Market Size of Pakistan

CCP INITIATES ACTION TO CURB DECEPTIVE MARKETING PRACTICES BY FOOD

FIRM
The Competition Commission of Pakistan (CCP) has concluded an enquiry and issued a show
cause notice to Shangrila (Pvt.) Limited for indulging into alleged deceptive marketing practices
by making a claim of being 'No. 1 tomato ketchup in Pakistan'.
CCP received a complaint from National Foods Limited alleging that Shangrila has recently
launched a marketing campaign through print and outdoor advertising media all across Pakistan
for Shangrila Ketchup and claimed that their ketchup is No 1 in Pakistan.
It was also alleged in the complaint that the claim of Shangrila is prominently displayed on all of
its advertisements and lacks a reasonable basis, related to character, suitability for use, or quality
of goods in violation of Section 10 of the Competition Act, and the Marketing campaign is
capable of harming the business interest of National Foods.
CCP's Office of Fair Trade (OFT) has initiated an enquiry against the claim made by Shangrila
and concluded that the overall net impression of the marketing campaign/advertisement is that
Shangrilla is Pakistans No. 1 Tomato Ketchup, whereas the actual market share of National
Foods was higher than Shangrila. National foods holds a major share in the Total Urban Pakistan
in the category of Ketchup. It has a market volume share of 49.2 and value share of 50.8 whereas
Shangrila ketchup has the market volume share of 20.7 and value share of 20.1 at the time of
marketing campaign.
It was also noted that Shangrila has made Brand of the Year Award the basis to authenticate its
claim of being No.1 in Pakistan. However, upon enquiry, Brands Foundation has clarified that
their award never empower the receiver to make a claim of being No.1 in Pakistan.
The CCP enquiry concluded that the claim of Shangrilla not only lacks a reasonable basis
regarding character, suitability for use, or quality of goods but is also capable of harming the
business interest of National Foods in violation of Section 10 of the Competition Act. Therefore
a show cause notice was issued to ShangriIa for making a deceptive claim during their
advertising and they were called upon for hearing on a given date.
CCP is mandated under the Competition Act to ensure free competition in all spheres of
commercial and economic activity to enhance economic efficiency and to protect consumers
from anti competitive behavior including deceptive marketing practices. A number of actions
have been taken by CCP to stop deceptive marketing practices.

Ketchup Brands in Pakistan:

National Tomato ketchup
Knorr tomato ketchup

Shangrila tomaro ketchup

Kissan tomato ketchup
Fine food tomato ketchup
Mitchells tomato ketchup
Bake parlor tomato ketchup
Shezan tomato ketchup

Market share:
The ketchup category has seen advertising activity recently and there are lots of tomatoes to be
found whether you switch on the TV or look at a billboard.
The story of tomato ketchup in Pakistan began with Mitchells a food brand that dates back to
the 30s. The category has changed significantly since and more brands have entered the market.
Today, the category is populated by names such as Bake Parlor, Knorr, Mitchells, National
Foods, Shangrila, Shezan, and international brands like Heinz.
According to Adnan Malik, Head of Marketing, National Foods, the tomato ketchup category is
worth three billion rupees (Source: A C Nielsen) and his brand accounts for 51% of the share. He
says that there is a 70% penetration of this category in consumer segments A1, A2, B and C. In
sharp contrast, the penetration levels go down to 30-40% in B, C and E.
Since the 90s the strategies for ketchup brands have evolved. Inflation and the economic
downturn have seen cuts in consumer spending and brands have turned to offering their
customers convenience and economy.
To this end, Shangrila (established in the late 80s) introduced a 100g sachet in the late 90s and
became the first company to launch pouch packaging, a development that raised the bar among
competitors and also brought the price down, helping develop a market for ketchup among a
wider public.
National Foods quickly followed suit and today claims to be the leader in this format. Pouches
account for 60% of the companys sales and even consumers who are not price sensitive and
previously preferred bottles, have accepted pouches due to their convenience.

At Mitchells, although concentration on pouches has recently increased, glass bottles still
account for a 40-50% share of their sales.
Pouches come iin three sizes: 800g, 400g and 250g, and glass bottles in two: 500g and 280g. For
all the brands the large (800g) pouch is priced at about Rs 150 whereas the large (500g) bottle is
about 10-15 rupees cheaper. However, there is a smaller quantity of ketchup in the bottle,
therefore by paying a little extra, consumers get more ketchup, making the pouch more
economical.
Most ketchup brands are concentrating on younger consumers, because, says Malik, We are a a
young nation and the trend of having snacks with ketchup is growing.
However, a major challenge is to ensure that the brand appeals to everyne, including housewives
and other influencers.
In terms of advertising strategy, National Foods, Shangrila and Mitchells all seem to be focusing
focusing on the main ingredient tomatoes.
National Foods originally positioned (before 2008) their proposition around fun. However, in
2008, the package design was changed to emphasise the fact that the product was made from
100% pure tomatoes, with the focus of the communication turning towards flavour and purity of
the ingredients. The companys recent ad campaign is also based on The real tomato
experience.
According to ad agency IAL Saatchi and Saatchi (National Foods creative agency), the new
campaign capitalises on benefits such as purity, quality, convenience and economy through
tempting shots of food and tomatoes. The campaign was leveraged to television, retail level
(POS) and gondola/displays at shops.
Shangrila leverages print and outdoor and does not advertise on TV or radio as the company
believes it is against shariah to do so, which is why, according to Erfan Mirza, Brand Manager,
Shangrila, the brand has a low share of voice compared to its competitors. Yest, he says that
Shangrila is still considered Pakistans number one tomato ketchup.
Compared to National Foods and Shangrila, Mitchells ad spend was relatively low until about
three years ago, because of a focus on infrastructure development. However, advertising activity
has picked up since. Zakria Fawad, Account Manager, Lowe & Rauf (Mitchells creative

agency), says the current ad campaign for Mitchells tomato ketchup (Bin khaye raha na jaye
originally released in 2010) stresses the fact that the product is made from the highest quantity of
tomato pulp.
Fawad adds that strategically, we decided to target the younger age group as they are the
primary users/influencers but we also incorporated the primary buyer, the mother.
In addition to the TVC, Mitchells is exploring non-traditional marketing avenues. It currently
sponsors a food magazine called Chef Special and Chef Zakirs annual cookbook. The brand has
also opted for content integration on Dawat on Masala TV.
Faiza Iqtadar, Media Planner at Maxus Global (Mitchells media agency) says, The brands
media strategy is to increase awareness, create recall and promote its discounted offer.
Overall, things look good for the ketchup brands. All the major players have become more
aggressive on the marketing front and the size of the market is growing simultaneously.
These brands are also looking to explore more consumer segments. Hamid Mukhtar, Assistant
Brand Manager, Mitchells Grocery Products, for example, says that Mitchells has recently
changed their penetration strategy from A+ and A consumers to target people in the B and B+
range.
However, as more ketchup brands are providing more options to snack lovers, the big brands
may need to think of new ways to differentiate their product apart from the claim of being
natural. They will also have to come up with more innovative media mixes to remain relevant
and appeal to various consumer segments.

Current Marketing and advertising Activities of different brands

National Foods has been a leading spice manufacturing company since 1970 and has witnessed
unprecedented growth since then. The company brought a revolution in the spice category as
prior to the launch of National Foods in the 70s, spices which were available in the market,
unbranded and unknown companies sold them without proper packing. National Foods has
changed the production, packaging, and the branding business of spices in Pakistan.

At present, National Foods Limited and its spices are a global brand recognized in over 30
countries. During the last four decades, National Foods has transformed from a being a spice
producing business to a multi-category food company. With 12 product categories such as jams,
spices, desserts, recipe measles and ketchup, National Foods produces over 250 products that are
up to the international standards of quality.
During the first quarter of 2013, National Foods performed exceptionally well. Moreover, its
high quality standards in the convenience food segment resulted in the expansion of its customer
base. National Foods product categories have given a beyond par performance during the
quarter includes pickles, desserts, recipe mix, and sauces. In addition, the companies marketing
efforts increased its sales by 17 percent whereas their brand strategy helped the company to
accentuate its brand image and awareness in local and international markets.
Furthermore, National Foods is continuously monitoring its advertising, marketing, and
promotional activities. In-store displays, television commercials, outdoor activities and the
Hamaray Khanay, Hamaray Tehwar campaign to create a bond between the company and its
customers.
In addition, National Foods traveling cooking show, National Ka Pakistan helped the
company gain access to untapped markets in Pakistan and the televise shows unique feature of
highlighting Pakistani cuisine did support the companys brand building process.

Distribution Channels

Who is the Target Market?

In terms of geographic location, of course, every household in Pakiatan is target market since
ketchup is consumed by 93% of the population. Moreover, the global tomato ketchup
consumption is also growing at a rapid pace due to changing food habits of the people in

developing nations. The global market is, however, highly fragmented with a high share taken up
by the local generic companies. The company also aims at those people who are interested in a
better taste of ketchup, conscious of their health, and looking for affordable prices.

Demographics
Age: All age
Gender: both males and females
Income: since our products are set to an affordable price, the income of our customers can be
anything from average and above.
Geographic location: Karachi, Lahore, Faisalabad, Multan, Pishawar and Islamabad.

The 4 Ps
Product/Service
The company will provide healthier and higher quality of ketchup by substituting unhealthy and
artificial ingredients with healthy and natural ingredients while making it taste better. The
company can also change recipes little different depending on each countrys local needs and
tastes since ketchup is used on a variety of foods from pasta (Holland and Venezuela) to cabbage
rolls (Japan) and meatballs and fishballs (Sweden). E.g. curry flavoured ketchups in India,
chipotle flavoured ketchups in Mexico.

Place
This refers to how an organization will distribute the product or service they are offering to the
end user. The organization must distribute the product to the user at the right place at the right
time.To distribute the product to the user at the right place at the right time, an intensive
distribution strategy seems to be most suitable for Hunt's ketchup. Intensive distribution is a
distribution strategy that places product wares at many retailers or retailers and distributors in
various places. This technique is suitable for products or goods of daily necessity that has
demand and high levels of consumption.

Price

Hunts ketchup utilizes a mix of Geographical Pricing and Penetration Pricing. Geographical
Pricing is evident because there are variations in the price of the companys goods in different
parts of the world. Since the primary objective of Hunts ketchup is to gain the global market
share by penetrating the local market in developing countries, the price will be set lower
depending on the countries state of the economy. Moreover, for North America and Europe
where Heinz ketchup is dominating the market, the approach of penetration pricing is used in
order to attract customers and gain market share. The price will be raised later once this market
share is gained (marketingteacher.com).

Promotion
Hunts ketchup is an exclusive food sponsor for Six Flags, Inc., which put Hunts ketchup front
and centre on every theme-park fast food platter to enhance brand loyalty and reach out to
consumers beyond traditional media. The Hunts brand also offers "taste guarantee certificates"
to consumers: anyone not satisfied with the brands new, thicker ketchup can opt for a full cash
refund or swap the certificates for a US$ 20 discount on other ConAgra product purchases
(Gidman).

Life Cycle of ketchup

Tomato production (open field vs greenhouse)
Transport of tomatoes to tomato paste factory
Production of tomato paste
Transport of tomato paste to ketchup factory (ship, truck or plane)
Production of ketchup and ingredients Life Cycle of ketchup
Ketchup packing
Transport of ketchup to wholesalers
Transport of ketchup to retailers
Ketchup in retail store
Transport of ketchup to household
Ketchup in fridge in household

Import duty & taxes and restrictions for Tomato ketchup

The global average import duty rate for Tomato ketchup is 14%, with a minimum of 0% and a
maximum of 50%, when classified as Food & Drinks Sauces, Pastes &
Dressings Sauce | tomato sauce < 1.4 kg, with WTO tariff sub-heading 2103.20

Packaging
Ketchup is one of the very few food items that one can eat with almost every meal. Whether its
the meat or when you are having fast food, ketchup gives you that extra flavor that you want.
There are many types of material in which packaging of ketchup are done. There are glass
bottles, plastic bottles, squeeze, dips etc. Mostly the colors that are used in the packaging design
are white and red. Tomato visuals are used and if not the product inside the packaging is quite
visible.

Legal Requirements
On Spot Testing Through Rapid Testing Kits The field teams are trained to check the quality of
food items through on the spot kits. These kits are used to detect various adulterants in tomato
ketchup and also rancidity in cooking oil and ghee. Instead of archaic practice of drawing
samples across the board, the field teams draw samples of only those food products and send
them to the laboratory, which fail to pass the rapid testing tests.

Market Size of Pakistan

Ketchup Brands in Pakistan:
Market share:
Current Marketing and advertising Activities of different brands
Distribution Channels
Who is the Target Market?
Demographics

The 4 Ps
Life Cycle of ketchup
Import duty & taxes and restrictions for Tomato ketchup
Legal Requirements