Shan Foods

in Australia
global marketing

Executive summary

Shan Foods, the well reputed food company which is currently

exporting its products to more than 60 countries and 5 continents
is going to launch its products in entirely new market of Australia.
Shan Foods have diverse range of food items mainly mix spices,
ready to cook food, salts and desserts. Australia has good number
of population of people with Asian origin who like to consume
spices and other foods offered by Shan Foods, that Include IndianAustralians, Pakistani-Australians and others, based on these
primary target market Shan Food will also target Australian
population by offering local spices and food products according to
taste and preference of Australian people. Shan Foods has kept
focus on global localization that is also called as Glocal
marketing strategy that emphasize on thinking global and acting
local. Shan Foods will standardize its core elements but will
localize some marketing mix elements. Shan Foods can surely
achieve great success as it has evolved from a single country to
more than 60 countries and with certain other strategies company
can achieve same type of success in Australian market by
delivering superior value to its customers and performing its
operation in the light of corporate social responsibility (CSR).

Company profile
Shan Foods journey of remarkable success started from 1981 when a
visionary entrepreneur Sikandar Sultan started this company from a single
cottage and within two decades Shan Foods become one of the leading
spices brand in the world market. Currently Shan foods has presence in more
than 60 countries having manufacturing facilities in Pakistan, UAE, Saudi
Arabia and United Kingdom the company now also harbors offices in SharjahUAE, Makka- KSA and Manchester- United Kingdom.
MAIN BUSINESS

Manufacturing and Marketing of Food Brands

EMPLOYEES

Management Staff: around 360 & NonManagement Staff: around 281

LABOUR

Approximately 1000

DISTRIBUTION
NETWORK

374 distributors within Pakistan 60 distributors

across 45 countries

HEAD OFFICE

HEAD OFFICE Plot 29, Sector 23, Korangi

Industrial Area, Karachi, Pakistan.

Vision, Mission and Core values

Vision
A global food brand offering premium quality innovative
products, which delight our consumers.

Mission
Shan, a responsible corporate citizen, adhering to its core
values, trusted globally for providing great tasting
consistent quality food products.
We are determined to reach every kitchen by diversifying
into growing food categories through innovative, healthy
& safe products for the ultimate delight of our
consumers.
We will enhance shareholders value through sustainable
growth, develop strategic relationship with our business
partners and ensure safe work environment for our
employees.

Core Values
IMPECCABLE INTEGRITY:
Honest, fair and ethical with all stakeholders.
CARING FOR COMMUNITY:
We care and actively contribute to the community in
which we operate.
WORKING WITH PASSION:
We believe in truth, trust and team work. Promote a
creative environment, where people have the opportunity
to grow, dare to take risks and work with passion.
COMMITMENT AND THE DRIVE TO GO EXTRA MILE:
Honoring our commitment. We set new benchmarks for
the industry by going the extra mile and delivering
superior value to our consumers and stakeholders.
DELIGHTING CONSUMERS:
We delight our consumers by offering innovative and
exciting food solutions by reaching out to them wherever
they are, to meet their current and emerging needs.
CELEBRATING SUCCESS:
Actively seeking opportunities to reward & recognize our
winning teams and celebrate our success.

SHARIAH COMPLIANCE:
We strictly comply with all Shariah laws and remain
conscious of it in every sphere of business

Marketing orientation
Shan Foods uses polycentric orientation as it gives importance to countrys
domestic market, as they believe that each market is unique and need to be
addressed in individual way The plans are devised to operate through
individually established businesses, either by wholly owned subsidiaries or
through marketing subsidiaries, separately in each country, allowing
complete

autonomy to units

to operate as separate profit centres

independent of head office When following this approach a company should

produce high quality products or its production costs should be very low. It
can also concentrate its attention on foreign markets which have similar
consumer needs and conditions similar to domestic market. Among
disadvantages of this orientation is low possibility of the economies of scale,
high prices of products due to high investments in the research of foreign
markets and adaptation of products to the needs and wants of particular
countries.

Australian Market Scope and Challenges

Running business in Australia is not going to be an easy task of Shan Foods
there will be lot of challenges. First challenge would be to acquire targeted
customers; Shan Foods has focused on middle class customers who cannot
afford to eat at restaurants while most of Australians fall in upper middle

class category with GDP/capita of over 38 thousand USD. Capturing

customers and making profitable relation with those customers will take
efforts and creative thinking by strategists. Keeping in mind these
challenges, Shan foods will design its strategies to exploit opportunities and
face challenges.
Australian market is one of the potential markets for Shan Foods because it
has segment of Asian people from different countries such as Pakistan, India,
China, Bangladesh, Sri-Lanka, Thailand and others who use to consume the
products that Shan Foods offers. With wide variety of products Shan Foods
will also target native Australian people who fall in middle class category who
cannot afford to go at restaurant and people who are curios for using Asian
spices. Shan Food will also boost promotion of its products that are used
worldwide such as garlic paste, chili paste, rice, and various spices Nearly
one quarter of Australians will be older than 65 by 2050, which will increase
the need for the country to bring in more skilled migrants to boost the
working population. This will put pressure on the domestic food industry to
provide for a wide range of multi-cultural food demands Shan Foods can use
this as an opportunity and provide diverse range of food to different people
of australlia With heightened health awareness in Australia, demand for
white meat, seafood, fruit and vegetables rising. Consumption is also
increasing of low fat cheeses, cholesterol-reducing spreads and nutrient rich products.
Food exporters should be creating quality portion sizes which still have some room for
indulgence so these all are the area in which Shan Foods can offer products to satisfy needs of
native Australian people

Economic Environment of Australia

Over the 20-year history of the Index, Australia has advanced its economic freedom score by 7.9
points, one of the 10 biggest improvements among developed economies. Substantial score
increases in six of the 10 economic freedoms, including business freedom, investment freedom,

and freedom from corruption, have enabled Australia to achieve and sustain its economically
free status in the Index. With an economy that benefits from sound fundamentals including
monetary stability, low public debt, and a vibrant employment market, Australia has weathered
the global economic uncertainty well. Openness to global trade and investment is firmly
institutionalized, supported by a relatively efficient entrepreneurial framework and a wellfunctioning independent judiciary. Australia has a strong tradition of reliable property rights
protection, and the legal system is transparent and evenly applied. Effective anti-corruption
measures are in force.
Australias top individual tax rate is 45 percent, and the top corporate tax
rate is 30 percent. Other taxes include a value-added-tax (VAT) and a capital
gains tax. The carbon tax has been abandoned for a cap-and-trade system.
The overall tax burden has fallen to 25.6 percent of GDP. Government
spending amounts to 35.3 percent of total domestic output, and public debt
remains at 27.6 percent of GDP Australia has a 1.8 percent average tariff
rate. The government has reduced tariff and non-tariff barriers both
unilaterally and through negotiated trade agreements. Foreign investment in
a few sensitive sectors is limited. The open financial sector is highly
competitive and well-developed. All banks are privately owned, and prudent
regulations have allowed them to withstand the global financial turmoil with
little disruption

Trade relations between Pakistan and Australia

Australia and Pakistan enjoy long-standing friendly and growing relations
underpinned by people-to-people links. Australia established diplomatic
relations with Pakistan after its 1947 partition from India and has had a
resident mission in the country since 1948. Australia is committed to
supporting Pakistan as a partner in its efforts to confront security threats,
build economic prosperity and enhance development. Australia-Pakistan total

two-way trade in 2012 was $879 million, compared with $703 million in 2010
and $600 million in 2008. Currently, Australian exports to Pakistan consist
primarily of food products, coal and cotton. Australia's major imports from
Pakistan are textiles and rice. An Australia-Pakistan bilateral trade agreement
has been in force since 12 July 1990. The agreement commits both parties to
"facilitate, strengthen and diversify" trade. The Australia and Pakistan Joint
Trade Committee, which met most recently in Pakistan in June 2013, is the
primary forum for discussion of bilateral trade and investment cooperation
issues.

Trade Barriers In Australia

Trade Policy
Having shielded its industry for most of the past decades behind tariff
protection, Australia began to reduce its tariff including in its most protected
industries such as automobiles and textiles in the 1980s. The Australian
economy has since reaped the rewards of tariff reduction through lower
prices of imported business inputs, increased productivity and improved
international competitiveness.
Import Controls
There are no special requirements for applying an import license, nor are
there any quotas on imports. However, under the Customs (prohibited

Imports) Regulations, controls take the form of a) an absolute prohibition

meaning that import of these goods is banned in any circumstances; and b) a
restriction where imports are allowed only if written authorization is obtained
from the relevant authorities, or if compliance with certain regulations is met.
For some commodities, import permits are required to facilitate clearance of
goods.
Items subject to control include animals and animal products; narcotics,
psychotropic

and

therapeutic

drugs;

certain

chemicals

and

primary

commodities; firearms and certain weapons; motor vehicles; and certain

dangerous goods. Controls on these goods are maintained to meet health
and safety requirements or labeling, packaging or technical specification
requirements.
GST and Other Taxes
Goods and services tax (GST) was introduced in 2000 and is payable on most
goods and services imported into Australia except for some essential
commodities. GST is levied at 10% of the value of a taxable importation
which is the sum of the customs value of the goods, any customs duty
payable, delivery costs and other expenses.

Macro Environmental Forces in Australia

Political and Legal System

Australians follows the Common law legal system derived from English
law. This is relatively challenging for Shan Foods since it is Pakistani company
and are not used to this law system. Political Parties There are two political
groups that have a serious chance of forming government in Australia and
both believe in social democracy. Governments might change or new political

parties might be elected, but the concern of the multinational corporation is

the continuity of the set of rules or codes of behavior and the continuation of
the rule of law regardless of which government is in power Australian
Retailers Association (ARA)The ARA has been encouraging, promoting and
protecting retailers by providing education, support and mentoring for the
past 100 years. The Federal, State and Local Governments regularly seek the
opinions and views of the ARA when they undertake new projects, act to
change existing law or implement new legislations.

Economic System
The case study states that there may be a number of economic factors which
would influence consumer confidence and consumer spending over the next
few years. These factors include, Low national rate of saving, low household
rate of saving, high oil prices and it continues to rise, declining of GDP from
2003 onwards high levels of household debt. These are likely to have a
negative impact on consumer spending patterns.
However, there are few positive economical factors which would beneficial
for businesses and have a positive influence on customer spending patterns.
There is a continuous decrease in the unemployment percentage during the
past 10 years, declining of the inflation rate during the past 2 years.

Socio-Cultural Environment
The population is continuing to grow within Australia and currently it is
around 20 million. As per the projections of the Australian Bureau of
Statistics by 2031 it is expected to grow up to around 25million. The number
of people living alone is projected to increase from 1.8million in 2001 to
between 2.8million and 3.7million in 2026 due to ageing population, delayed
marriage and increases in divorce and separation. (Australian Bureau of

Statistics, 2005) This would create a demand for more household items such
as furniture, kitchenware, Food Items (Spices and Ready to Cook Food) etc.
English is the primary language. Yet their colorful vocabulary, accent,
phonetics system and slang can take some time to get used to. Australia is a
multicultural society. After World War II there was heavy migration from
Europe, especially from Greece, Italy, Germany, the Netherlands, Yugoslavia,
Lebanon, and Turkey. Currently there is a heavy migration from the South
Asian and South East Asian Countries as well which is the Major opportunity
for Shan Foods as its major portion of target market is Asian and other
foreigners in Australia.
Australians are very down to earth and value authenticity, sincerity and
relationships.

Ecological System
Australia is the driest inhabited continent on earth, with the least amount of
water in rivers, the lowest run-off and the smallest area of permanent
wetlands of all the continents. Australian soils are highly dependent upon
vegetation cover to generate nutrients and for stability. Australia is one of
the most urbanized and coast-dwelling populations in the world. More than
80 per cent of Australians live within 100 kilometers of the coast. Human
activity continues to exert pressure on marine environments. Pollution is the
most serious problem and the vast majority of marine pollution is caused by
land based activitiessoil erosion, fertilizer use, intensive animal production,
sewage and other urban industrial discharges.

Segmenting, Targeting and Positioning