Marketing Strategy of Nishat Textile Mills (NTM)

Marketing means a market research process in which attitudes, needs and competitors' products are
assessed and it also continues through, promotion, customer services, advertising, packaging sales and
distribution. Here I am going to write about Nishat Textile Mills Pakistan. The company background,
products or services offering, financial reports, the market audit, market plan and corporate objectives,
gap analysis, segmentation, positioning, tactical strategy, marketing budget and evaluation and control
mechanism.

Company overview:

Nishat group of industries in one of the most important group in Pakistan with the asset of more than 300
billion rupees. This is the fifth largest group in Pakistan. This group has a strong command in four sectors
named as banking, cement and textile industries and management. The chairman of the group main
Muhammad Mansha one of the richest Pakistani and in 2007 had been awarded with the highest civil
award by Pervaiz Musharraf. Nishat Textile Mills Limited is a public company operating in Pakistan and
is listed on all three Pakistani stock exchanges. This company is engaged in textile manufacturing
including weaving bleaching, spinning, combing, stitching, dyeing, printing and buying, and selling of
textiles. The company is providing high quality products to all its customers not only within the Pakistan
but outside as well.

• Mission Statement

Mission statement of this particular company is to provide the quality products to all its valuable
customers and depending upon its high-quality products to discover new markets and to expand sales of
the company through good governance and energetic management. The basic purpose is to achieve lower
prices of quality products so that company's growth and prosperity can be enhanced.

• Vision Statement
The vision statement describes that company wants to become the leader in the specific industry by
making over itself into a processed cloth, modern and dynamic yarn and finished product manufacturing
company with latest technology, highly professionals and fully equipped to play a meaningful role on
sustain able basis in the economy of Pakistan.

Target marketing:

The market target means who and why buy your Product/Services.
The need your product means why and how the people will use your product or service.
What are your products or services have in particular.
Improvement of the product or service.
So, the Nishat Textile Mill is targeting the market of industry by geographic, demographic, psychographic
and behavioral.

Marketing Audit

The marketing audit is considered an important problem-solving tool in marketing management, is

defined as "a comprehensive, systematic, independent and periodic examination of a company's- or
business unit's - marketing environment, objectives, strategies, and activities with a view to determining
problem areas and opportunities along with recommending a plan of action to improve the company's
marketing performance (Kotler et al., 1977; Brownlie, 1993)." Market audit tells us what market strategy
is. So, it is very essential in all the companies because it corrects the wrong efforts. The marketing audit
relates to the profit, productivity and cost effectiveness the market audit consists of different function like
price, advertising, products distribution sales forces and customer services. Marketing audit is done
internally and externally and consists of some micro and macro forces as well. So, Nishat Textile Mills do
it in the same sequences.

Micro external environment:

Micro external environment enables an Organization to have a good knowledge of the forces which can
cause problems for the Organization from outside the Organization.

Porter forces model:

"Five forces model is helpful to analysis an industry's competitive environment. In all industries, the rules
and nature of competition are alive in a 􀃒ve forces framework (FFF): 1. the bargaining power of
suppliers, 2. Threat of new entrants, 3. the bargaining power of buyers, 4 the threat of substitute and 5.
The rivalry among the existing competitors" (Porter, 1985, 1990). The Porter's 5 Forces model is a very
simple but the powerful tool which helps to understand the business situation. This model enables an
Organization to understand both current competitive situation and the position which you are looking for.

• Supplier's bargaining power:

Supplier bargaining power is affecting the Nishat Textile Mills profit. Because of inflation the prices have
gone up and the raw material as well. So, this powerful bargaining hitting the profit badly of NTM.

• New entrance threat:

This is a threat which every Organization faces. Keeping them save from this threat they use a scale of
economies so that the cost can be reduced and product differentiation can be maintained.

• Buyers bargaining power:

Bargaining power of the buyer is helping to reduce the pro􀃒t ratio of the NTM because they want
discount in the products and insist for the more which is helping to minimise the margin ratio.

• Substitute's threat:
Substitute products are available in the market and creating the problems for the Nishat Textile Mills. So,
such kind of threats are available both at national and international market.

• Rivalry between existing competitors:

This is strong threat to the company's pro􀃒t ratio and market goodwill. Both nationally and internationally
the competitors are very strong and beating to each other in everything. So this is the strongest threat for
the NTM and they will have to consider it as a First priority threat for the survival. The below table shows
the porters five forces analysis.

Five forces analysis

1) Supplier bargaining power

a) Strong
2) Buyer bargaining threat
a) Weak
3) Threat of new entrance
 a) Weak
4) Substitute threat
a) Medium
5) Rivalry between existing competitors
a) Strong

Marketing Internal Audit:

Marketing internal audit consists of some factors which can be helpful to make aware of the organization
about the different aspects. The internal market audit consists of the following.

Market Segmentation:

Market segmentation is explained as "the subdivision of a market into discrete subsets of customers".
[Kotler, 1976, p. 144]. Market segmentation consists of the following points. It is helpful to have a good
idea of the need of potential customers of the company. If it is done properly and in a good way, would be
beneficial to assure the highest return for your sales or marketing Expenditures. It depends on the
following points:

1) Customer

Customers of the NTM are from around the world. The industrial giant of Pakistan emphasis the buyers
need, purchasing power, cultural customs and target the people of all age's sector vice because it is
engaged in different sectors.

• Segmentation
• Status
• profile
• Psychographic
• Social criteria (Married, single etc.)
• behavior
• position
• Loyalty
• Rate of usage the products
• Common users
• Highly trusted brands
• Depends on the product which sector of NTM it is from.

2) Product

NTM produces great brands and therefore has a good reputation in the di􀃒erent countries. It is working in
the sector of spinning, waving, and home textiles and under these units a large number of products are
prepared with different designs as well. NTM is engaged in the business of textile manufacturing and
using weaving, spinning, printing, bleaching, dyeing, combing, stitching, buying, selling, cloth, yarn and
fabrics made from raw cotton, synthetic fiber and cloth, linen and to generate, distribute and supply
electricity.

3) Competitor
The major competitors of the NTM are Chenab textile and crescent textile mills. NTM competes with its
competitors in terms of innovation, price and promotions.
The higher managers innovate the employees of NTM by listening them and have started to give them
benefits and hence get the desired results. NTM has good strategy of innovation over the competitors
Price is the very important factor and NTM trying to reduce the cost and prices will go down
automatically.
This price strategy helps NTM to become the industry leader in Pakistan.
The employees are being promoted on their performance level within a fix period while the competitor's
employee need more time to be promoted.

4) Brand
All the products of the NTM are traded under the name of nishat group of textiles in all over the
world. The NTM is very famous for its brands both nationally and internationally.

• Core Competence
NTM's core competence is price. The prices of everything have gone up rapidly due to the credit crunch
which affected all the aspects of the industry as well. The NTM has been utilizing advanced technology to
reduce the prices and to secure itself a leading position in the textile industry.

Competence and Capabilities (5Ms)

The internal market environment consists of money, men, machinery, minutes and materials. The
description is as follows.

Money

The NTM is one of the successful textile mills in Pakistan with the market capitalization of 10 billion 70
thousand Pakistani Rupees

Machinery

NTM is using the latest machinery with latest technology. "Since 1997-98 textile machinery has been
imported when a bumper cotton crop was harvested and the Textile Industry reaped massive profits due to
lower input cost. More than 9 billion (pkr rupee) have been invested in the last five years for the import of
spinning machinery. Nishat imports machinery from all the developed countries." (Jamil bhatti, 2006)

Men

It has hired the skilled labor which contributes a lot in success. The higher authority has been taken from
the all over the world.

Material

For the high-quality production high quality material is used. As the various functions are performed like
spinning, weaving, stitching, dyeing, sourcing, bleaching and printing and other as well. So high quality
of production factors are used.

Minutes
As the latest machinery is used, it helps to produce the products on time and customers are facilitating as
well.

SOWT Analysis:

The SWOT analyses are of great importance and helps in decision-making for all sorts of situations in
business and organizations. The SWOT analysis for Nishat Textile Mills limited is as follows. (Kotler
2005) "SWOT is a practice which helps to analyze the internal and external environments of an
organization through the classification and judgement of its Strengths, Weaknesses, Opportunities, and
Threats. SWOT analysis shows an image of the results of an internal and external audit which draws
attention, from a strategic point of view, to the organizations critical strengths, weaknesses, the
opportunities and threats facing the organization."

Strengths

1) ISO 9001-2000:
Nishat textile has the certification of ISO 9001-2000 which means its quality standards are its major
strengths and hence it also fulfills the requirement of international standard and has a great importance in
the industry internationally as well.

2) OKTEX 100:
Nishat also has the certification of oktex100 with itself which insures that it doesn't use any harmful
chemicals.

3) Computerized machinery:
This textile giant is using the latest technology for the production of the highly quality products which
also enhances the production capacity of employees.

4) Skilled management:
The highly skilled management from all over the country has been hired by Nishat and especially the
foreign graduate people in their management contributing a lot in the success of the NTM.

5) Financial position:
The owner of the NTM is one of the richest people in Pakistan and has the adequate financial resources
which mean the back of the NTM is very strong.

6) MIS:
NTM is fully equipped with the management information system through which the employees and
various departments are connected with each other and share the data with the top management. So, it is a
very appreciable system.

7) Power generation plant:

The electricity power is a very immense issue in Pakistan so NTM has its own power generation plants
and producing the power not for itself only but also selling it to the WAPDA.

Weaknesses

1) High Production Cost:

The resources are not being used properly and due to the economic crises, the rates are going up rapidly
and hence cost of production is increasing as well.
2) Bureaucratic Organization:
Another weakness is the bureaucratic environment within the Organization. The upper management takes
all decision ignoring the employee's suggestions.

3) International market:
NTM has week international market because of china that is very well known in the cost reduction and
creating a big problem in the industry for the NTM internationally and the market share price has gone
down as well.

4) Employee benefits and rewards:

Nishat is not providing any kind of benefits or rewards even the medical allowance and transport facilities
are not given to their employees and this put the productivity down and therefore there is the lack of
motivation in the NTM.

Opportunity

1) Product expansion:
The very important opportunity for the nishat mill is that it should expand its products in the form of
knitwear. As NTM has plants, good market position and strong financial back so it should avail this
opportunity by dealing in knitwear.

2) Low cost production:

The NTM should use the resources in a good way so that the production can be reduced to a great extent
and can maximum the pro􀃒t ration.

3) International market:
NTM should take the benefits of global recession and has a chance to increase its market share price
internationally.

Threats

1) Political instability:
This is the threat which cannot be ignored due to the current circumstances of Pakistan and the export of
the products may affect in account of this.

2): Government policies:

As the political instability is in Pakistan and every new government imposes its own rules and regulations
and especially the sudden increment in the taxes is not affordable for the NTM.

3) Buyer needs changing:

The NTM has a great threat from international market because of its satisfactory design and competitors
providing the latest ones which can put the NTM reputation down.

4) Global instability:
The global instability is still in operation for this industry. Any unusual incident can happen as 9/11 was
happened so still that kind of threats are able to disturb the company performance.

NMT Objectives:

• Short term (1 year)

 • Long term (2-3 year)
• Increase the market share price
• Expansion of business successfully
• To keep the competitors behind by reducing the costs
• Increase the sales by targeting the young's

Gap analysis:

Gap analysis shows the reduction in the market share price and the sales of the company.
http://www.artdavisgroup.com/Images/isogap.jpg This gap analysis explains that what is current situation
or market share price of the products and how to increase the share price and what kind of action we need
to take. Share price is now 43 which were 65 last year now it is challenge for the NTM to just not reach at
67 but also need to improve it by the objectives which it has chosen to improve itself stated above.

Strategies of NTM:
"Try to minimize the cost of production and the purchase of latest machinery. To improve the quality and
production is the focus area. Nishat must establish its name in new markets be creating specialized fabrics
designs by providing excellent customers service and quality as well. In some areas of the industry old
methods must remove by the latest ones. To make arrangements to increase the quota system." Jamil
bhatti (2006)

Target marketing:
The target marketing comes after the market segmentation which I have explained above and here we
select specific group of people or analyze the market of the products or services. After the identification
of segmentation, the managers make decision of taking the opportunities considering the prime target and
secondary target but the target marketing of NTM wants to hit the weaving sector which contributed a lot
in the revenues of NTM. So, this is the specific sector of NTM where it wants better results and high-
quality products are essential.

Positioning strategy:
After selecting the target market, the next stage is to decide how company wants to hit the chosen
segmentation. NTM has decided to hit the cotton industry in all over the world by reducing the cost
because china, India has the lower rates than the NTM. So, the low rates and better quality is the demand
of customer and company.

Competitive strategy:
It has two types. The brief description is as follows.

Attacking strategy:
At the moment, NTM is not in attacking position because it has problems both nationally and
internationally. Because of the high cost of production, heavy government taxes, political instability are
main factors.

Defensive strategy:
NTM's defensive strategy is to block the attack of the competitors because of the above problems it has
been adopting the defensive strategy.

Marketing mix:
Marketing mix is unified by the 4p's.
Price:
The NTM for the survival will have to reduce the prices and they are trying to do this because they have
the higher prices as compared to the competitors and this is because of high cost of production.

Product:
The managers of the NTM trying to take the decision about products quality, design, functionality and
warranty as well.

Place:
It's about the NTM transportation, order processing, warehouse and logistics as well. At a national and
international level NTM trying to reduce the expenses and this would be helpful to increase the margin
profit.

People:
Customers are everything so NTM trying to focus more on the customer based policies so that the
customer's confidence can be won.

Placement:
The product of NTM is available in every Pakistani, Indian and Bangladeshis

Tactics:
Tactics means a short time plan used immediately to increase the sales or market share. NTM tactics in
difficult time is to improve the overall system with a quick survey and information. The contact is made
with other dealers and their interest is kept in view. NTM sends articles to its clients that it has solved its
problems very easily. The rewards are given to the valuable clients to improve the sales and stake holders
are taken into confidence.

Market budget:
NTM has fixed a certain amount of money for the development of marketing mix. At NTM, the higher
management has installed complete system of information for all its places, people, product and prices
providing relevant information accurately to ensure thoroughness in decision-making and managing
company s resources. Some of the sectors contributed a lot in the profit such as weaving but this segment
in the future will go down because of the high prices and it would affect the profit, products, place and
people because the company will have to prepare for this coming threat and therefore has announced a
total package of one million Pakistani rupees for next year. The required amount for the development of
marketing mix has been included in this specific amount.