Mitchells Fruit Farms: A history of company growth

Mitchells Fruit Farms A unexampleds report of telephoner harvest-timeMitchells Fruit Farms circumscribed is the oldest and most trusted Food Company in Pakistan. Since starting time its operations in 1933, the Company has gone from strength to strength, and its wide variety of harvest-tides has inundated breakfast tables with farm-fresh consumables, dead on target from its orchards in Renala Khurd products of a senior spunky school standard, enriching the lives of millions of people with all the goodness of nature for a healthy tonestyle. straightaway Mitchells family impacts to grow, reaching more and more households worldwide with an ever-increasing array of farm-fresh products ranging from thirst-quenching Squashes Syrups takey Jams, Jellies and Marmalade rich Tomato Ketchup blue Sauces tasty Pickles reviewly nutritious trampned Fruits Vegetables and a wholesome assortment of Candies Chocolate from its wide cast of confectionery products.Francis J. Mitchell ar rived in Bombay from Scotland at the end of solid ground War I. He had been invited by his br separate who was al desexualise established in North Western India as a contractor to the government for construction of the railroad line network in this part of the subcontinent. At that time, when Francis was already an old man of over sixty eld, an prospect came his way in the form of the emerging irrigation administration being laid come on in the groove colony districts of West Punjab. He was successful in obtaining the lease of 720 acres of agricultural land in the then Montgomery district. The ara allotted to him extended for nearly seven-spot miles from Renala Khurd to Kissan, sandwiched between the arterial debase Bari Doab Canal and the Lahore/Karachi railway.He initiated the business of growing grapes for eventual sale as dried raisins and sent his young son naughtyard to Australia for training at Mildura which was well k n testify as a centre of specialisation in the business line of horticulture. TheThe follow, with Francis Mitchell as its Governing managing director and his two sons Leonard and Richard as Directors, was incorporated in 1933 and given the figure of speech Indian Mildura Fruit Farms Ltd. The North Western Railway had opened to traffic a few years before the acquisition of the land by the Mitchell family. Francis Mitchell was asked by the railway authorities to propose a make up for the adjoining station. Hence the word Kissan which subsequently became a familiar strike out piddle.The trial planting of grapes, which began in 1921 and lasted until 1924, unfortunately did not prove to be a success. The vines suffe violent serious damage from pests during the rainy season, just when the grapes infallible dry weather for ripening. The entire plantation was replaced with citrus, which, fortunately, proved to be profitable. The elder son, Leonard, was sent specially to southerly Africa to look for good rootstock, which was the foundation of Valencia orange trees these ar well established on the farms today. With the outbreak of World War II, demand for canned fruits and vegetables for the allied troops, stationed in India, began to grow rapidly. To cost-effectively cater to this growing demand, a manufacturing plant was established in Bangalore, South India. A smart joint-stock company by the get to of Kissan Products Ltd. was registe flushed.PHASE II AFTER INDEPENDENCEAs a sequel to Independence in 1947, Indian Mildura Fruit Farms extra lost nearly 75% of its Indian foodstuff. The companys name was changed to Mitchells Fruit Farms (Pvt.) Ltd. and the brand name MITCHELLS became the exclusive spot of the Pakistani company. Likewise, the Indian company acquired exclusive use of the KISSAN brand name. Francis Mitchell died in 1933 and his elder son, Leonard, became Chairman. After his brothers sad death in an air accident, Richard likewisek over the chairmanship in 1949 and continued in this ca pacity until his death in 1987. The family sold its make dos gradually, having inducted Pakistani sh arholders in 1957, and retired to Eastbourne, U.K., in 1959. Richards wife, Betty, retained her links with the Company in the capacity of Director until 1991. She died in 1995.COMPANYS INFORMATIONSALESThe national market, particularly in the major(ip) cities was saturated with the trade nutrientstuff. Although foreign fruit preserves, sauces and absorbs were visible on the shelves of the largest stores these were not as abundant as merchandise confectionery, especially several(prenominal)(a) brands of chocolate. It would appear that much of this merchandise continues to be brought into the country with unofficial channels without payment of imported duties. Despite these unhelpful conditions Mitchells were able to achieve a significant increase of over 10% in the sales of confectionery and succeeded at the comparable time in recording a marginal growth in our traditional g roceries business.CAPITAL EXPENDITUREIn the beginning they claim invested around Rs.29.76 million in putting up modern automated facility in the form of building and machinery. An independent bird thrower of supply of electric power nowadays form the WAPDA grid station together with a new standby generator were commissioned in January 2002.at a cost of Rs.14, 535,652.this should result in con military positionrable savings in power bills. Internal cash generation and bank borrowing subscribe met the capital uptake bill in full.HUMAN RESOURCEHuman Resource has also the pivotal importance for the company. steering and employee skills are constantly being updated through training courses and study tours both at home and abroad. presently Mitchells is operating with 32 executive stave members along with a big sales and labor suckRESEARCH AND DEVELOPMENTThe success of Mitchells products, and the taste that has been winning consumers hearts for generations, is the result of the C ompanys ongoing investment in and emphasis on woodland control, reinforced by research and development (R D). Both sections c nod offly coordinate with the grocery storeing and Exports Office in Lahore where product designs are initiated and passed on to the R D section for formulation. one time the RD section has prepared samples of new products, the marting Division carefull carries out product evaluation.QUALITY dominate TRAININGAlong with R D, the Quality Control section ensures that all our products live up to the consumers high expectations. From selection of the finest fruits, to touch on and packaging, quality control plays a key role in keeping a vigilant and unrelenting eye on e rattling step of the process. The Quality Control staff, with a briny up-to-date laboratory, two line-control labs for the Groceries and sweeten Confectionery divisions, and an incubation lab, ensures that on that point is no deficiency in quality standards during turnout.As the Compan y considers its employees its most important asset, instruction skills are being constantly updated by send executives on training courses and study tours, both at home and abroad.QUALITY POLICYMitchells Fruit Farms Limited, is connected to produce best quality products meeting our customers requirements at competitive prices, strengthening our position as a quality managed company. To meet this obligation, the company will continue1. Updating of employee skills by training2. Acquisition of new technology3. Re-evaluation of its quality control and quality assurance system Management.EXPORTS AND IMPORTSEXPORTSAt present, MITCHELLS products are being exported to several parts of the world, including UK, USA, and the Middle East. In future the Company is planning to make MITCHELLS a brand name familiar with households in every part of the world.IMPORTS at that place are reliable Mitchells products that are being imported. For example, we import pineapple from Singapore. Only fruit is imported, the rest of the process is done in our farms.Some of the fruit is imported in the form of pulp such as mango. We do grow mangoes in our farms but out-of-pocket to the increasing demand of mango items we have to import some of the quantity from other countries to meet the demand. cabbage is also imported.PRESENT PERFORMANCE OF MITCHELLSThe Company passed a major milestone when it went public in 1993, receiving a record subscription for its shares floated on the market. The year 1998, the 65th for Mitchells, brought another major distinction for the Company the ISO 9001 accreditation, making it the rootage food company in Pakistan to achieve the honor.Today in Pakistan, Mitchells is the only major company with fully integrated operations having its own growing and impact facilities at one location. Modern high-volume industrial equipment, original concern and a trained workforce ensure that Mitchells maintains its lead. Fully computerized and inter-linked regional s ales offices manage burgeoning nationwide sales, with those in major cities, Karachi, Lahore, Rawalpindi and Islamabad. all told the offices are on the Internet/e-mail network ensuring uninterrupted lean of data. Highly qualified executives using modern management tools from the Head Office in Lahore handle commercial, monetary and accounting functions.A smooth distribution system with nationwide coverage and consistency of quality have kept the most prestigious national institutions loyal to Mitchells growing product range. These include Pakistan International Airlines (PIA), direct five star hotels and clubs, Utility Stores mint, Canteen Stores Department, chains of main stores and established restaurants in major cities. early PROSPECTSWe believe that given the vast agricultural potential of Pakistan, there are bright prospects for the food processing industry, which can helpmeet the nutritional carrys of the growing urban population within the country as well as provide a surplus for export. The pre-requisite for such a development is a fitter and expanding economy. We are positive that our company is well placed to derive full benefit for the opportunities as they arise.MITCHELLS OBJECTIVESMitchells fair game is to provide its customer with healthy, innovative and best quality food that will tempt their appetite at all times. Above all, Mitchells also promise convenience variety at affordable prices.VISION AND committee STATEMENT1. To be a leader in the markets we serve by providing quality products and efficient operate to our consumers while learning from their feedback to set even higher standards for our products.2. To be a company that continuously enhances its master copy technological competence to provide innovative solutions and superior products as per requirement of the market place.3. To be a company that attracts and retains outstanding people by creating a culture that fosters openness and innovation, promotes individual growth, and rewards initiative and performance.4. To be a company which intermingles its people, technology, management systems, and market opportunities to achieve profitable growth while providing fair returns to its investors.5. To be a company that endeavors to set the highest standards in corporate ethics in serving society. SITUATIONAL ANALYSISMITCHELLSMitchells launched its twitches in the year 1941. Mitchells was the sole player in the field of squashes at that time. They were the first operators in rich fruit citrus. They identified the need of, make to drink product. After the proper customer need analysis logical screening and evaluation by the Mitchells research and development department a totally new product (squashes) was designed in the form of rich fresh fruit citrus .It was a break through innovation They availed the opportunity and gained the first mover gain. So they get hold of major market share , and with the passage of time they captured the market k at present ledge and rare resourcesMitchells got the competitive advantage because they had the first mover advantageFully integrated operations. Specially farm fresh fruits with having their own growing and processing facilitiesMitchells had professional management and the trained workforceMr. Richard got training from Australia Mildura at the initial stageA smooth distribution system with nationwide coverageRight products, quality and reliability.Management was committed and confidentMitchells was the pioneer in the field of squashes, they gained rushive market share and achieved the positive word of mouth regarding there products as they are do of fresh farm fruits. set MarketThe target market at the time of launch was up to 60 years of age and the core target was 15-30 years of age.SegmentationThey divisioned their product on the socio stinting classes way on- A, B+ and B.Marketing dodgeAs they had the first mover advantage they use it fully and initially promoted squashes by newspape rs, posters radio channels. But they mainly invested there resources in building there corporate realize .MAJOR COMPETITORSHEZANThe company was incorporated in 1964 as a backstage Limited Company, with the main objective to set up an industrial undertaking for manufacturing of juices, squashes, sherbets, jams, pickles and preserves from fruits and vegetables. Shezan International Limited was conceived as a joint venture by the Shahnawaz Group of Pakistan and Alliance Industrial Development Corporation of U.S.A. The agricultural background of the Pakistani sponsors induced them to establish this agro-based industry. Today Shezan is the largest food processing unit having create and installed the capacity to meet the countrys local as well as export needs.While introducing a me too product, squashes the major threat was to compete Mitchells, who already got the major market share by capturing rare resources and already gained knowledge of key factors and issues of the market. It wa s very costly for Shezan to overtake Mitchells.There was a high risk involved in competing with Mitchells fruit Farm Company. Shezan had the advantage to follow the already set product standards of Mitchells regarding research and development. Shezan had the line of movement to grab market share by offering high quality and better taste followed by product variety by analyzing the Mitchells squashes.Target MarketShezans target market is up to 60 years of age and their core target market is 15-30 years of age.SegmentationThey segmented their product on the socio economic classes centraliseing on A, B+ and B.Marketing StrategyLaunched squashes in 1968-1969. at that time they promote it by newspapers, posters radio. On radio there was a show with the name HIT BREAK the host name was HAMAD. They impart market skimming strategy by offering low prices to capture the market share.SHEZANS private-enterprise(a) STRATEGYInitially launched only three flavors of squashes which were ( mango , orange and lemon). But in current market it has 6 flavors(orange, mango, jumble fruit, lemon and lemon barley, pomegranate)Shezan was forthcoming in 735 ml. glass feeding bottle but now its open in pet bottle of 830 mlComplete backward integration in case of this company since it is the only company that has its own sugar mill as well in the name of Shahtaj Sugar Mills, Mandi-bahauddin.Shezan has the most developed distribution channels network and therefore it has an advantage of reaching maximum customers end-to-end Pakistan with the help of small retailers as well as larger retailersShezan owns 60% of shelf space in all of the almost 16,000 outlets of Utility StoresShezan is involved in advertisements and low cost promotional campaigns which makes it a very generic brand name in the mind of consumers when they are out sponsorping for squashes.Shezan is the largest food processing unit having developed and installed the capacity to meet the countrys local as well as export needs.Shezan has the highest production capacity as compared to its competitors.MITCHELLS CURRENT STRATEGYMitchells refreshing Squashes are made from the Farm bright Fruits in a hygienic environment keeping in view the health of their valued customers.Mitchells procure novel material from fresh and sun ripened fruits especially grown on their orchards in Renala, they offer a range of energizing natural fruit flavors that promise to liven up your day.Mitchells is the only major food company in Pakistan today with fully integrated operations having its own growing and processing facilities at one location.Modern high-volume industrial equipment, professional management and a trained workforce all combine to ensure that Mitchells continues its dominance as the innovator, market leader and trend setter.In 1998 Mitchells became the first food company in Pakistan to achieve ISO 9001 accreditation, thus becoming more competitive on the international stage also.Squashes has now stagnate growth and product itself is at maturity stage so Mitchells is trying to retain the market share and its loyal customers.Mitchells maintaind squashes pet bottles with the quantity 1.5 liter and 810 mlMitchells squashes are available in seven flavors (orange, mango, mix fruit, pineapple, guava, lemon and lemon barley)Mitchells diet Squashes are available in eight flavors.Mitchells squashes contain lengthened fruit content which is the major variousiation factor.In year 2001 and 2002 they run a biggest campaign for squashes. Mitchells used more than 200 hoardings displayed all over the PakistanAs squashes has stagnate growth and product itself is at maturity stage the company is focusing upon building its corporate image rather than investing solely on squashes advertisements. So they dont want to waste their money on squash ads.Last year Mitchells launched DIET squashes, for recess MARKET. POS material of advertisement has only been used to promote it.Mitchells dieting Squashes contain No Sugar and have 90% less calories than Regular SquashMitchells Diet Squashes are available in two flavors. Diet Mixed Fruit Squash, and Diet Orange SquashMitchells is using consumer and trade promotion. But mainly focusing on trade promotions. . In Lahore the retailer benefit is 12+1, it means Mitchells give one throw in the towel bottle to its retailer on the purchase of 12 bottles but on the other side in Karachi the trade promotion policy is 24 + 3 i.e. on the purchase of 24 bottles Mitchells give 3 bottles to its retailers. Thus Mitchells make the useTheir unique selling proposition is quality .They never compromise on the quality. Even if they got any complain then they immediately replace it.Mitchelles believes that success of the organization lies in the gaiety of its customers. Therefore Mitchells has always given first priority to its customers feed back and this they do by the pursuance waysThorough questionnaire feed back formsThorough shop keepersThrough IS O procedures (CPA, Corrective and Preventive Actions)The feedbacks and opinions of the customers are very useful for them and besidesthis they study the feedback and try to carry out that accordingly.MARKET ANALYSISThe market for Squashes in Pakistan is mainly influenced by branded competitors in this specific product category. These competitors have firm distribution channels..As a majority of the countrys population is in lower-lower to lower-middle class, this is the reason that people are more price conscious and secondly the also look for the convenience of products due to this reason there is a demand metamorphose observed in the squash industry. The demand of Squashes is now especial(a) only for few months in major areas of country. The Business of Squashes in Lahore is at its peak between May and November So Mitchells play a different strategy as far as region Lahore is concerned but on the other side business in Karachi remains stale and on the same level of graph thoro ugh out the whole year thus Mitchells imply different strategy in terms of Karachi. The reason of this limited demand according to the market analysis is because that you cannot relate squshes with different occasions for example the way red syrup Jam-i-Sheerin and Rooh Afzah are relating themselves to Ramadan and Muharam, another big reason of the limited demand of the Squashes is because of its rule which is limited upto a thirst quenching drink but red syrup can be utilized in many ways apart from drinking such as toping, used in milk etcTarget marketThe targeting decision determines which customer group the organization will serve. Selecting good market targets is one of the management most demanded challenges.Mitchells basically design the strategy to target the Social economic class of A B+ grade. But then by the time every class exits part of their market. There primary focus was A B+ rank but now they target overall market and go for mass market. The reason is from the a ge group of (3-80) years old people use it as a refreshing and energetic drink.Target approach is being used by the Mitchells in case of Squashes product variety. present the segments are not clearly defined but extensive target.Target MarketDemographics up to 80 years as target market while core target market includes ages between 15 30. Age 10 and aboveFamily life cycle Young, Children, Old people.Psychographics Middle, Middle Upper, Lower, Lower Upper, Upper class.Benefits Quality, Rich in taste.SegmentationThe concept of one-size-fit-all mass market is no longer relevant. Companies have to define that which segment they are about to target. Few years back, squashes segmentation was on the basis of behioral, life style and usage rate was high but now the potential is not in the market. Even consumption chemical formula has been decreased due to the entrance of other substitute products.Market needsTalking about the need of market there is a need of those products which are com paratively cheap as well as give ease to consumer. In todays world everyone is in hurry and customer want quick drink and quick food just to salve their time. Considering Mitchells squashes need was there few years back when pulverized drink and juices and energy drinks were not introduced to the market. So mitchells took the first mover advantage to introduce it though they conducted a research to create a need and capture a major market share at that time.1. Quality craftsmanshipMitchells never compromise on its quality of fruit. Their squashes have extensive fruit content. There quality remains consistent all the time.2. innovationsAs Mitchells company felt that customer are now very health continuous so they introduce DIET SQUASHES last year with the catchword lose weight not taste. But they have introduced it for the niche segments only. They even didnt use promotion activities for these innovations.3. customer serveAs each and every company are trying to have good relations hip with the customer. So in this regard if they got any complains related to their products they replace it without wasting the time of customer.CUSTOMER SATISFACTION standardThe success of the organization lies in the satisfaction of its customers. Therefore Mitchells has always given first priority to its customers feed back and this they do by the following waysThorough questionnaire feed back formsThorough shop keepersThrough ISO procedures (CPA, Corrective and Preventive Actions)The feedbacks and opinions of the customers are very useful for them and besides this they study the feedback and try to implement that accordingly.Market trendsTrends are changing rapidly, so nobody knows the customer who will buy our product today will buy it tomorrow as well as or not. At this time quashes are in MATURITY stage. The reason is because it takes relatively more time in getting ready instead of other new drinks. So there is still not any hope to create a new market in this industry. T he only strategy Mitchells is using just to retain their existing customer and not looking for new customers. Its basically depend that customer is loyal to the product or not. The customers who are heavy users of squashes might not be shift to other substitute because they are loyal to it.Market growthNow there is no more growth in squashes industry due to consumer preferences and other factor is customer are very price conscious now. They want to have instant drinks to save their time but at cheap rates. So market has been shifted due to other drinks like pulverise drink, instant drink, juices and red syrup. So now squashes are lying in CASHCOW because it gives money but not further growth. As Mitchells is the pioneer and still leader in the market so contain major share of market so far.BCG MATRIXSWOT analysis of MitchellsStrengthsFully integrated operationsHaving its own growing and processing facilitiesModern high-volume industrial equipmentProfessional management and a traine d workforceA smooth distribution system with nationwide coverageRight products, quality and reliability.Management is committed and confident weaknessesCustomer lists not testedSome gaps in range for certain sectorsCustomer service staff needs trainingMore budget needed for Human Resource DevelopmentOpportunitiesMitchells can continue its dominance as the innovatorCan maintain its position as market leaderCan also continue to be a trend setterInternational and domestic market enlargementIntroducing new verities of food productsLocal competitors have poor productsEnd-users respond to new ideasCan surprise competitorsThreats semipolitical instabilityInternational Financial crisesChallenge of work force diversityChanging technology and conceptLegislation could impactRetention of key staff criticalPossible negative publicityMarket demand very seasonalSWOT analysis of squashesStrength power of quality which remain consistent.Weakness price and cost of ingredients used in squashes.Opport unity can define more segments like introduce squashes in small bottles so reach customer buying power.Threat all the substitute drinks. regard of squashesCompetition analysisThe competition is very fierce among the competitors so Mitchells always get the first mover advantage and still the leader of market. It has major share in the market.Direct competitors Shezan squashesIndirect competitor red syrup, instant drinksMarket sharesMitchells 40%Shezan 38%Kinza 11%Others 11% spatial relation strategyWe provide high price, high quality premium product. Our market share in only Lahore is 30% for squashes. More than 50% of the area of the shelves in the stores is covered from Mitchells squashes.PositionWe focus on positioning because it is important for developing the image that our product projects in relation to our competitors products (shezan). aligning in relation to a competitorWe place our products directly against the competitors products. this strategy is suitable for us because we have a solid differential advantage against our competitorPositioning in relation to a product class or attributeWe sell our product with the sloganWe provide farm fresh quality drinkAnd consider it to be our competitive edge against our competitors and for the same reason we focus on this attribute claiming that since we have our own farms we provide you with the squashes made of fresh fruit.Positioning by price and qualityWe consider our squashes to be a premium product. That is high quality, high price. All our customers buy them due to brand loyalty. They know that they are getting something that is worth what they are paying.Marketing mixProduct StrategyIt is a consumer product. Initially it was a convenience product but due to the colossal demand shift observed in the market the customers are more eager to buy ready to drink products.Sugar ConfectionaryNEW LAUNCHESMitchells Diet SquashesMitchells refreshing Diet Squashes are made from the Farm Fresh Fruits in a hygienic e nvironment keeping in view the health of our valued customers. Our Diet Squashes contain No Sugar and have 90% less calories than Regular Squash.Mitchells Diet Squashes are available in two flavours.Diet Mixed Fruit Squash, andDiet Orange SquashProduct life cyclePricing StrategyMitchells pricing goal is to increase sales volume and maintain or increase the market share. In order to seek higher sales volume we often apply discounting techniques or other aggressive pricing strategies.Mitchells had charged premium price due to there brand image in the market for a long time. But, due to shift in demand it has become almost to its competitors.They cannot afford to fall below certain level of prices as they have to maintain certain profit level. At this point they are facing tough competition because one glass of squash costs 7.5 Rs on the other hand the price of powdered drink is 5 Rs per glass.Cost of 810 ml of bottle of Squash for retailer (including tax) = 71 bottleCost of 810 ml of bottle of squash for consumer (including tax) = 82 bottleProfit margin = 11 bottle.Cost of 1.5 liter of bottle of squash for retailer (including tax) = 227.5 bottleCost of 1.5 liter of bottle of squash for consumer(including tax) = 244 bottleProfit margin = 16.5 bottleDistribution StrategyMitchells adopted the channel-Structure Strategy for distribution. They believe that product should be distributed directly from manufacturer to customer or indirectly through one or more intermediaries. They sell their products sometimes directly and sometimes they sell their products through retailers. Like in Lahore they need to sell thei