MARKETING MANAGEMENT

PROJECT FINAL REPORT

Submitted By:

 Sania Shahid ( 22L-6014)

 Noah Ali Hassan ( 22L-6026)
 Saleha Amjad ( 22L-6028)
 Anoosha Kamran (22L-6153)
 Maryam Nadeem (22L-6141)
 Muhammad Umer ( 22L-6015)

Section: BBA-2C

Submitted to: Sir Ammar Javed

FAST School of Management, Lahore Campus

National University of Computer and Emerging Sciences

Contents
INTRODUCTION.....................................................................................................................................3
INDUSTRY REVIEW...........................................................................................................................4
PRODUCTS/SERVICES/BRANDS BY THE ORGANIZATION.................................................6
References.................................................................................................................................................14
INTRODUCTION
 HISTORY:
As a result of technological collaboration with AEG, PEL was founded in 1956. In 1978, Saigol
Group acquired PEL, and ten years later it became public. Throughout the years, PEL has
collaborated with a number of giants from across the world, such as General Electric, Fujitsu,
and Hitachi. Also, the company was granted exclusive distribution rights for home appliances
produced by the LG Corporation in 2009.In Pakistan, PEL started offering Panasonic devices in
2020. (the free encyclopedia, 2023)

 KEY OPERATIONS:
PEL operates in various fields such as power, home appliances and electrical equipment. Some
of the key operations of PEL include.

 Power Generation: PEL provides solutions for power generating. The company offers
corporations, commercial buildings, and residential regions power generation equipment
as well as services.
 Home Appliances: PEL provides a variety of home appliances, including microwaves,
refrigerators, washing machines, and air conditioners. The company is known for its
quality goods and dependable after-sales service.
 Electrical Equipment: Transformers, switchgear, and energy meters are some examples
of the electrical equipment that PEL produces and delivers. The company's electrical
equipment is widely used in the electricity sector, industrial sites, and commercial
properties.
 Solar Solutions: PEL is active in Pakistan's growth and implementation of solar energy
solutions. The business provides both home and commercial customers with a variety of
solar panels, inverters, and batteries.
 Telecommunication: PEL offers services for the installation and maintenance of
telecommunications equipment as part of its involvement in the telecommunications
industry. (a scribd company , 2023)
INDUSTRY REVIEW
 INDUSTRY:
 PEL operates in two segments- Power and Appliances.
 PEL Crystal has 30% of the market share of refrigerators.

 COMPETITORS:
In the market for household appliances, PEL (Pak Elektron Limited) confronts fierce competition
from both national and foreign companies. PEL's principal rivals in Pakistan include in home
appliances division:

 Haier
 Dawlance
 LG
 Samsung
 Orient
 Gree

While LG and Samsung are two of the main foreign brands present in the Pakistani market,
Haier and Dawlance are said to be PEL's two greatest domestic rivals. In the home appliances
market's air conditioning division, Gree and Orient are also important rivals. These companies,
like PEL, provide a variety of goods for household appliances and are renowned for their
excellence, dependability, and innovation.

Top Competitors of PEL are in Power Division are:

 World Electric Supply
 RSR Electrics

 EVOLUTION OF INDUSTRY:
Since it began functioning in the home appliances and power sector more than 60 years ago,
PEL (Pak Elektron Ltd) has undergone several changes. This is a synopsis of how the PEL
industry has developed:
  1950s–1970s: PEL was founded in 1956 as a producer of electric motors, switchgears,
and transformers for the electrical industry. The business expanded its product line to
include fans, air coolers, and refrigerators in the 1960s and 1970s, and it started to
establish itself as a major player in Pakistan's home appliance industry.
 1980s-2000: In the 1980s, PEL increased its manufacturing capacity and introduced a
number of new goods, including as air conditioners and washing machines. The firm
developed new models with cutting-edge technologies including frost-free freezers and
energy-efficient air conditioners during the 1990s and 2000s as it continued to expand.
 2010s-present: PEL has concentrated on broadening its product line and raising the
caliber of its offerings in recent years. In addition to introducing innovative goods like
smart air conditioners and inverter refrigerators, the business has also ventured into the
solar energy market with the introduction of PEL Solar. PEL has also been extending its
distribution network to serve more customers throughout Pakistan and investing in R&D
to enhance the design and functionalities of its goods.
PEL has transformed from a producer of electrical transformers and switchgears into one of
Pakistan's top brands for electronics and home appliances, with a strong emphasis on innovation
and quality. (the essay writing experts, 2017)

 CHALLENGES TO INDUSTRY:
In the market for household appliances and power division, PEL (Pak Electron Ltd) has
several difficulties, including:

 INTENSE COMPETITON:
In the market for household appliances, PEL is up against fierce competition from
national and international companies. To sustain its market share in the face of this
competition, the business must constantly enhance its goods and services.
 ECONOMIC AND POLITICAL INSTABILITY:
Consumer confidence and purchasing power in Pakistan may be significantly impacted
by economic and political uncertainty, which may have an influence on PEL's sales and
income.
  PRICE SENSITIVITY:
In Pakistan, the market for home appliances is quite price sensitive, and buyers are
frequently motivated by affordability. PEL's goods are typically more expensive than
those of some of its rivals, which might make it difficult to draw in customers who are
concerned about costs.

 TECHNOLOGICAL DISRUPTION:
PEL may find it difficult to stay competitive and deliver cutting-edge goods and features
that satisfy changing consumer expectations due to the rapid growth of technology and
shifting consumer tastes.
 RAW MATERIAL PRICES:
The production costs and profitability of PEL may be impacted by changes in raw
material prices. To address these variations, the organization might need to change its
pricing or sourcing policies.
 SUPPLY CHAIN DISRUPTIONS:
PEL's production capacity may be impacted by supply chain interruptions, such as delays
or shortages of raw materials, which may delay the introduction of new products or the
fulfilment of client orders. (great books online, 2023)

PRODUCTS/SERVICES/BRANDS BY THE ORGANIZATION

The PEL (Pak Elektron Limited) company sells a variety of electronics and home
appliance brands. PEL provides a variety of popular goods, services, and brands,
including:
 REFRIGERATORS:
Under its flagship PEL brand, PEL provides a variety of refrigerators, including single-
door, double-door, and side-by-side versions.
 AIR CONDITIONERS:
Under the PEL and Kenwood brands, PEL manufactures a range of air conditioners,
including split, inverter, and window models.
 WASHING MACHINES:
 Under the PEL and Dawlance brands, PEL sells front- and top-loading washing
machines.

 MICROWAVE OVENS:
Microwave ovens are made by PEL under the PEL and Dawlance brands.
 SMALL APPLIANCES:
Under the PEL and Dawlance brands, PEL also sells a variety of small appliances, such
as fans, heaters, irons, and water dispensers.

 SOLAR PRODUCTS:
With the PEL Solar brand, PEL has entered the solar energy market by selling solar
panels, inverters, and batteries.
 SERVICE CENTRES:
PEL offers its products after-sales support and servicing through a network of service
facilities spread all over Pakistan.
PEL's product line, which includes a variety of electronics and home appliances that are
both high-quality and reasonably priced, is generally intended to meet the demands of
Pakistani homes.

MARKETING DEPARTMENT/FUNCTION
The typical structure of marketing department in PEL is built on functional divisions or
teams, each with distinct duties. PEL’s marketing department's typical functional areas
include:
 MARKETING RESEARCH AND ANALYSIS:
This team is in charge of gathering market data, interpreting it, and drawing conclusions
that can guide marketing plans and choices.
 BRAND MANAGEMENT:
The organization's brand, including brand message, positioning, and visual identity, is
created and managed by this team.
 ADVERTISING AND PROMOTIONS:
 This team is in charge of planning and carrying out advertising campaigns and marketing
initiatives, including sponsorships and events.

 DIGITAL MARKETING:
Digital marketing initiatives, such as social media, email marketing, and website
administration, are created and carried out by this team.

 PRODUCT MARKETING:
This team is in charge of creating and implementing marketing plans for certain items or
product lines.

 PUBLIC RELATIONS:
This group is in charge of handling media relations and crisis communications as well as
the organization's reputation and public image.

PROBLEM
The most common problem that PEL faces, not just PEL but so many other big
companies, is that the concept of "escalation" which basically refers to a persistent rise in
the price of goods, services and materials. This increase in price is not only due to
inflation but also because of different other things, for example; demand and supply,
technology advances, macro-economic factors. So, the Problem is that the price of the
product increases and now it is more than the company originally said it was, so that’s a
huge problem from many companies. (live agent, 2004-2023)

BACKGROUND TO THE PROBLEM

If we go to the background of the problem, it basically is that we for example LESCO
comes to PEL for an order of 100 transformers, Basically LESCO is the client of PEL as
PEL is the manufacturer of the transformer. Now PEL will make a budget of the 100
transformers that how much money it precisely will take to create the transformers now
 the bid will be sent to LESCO and there will be meetings for negotiation of validity date
of the bid, delivery time and cost of the event. The validity of the bid is 120 days, 90 days
or 60days it is very unusual if the date is lesser than that, after the purchase order has
been sent by LESCO the prices of the components of the transformer will be increased
making the total cost of the transformer more than they originally said and it can’t be
dodged by just making a contract with the supplier by the time you’re making the bid to
the client because the suppliers are small production companies they don’t work like that
they are not that formal with their work and they are mechanistic as they’re small,
they’re more organic that is why they never follow a set of rules. So, the problem is that
now what are we going to do when we can’t ask for more money as we have made the
bid and when till the purchase order is sent the cost to make the order is more than it was
anticipated.

TACKLING
This Problem is tackled by PEL by applying different filters while deciding the cost of
the order these filters are analyzing the historical data, high qualification of the project
manager and using PESTLE analysis.
Historical data of past 10 15 years is analyzed before making a bid of the order.
Analyzing the historical data of the similar projects did and the variations of cost that
they have dealt with can give an idea what the fluctuation of the cost of the order will be
precisely. After analyzing the projects and the data the problem of escalation can be
tackled.
There’s always high qualification required for the project manager, so project
manager is always an experienced individual who have spent decades in the industry so
his intuition is accurate and his experience helps him anticipate the variation that can
occur in the cost of order. PEL has the most experienced and top qualified project
managers which help them tackle with this problem.
PEL also uses PESTLE analysis to analyze the external environment which can
cause variation in the cost of the order. PESTLE analysis basically helps PEL have a
close look to the political situation of the country as Pakistan’s politics is very unstable
 and change of regime is common practice so it is significant to keep a very close eye on it
to avoid trouble, all the other components of the PESTLE.

Causes of Escalation:

The greater causes of escalation in prices of goods, services and products are discussed below:

1. Inflation: Multiple factors, including an increase in the money supply, rising

manufacturing costs, or modifications to governmental policy, can contribute to inflation.
Due to rising production and distribution costs, inflation can result in an overall rise in
the cost of goods and services. As a result, customers may have less purchasing power
because their money can now only buy slightly less in terms of products and services.
2. Demand and Supply: When demand for a particular good or service rises while
supply remains constant, the price of that good or service rises. When the supply of an
item or service increases while demand remains constant, the price usually falls. Changes
in customer tastes and preferences, changes in population demography, changes in the
availability of raw materials or production inputs, and changes in government laws are all
factors that might create changes in demand and supply.
3. Advanced Technology: Advances in efficiency and productivity in the
manufacturing process might result in cheaper prices for consumers. On the other hand,
technological advances that result in the creation of new products or services or
considerably improve current ones might result in higher prices because consumers are
prepared to pay more for the added value.
4. Macro-environmental Factors: External factors such as international conflicts,
natural disasters, and pandemics can all have an impact on costs. An interruption in the
supply chain caused by a natural disaster or political turmoil in a major supplier of a
specific item, for example, might cause a temporary price increase. A pandemic can also
alter consumer tastes and spending habits, causing changes in demand and supply, and
thus pricing. (oxford academics, 1999)

Ways How Marketing is affected by Escalation:

An escalation or rise in prices of goods, services and products can affect the marketing efforts of
any organization. Here are a few ways how pels marketing is affected by a rise in prices:

1. Increase in Advertising Costs: If the cost of manufacturing and distributing goods

or services rises, the organization's product prices may have to rise as well. This will
reduce demand for the products, potentially leading to fewer sales. To compensate, PEL
may need to spend more money on advertising and promotion in order to attract new
clients and keep old ones. This could boost the organization's overall marketing budget.
2. Change in Market Segmentation: Customers' purchasing power may decline
when prices rise, changing their shopping habits. Some customers might move to less
expensive products, while others might choose more expensive products with better
quality or more features. To focus on clients who are prepared to pay the increased
pricing, PEL may need to reevaluate its market segmentation approach.
3. Reposition of Products: If industry prices grow, a company may experience
increased competitive pressures as customers compare costs more attentively. To
differentiate oneself from competition, PEL needs to focus more on publicizing the
unique qualities or benefits of their product or service.
4. Competitive Advantage: Price increases may have an impact on the organization's
competitive edge. If competitors provide comparable items at lesser rates, Organization
Pel may need to differentiate its products and successfully communicate their unique
value proposition to justify the higher prices.

Overall, increase in prices requires a company to reassess its marketing strategies and tactics to
ensure continued success.

Solution:

To tackle the problem of escalation or spike in prices of goods and services just like many other
businesses Pel also applies different filters to costs of operations, inventory, resources, labor and
sales, etc. By applying filters PEL identifies where costs are increasing and take appropriate
measures to control these costs. Pel optimizes spendings and improves their profit margin
through applying filters. Analyzing cost with filters also helps make better financial plans for the
company by showing more accurate cost predictions and finding potential cost savings. There are
several ways that can be used to prevent price escalation or increase by applying various filters.
Here are a few mentioned below:

 Negotiating with suppliers is a useful strategy for reducing the cost of sales. This requires
either hunting for cheaper suppliers to replace the current ones or negotiating better terms
with them. To effectively negotiate, a business must be aware of both its own demands
and purchasing power as well as the costs and margins of its suppliers. Businesses can
use strategies including price benchmarking, competitive bidding, and volume discounts
to obtain better rates. Increased cash flow and decreased financing costs can both be
achieved with better payment terms.
 Another strategy to cut the cost of sales is to decrease waste. This calls for better
inventory control, a decrease in overproduction, and a reduction in the number of raw
materials wasted during production. Just-in-time inventory systems, lean production
methods, and improved forecasting accuracy can help businesses achieve this. Businesses
may increase productivity and cut expenses by decreasing waste.
 Enhanced supply chain management can also aid in cost savings. This entails
streamlining the movement of products and services from suppliers to clients. Businesses
may enhance logistics, reduce lead times, and engage with suppliers to improve the speed
of delivery and save costs. Businesses can, for instance, use a just-in-time inventory
system to cut inventory expenses or engage in price negotiations with suppliers to get
better deals on raw materials or shipping prices.
 Another strategy for stopping price increases is by putting cost controls in place. This
entails putting policies in place to control expenditure and make sure that costs stay
within budget. To find areas where costs can be cut, businesses should establish spending
restrictions, keep an eye on their expenditure, and routinely check financial records. This
may also entail setting up a cost accounting system to monitor expenses and spot possible
cost-cutting opportunities.
 Cost-saving technology is another option. This entails using tools or software to automate
procedures or establish more effective manufacturing techniques. Businesses might, for
instance, employ inventory management software to optimize inventory levels or move to
equipment that is more energy-efficient to cut expenses. The objective is to pinpoint
places where technology may be applied to boost productivity and cut costs.
  By enabling companies to manufacture more goods or services with the same resources,
increasing productivity can aid in cost reduction. This is figuring out how to streamline
procedures, train staff, and put new machinery or technology into use that can boost
productivity. For instance, companies might train staff to work more productively or
implement new automation technology to speed up production.

Pel also uses PESTLE to analyze help analyze potential factors that contribute to the increase in
prices and develop strategies to mitigate them. Here are some ways that pestle analysis can be
used to tackle the escalation of prices:

 Prices may be impacted directly or indirectly by government policies and laws. To keep
prices low for consumers, for instance, price controls or subsides can be utilized.
However, these regulations could have unforeseen effects like quality declines or
shortages. To reduce production costs, which might lead to cheaper pricing, governments
can also lower taxes or import tariffs.
 Both directly and indirectly, government regulations and policies may have an impact on
prices. For instance, price restrictions or subsidies might be utilized to keep costs low for
consumers. These laws may, however, have unintended consequences like deteriorating
quality or shortages. To reduce production costs, governments may also drop taxes or
import tariffs, which could lead to cheaper pricing.
 Prices can be affected by consumer choices and behavior. For instance, when consumers
become more health conscious, the demand for natural or organic goods may rise,
pushing up prices. In contrast, if customers choose less expensive solutions, costs might
go down.
 As a result of technical developments, cheaper production costs could result in lower
prices. For instance, automation can reduce labor costs while new materials or production
methods can increase productivity. Technical developments may result in higher costs for
new machinery or R&D expenditures.
 Prices may be affected by regulations and legislation. Businesses may be prohibited from
engaging in price-fixing or monopolistic practices, for example, by antitrust legislation.
Environmental regulations may also increase production costs, which can result in higher
pricing for consumers.
  Climate change and natural disasters can have a wide range of consequences on prices.
For instance, unfavorable weather patterns might disrupt supply chains and drive-up
prices and shortages. Environmental regulations may also increase costs.

Using a pestle analysis, the external factors influencing price increases can be identified, and
solutions to these factors can subsequently be established. By considering the multiple Pestle
components, businesses can gain a full understanding of the economy and develop effective
pricing strategies that balance profitability and consumer affordability.

Recommendations:

 Market Research:

By conducting a proper market research companies can identify valuable insights which
contribute to increase in prices, as well as get guidance on how to adjust pricing strategies and
product offerings to remain competitive and responsive to market demands. Businesses can
better understand consumer behavior and industry trends that are driving pricing increases by
conducting market research. By adjusting their pricing policies and product lineups to the
market's demands and maintaining competitive pricing, firms can benefit from the information
provided. Businesses can examine the competitive environment and learn how their rivals are
pricing their products with the help of market research. Businesses can use this knowledge to
modify their pricing strategy and maintain competitiveness.

 Value Based Pricing:

Value-based pricing is a pricing strategy that focuses on pricing a product or service based on the
value it offers to customers. Instead of just determining a price based on the cost of
manufacturing, value-based pricing considers the product's benefits and features, as well as the
willingness of the consumer to pay. This can include emphasizing the product's qualities and
features and charging a premium price to reflect its perceived value. Businesses must
successfully communicate the value proposition of their products or services to customers to be
successful with value-based pricing.

References
a scribd company . (2023).
great books online. (2023).

live agent. (2004-2023).

oxford academics. (1999, december).

the essay writing experts. (2017, may 14).

the free encyclopedia. (2023, march 2). Retrieved from http://wikipel.com