product category, where people already know what the basic product is. There would be no
commercial sense in trying to market to informed consumers who do not want the product. Its
marketing is about its brands: retaining the loyalty of the consumers to the brands, and winning
consumers from competing brands. Wherever British American Tobacco markets, its takes the
greatest care to ensure that its advertising and promotion complies with local laws, regulations
and voluntary agreements. As a company with long international traditions and roots, PTC is
also


sensitive to local customs and cultures. It is working with other companies in the tobacco
industry to establish a common basis for clearly understood conduct, which would set the
baseline for acceptable tobacco marketing worldwide. Following are the key features of the
Voluntary Code of Conduct:
• No TV/Radio advertising of the products before 2130 hrs.
• No advertising designed to appeal specifically to minors (<18 years of age).
• No advertisements in the magazines and newspapers, which are directed
principally towards minors.
• No models under 25 years of age to be used to promote the products.
• No promotional events of particular appeal to minors.
• Celebrities not to be used for promotional purposes.


Technological


IT is the backbone of every business; with out it concept of successful business is becoming
impossible in modern business environment.


Process Technology:
• System Application Program (SAP)
• SAP the world leading ERP system.




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                              FINANCIAL ANALYSIS



Balance Sheet                         2009         2008
Non Current Assets
property plant & Equipment            5,952,108    5,599,758
Investment in Subsidiary Company      5,000        5,000
Long Term Loans                       7,310        9,244
Long Term Deposits and Prepayments    19,915       41,172


Current Assets
Stock–in–trade                        5,765,367    4,059,063
Stores and spares                     218,375      190,646
Trade debts                           1,684        2,666
Loans and advances                    48,598       65,917
Short term prepayments                72,483       105,728
Other receivables                     88,147       246,675
Cash and bank balances                47,874       69,172
                                      6,242,528    4,739,867
                                      12,226,86    10,395,04
                                      1            1
Share Capital & Reserves
Share Capital                         2,554,938    2,554,938
Revenue Reserves                      1,705,296    1,053,393


Non Current Liabilities
Retirement Benefits                                739,133
Deferred Taxation                     1,109,847    836,939


Current Liabilities
Trade and other payables              5,037,469    4,324,704
Accrued interest / mark–up            27,659       10,354
Short term running finance            1,300,837    572,397
Income tax liability                  490,815      303,183
                                      6,856,780    5,210,638
                                      12,226,86    10,395,04
                                      1            1


Internship Report                                              48
Profit and Loss Account


                                    21,666,52   18,872,49
Net turnover                        5           5
                                    13,442,06   11,595,73
Cost of sales                       6           6
Gross Profit                        8,224,459   7,276,759
Selling and distribution expenses   2,246,014   1,933,364
Administrative expenses             1,100,814   928,358
Other operating income              226,499     60,551
Other operating expenses            514,665     615,458
Operating profit                    4,589,465   3,860,130
Finance income                      102,826     59,600
Finance cost                        43,802      26,013
Profit before income tax            4,648,489   3,893,717
Income tax expense                  1,626,083   1,361,422
Profit for the year                 3,022,406   2,532,295




Internship Report                                           49
        HORIZONTAL ANALYSIS
FIRST CALENDE YEAR OF DATA           2008
LAST CALENDER YEAR OF DATA           2009
                                                           200   200
Balance Sheet                        2009       2008       9     8
Non Current Assets
                                     5,952,10   5,599,75   106   100
property plant & Equipment           8          8          %     %
                                                           100   100
Investment in Subsidiary Company     5,000      5,000      %     %
                                                                 100
Long Term Loans                      7,310      9,244      79%   %
                                                                 100
Long Term Deposits and Prepayments   19,915     41,172     48%   %


Current Assets
                                     5,765,36   4,059,06   142   100
Stock–in–trade                       7          3          %     %
                                                           115   100
Stores and spares                    218,375    190,646    %     %
                                                                 100
Trade debts                          1,684      2,666      63%   %
                                                                 100
Loans and advances                   48,598     65,917     74%   %
                                                                 100
Short term prepayments               72,483     105,728    69%   %
                                                                 100
Other receivables                    88,147     246,675    36%   %
                                                                 100
Cash and bank balances               47,874     69,172     69%   %
                                     6,242,52   4,739,86   132   100
                                     8          7          %     %
                                     12,226,8   10,395,0   118   100
                                     61         41         %     %




Internship Report                                                      50
Share Capital & Reserves
                             2,554,93   2,554,93   100   100
Share Capital                8          8          %     %
                             1,705,29   1,053,39   162   100
Revenue Reserves             6          3          %     %


                                                         100
Non Current Liabilities                                  %
                                                         100
Retirement Benefits                     739,133    0%    %
                             1,109,84              133   100
Deferred Taxation            7          836,939    %     %


Current Liabilities
                             5,037,46   4,324,70   116   100
Trade and other payables     9          4          %     %
                                                   267   100
Accrued interest / mark–up   27,659     10,354     %     %
                             1,300,83              227   100
Short term running finance   7          572,397    %     %
                                                   162   100
Income tax liability         490,815    303,183    %     %
                             6,856,78   5,210,63   132   100
                             0          8          %     %
                             12,226,8   10,395,0   118   100
                             61         41         %     %




Internship Report                                              51
Profit and Loss Account


                                    21,666,5   18,872,4   115   100
Net turnover                        25         95         %     %
                                    13,442,0   11,595,7   116   100
Cost of sales                       66         36         %     %
                                    8,224,45   7,276,75   113   100
Gross Profit                        9          9          %     %
                                    2,246,01   1,933,36   116   100
Selling and distribution expenses   4          4          %     %
                                    1,100,81              119   100
Administrative expenses             4          928,358    %     %
                                                          374   100
Other operating income              226,499    60,551     %     %
                                                                100
Other operating expenses            514,665    615,458    84%   %
                                    4,589,46   3,860,13   119   100
Operating profit                    5          0          %     %
                                                          173   100
Finance income                      102,826    59,600     %     %
                                                          168   100
Finance cost                        43,802     26,013     %     %
                                    4,648,48   3,893,71   119   100
Profit before income tax            9          7          %     %
                                    1,626,08   1,361,42   119   100
Income tax expense                  3          2          %     %
                                    3,022,40   2,532,29   119   100
Profit for the year                 6          5          %     %




Internship Report                                                     52
VERTICAL ANALYSIS
FIRST CALENDE YEAR
OF DATA                          2008
LAST CALENDER YEAR
OF DATA                          2009
Balance Sheet                    2009        2008        2009     2008
Non Current Assets
property plant & Equipment       5,952,108   5,599,758   48.68%   53.87%
Investment    in    Subsidiary
Company                          5,000       5,000       0.04%    0.05%
Long Term Loans                  7,310       9,244       0.06%    0.09%
Long Term Deposits and
Prepayments                      19,915      41,172      0.16%    0.40%


Current Assets
Stock–in–trade                   5,765,367   4,059,063   47.15%   39.05%
Stores and spares                218,375     190,646     1.79%    1.83%
Trade debts                      1,684       2,666       0.01%    0.03%
Loans and advances               48,598      65,917      0.40%    0.63%
Short term prepayments           72,483      105,728     0.59%    1.02%
Other receivables                88,147      246,675     0.72%    2.37%
Cash and bank balances           47,874      69,172      0.39%    0.67%
                                 6,242,528   4,739,867   51.06%   45.60%
                                 12,226,86   10,395,04   100.00
                                 1           1           %        100.00%
Share Capital & Reserves
Share Capital                    2,554,938   2,554,938   20.90%   24.58%
Revenue Reserves                 1,705,296   1,053,393   13.95%   10.13%


Non Current Liabilities
Retirement Benefits                          739,133     0.00%    7.11%
Deferred Taxation                1,109,847   836,939     9.08%    8.05%


Current Liabilities
Trade and other payables         5,037,469   4,324,704   41.20%   41.60%
Accrued interest / mark–up       27,659      10,354      0.23%    0.10%
Short term running finance       1,300,837   572,397     10.64%   5.51%
Income tax liability             490,815     303,183     4.01%    2.92%
                                 6,856,780   5,210,638   56.08%   50.13%

Internship Report                                                           53
                                   12,226,86   10,395,04   100.00
                                   1           1           %        100.00%


Profit and Loss Account


                                   21,666,52   18,872,49
Net turnover                       5           5           100%     100%
                                   13,442,06   11,595,73
Cost of sales                      6           6           62.04%   61.44%
Gross Profit                       8,224,459   7,276,759   37.96%   38.56%
Selling    and      distribution
expenses                           2,246,014   1,933,364   10.37%   10.24%
Administrative expenses            1,100,814   928,358     5.08%    4.92%
Other operating income             226,499     60,551      1.05%    0.32%
Other operating expenses           514,665     615,458     2.38%    3.26%
Operating profit                   4,589,465   3,860,130   21.18%   20.45%
Finance income                     102,826     59,600      0.47%    0.32%
Finance cost                       43,802      26,013      0.20%    0.14%
Profit before income tax           4,648,489   3,893,717   21.45%   20.63%
Income tax expense                 1,626,083   1,361,422   7.51%    7.21%
Profit for the year                3,022,406   2,532,295   13.95%   13.42%




Internship Report                                                             54
                                 RATIO ANALYSIS
LIQUIDITY RATIO



CURRENT RATIO


CURRENTRATIO=CURRENTASSETS/CURRENT
LIABILITIES




CURRENT RATIO             2009                    2008
                          6242528/6856780= 0.91   4739867/5210638= 0.90
(TIMES)




IN 2009, FOR THE PAYMENT OF 6856780 (C.L), COMPANY CURRENT RATIO IS 0.91 AT
6242528 CURRENT ASSETS.
IN 2008, FOR THE PAYMENT OF 5210638 (C.L), COMPANY CURRENT RATIO IS 0.90 AT
4739867 CURRENT ASSETS.




Internship Report                                                         55
QUICK RATIO


QUICK RATIO=CURRENT ASSETS-INVENTORY/CURRENT LIABILITIES


QUICK RATIO               2009                       2008
                          0.87                       0.87
(TIMES)




IN 2009,MOST LIQUIDATE ASSETS OF COMPANY IS 0.87 TIMES OF 6856780(C.L).
IN 2008,MOST LIQUIDATE ASSETS OF COMPANY IS 0.87 TIMES OF 5210638 (C.L)




Internship Report                                                         56
ACTIVITY RATIO

AVEARAGE COLLECTION PERIOD

AVEARAGE COLLECTION PERIOD=RECIEVEABLE/      SALES/360
AVRG.          COLLECTION 2009                      2008
PERIOD
                          1.46                      4.70

IN 2009,FOR THE COLLECTION OF RECIEVEABLE ,THE REQUIRED TIME IS 1.46.

IN 2008,FOR THE COLLECTION OF RECIEVEABLE ,THE REQUIRED TIME IS 4.70.




RECIEVEABLE TURNOVER

RECIEVEABLE TURNOVER=SALES/RECIEVEABLE
RECIEVEABLE TURN OVER     2009                      2008
                          245.79                    76.50




TOTAL ASSET TURNOVER

TOTAL ASSET TURNOVER=SALES/TOTAL ASSET
TOTAL ASSET TURN OVER     2009                      2008
                          1.77                      1.81




Internship Report                                                       57
PROFITIBILITY RATIO

GROSS PROFIT MARGIN

GROSS PROFIT MARGIN=GROSS PROFIT/ SALESX100
GROSS PROFIT MARGIN     2009                     2008
                        37.95%                   38.55%




IN 2009, GROSS PROFIT MARGIN IS 37.95% WHILE IN 2007,GROSS PROFIT MARGIN IS
38.55%.

GROSS PROFIT MARGIN DECREASE BY 0.06% ACCORDING TO LAST YEAR(2008).




Internship Report                                                        58
NET PROFIT MARGIN

NET PROFIT MARGIN=NET PROFIT/SALESX100
NET PROFIT MARGIN         2009                      2008
                          0.13%                     0.13%




IN 2009,NET PROFIT MARGIN IS EQUAL TO THE LAST YEAR2008.




Internship Report                                           59
RETURN ON INVESTMENT

RETURN ON INVESTMENT=NET PROFIT AFTER TAX/TOTAL ASSETS
RETURN ON INVESTMENT   2009                    2008
                       0.24%                   0.24%




Internship Report                                        60
                                           Conclusion

Pakistan Tobacco Company is part of a growing industry and the trends in the sales for the five
years studied have been positive. As said earlier the company is enjoying a major share of the
market through most of its brand being the market leader. Thus the company did not let go of
the opportunity of the trends in the market growth and started invested in new and improved
capital. The major competitors of the company are importing their finished goods stock from
their operations in other countries and are well-established companies too. PTC still enjoys the
control over the local market, but today‟s customer is more price conscious and if PTC‟s
competitors give competition through improved production facilitates and reduction in costs PTC
might not be able to transform to low cost production facilities in short span of time. Thus for the
last six years PTC has been investing in new tangible assets. To do so the company has been
taking advantage of long term loans and leasing. This has led to an increase in company‟s
financial expenses. The company also had to take short term loans to run day to day expenses
as most of its operative income is unstable and cannot be reliable for day to day expenses. The
need for short term financing also escalated due to increased financial expenses as a result of
long term borrowing. Thus short term financing also resulted in an increase in financial charges.
The company on the whole is a good venture for investing as it is showing a potential for growth
in the future. The investment into fixed assets during the previous years has lead to a growth in
sales. Thus as the firm comes out of its long term financing burden the interest expense for long
term financing will decrease. The company is also gaining reputation in South Asian markets
and with growth in production it will also be able to explore international markets. Thus the
growth in the markets catered by the company when will go international the sales revenue of
the company will grow significantly. But from an investor‟s point of view the most important thing
to be considered is that the company is part of a highly taxed industry. This taxes and duties will
always take away a major part of company‟s income. On the other hand the company is also an
attractive prospect for financing institutions. The company has taken advantage of the long term
debt to grow and the investment from the company has shown positive results. Thus the
investment and growth are synonymous for the company. Therefore this puts the company in a
good position to be able to pay back its long term obligations. As the company decides to go
international in its operations the need for further growth will be very essential. Thus financial
institutions can keep their eye of PTC for long term financing with a high assurance for timely
payback of principal and interest payments.




Internship Report                                                                                      61
                                   RECOMMENDATIONS

   1. To get the exact feedback, it should be the duty of Brand Ambassadors to fill up
       feedback forms on the spot for regular users of capstain. Feedback forms should be
       having MCQs regarding repositioned capstain.




                                    Pakistan Tobacco Company
                                      Feed Back Form
                                     --------------
                                     --------------
                                     --------------
                                     --------------
                                     --------------
                                     --------------
                                     --------------
                                     --------------


   2. Training sessions should be conducted on the topic of trade relationships on schedule
       basis.


   3. Motivational level of consumers could be increased by sending them thanking letters.
       Through this process accuracy of Brand Ambassadors can also be checked.


   4. Sales pitch of brand Ambassadors should be in a language according to particular
       locations.


   5. To avoid fake entries, honesty plays a vital role so, Brand Ambassadors honesty can be
       raised by following these points.


       Give financial benefits


       Predefined career path


       To cover up the loss that PTC is facing from illegal brands, they should train their brand
       Ambassadors on quality assurance, so that they should know about original and illegal
       brands


   6. PTC should make outlets in different areas which only sell capstain original. For this a
       person should be hired who act as a retailer and Brand Ambassador for the company.


Internship Report                                                                                   62
     7. To promote the brand, company should provide T-shirts to retailers and in response
        retailers will be motivated to sell the company brand.


     8. For attracting the consumers there should be placed beam lights which shows the brand
        image on the floors.




                                            APPENDIX

1.      Internship Letter




Internship Report                                                                               63

				
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